CZECH REPUBLIC: TOPOLANEK TO MAKE SECOND ATTEMPT

UNCLAS SECTION 01 OF 02 PRAGUE 001384 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV PREL EZ SUBJECT: CZECH REPUBLIC: TOPOLANEK TO MAKE SECOND ATTEMPT AT GOVERNMENT; CSSD MAY SUPPORT ¶1. (SBU) SUMMARY: Czech President Klaus will give outgoing Prime Minister Mirek Topolanek the second chance at forming a government. Klaus will make the announcement on November 8. Topolanek, whose minority government lost a vote of confidence in early October, has said he will focus again on a short-term government leading to new elections next year. While Klaus's decision to give Topolanek the second chance was a surprise, equally surprising has been the reaction of CSSD Chairman Paroubek that he would support an ODS minority government, or an ODS-CSSD grand coalition, provided that elections are held in 2008. This could provide a way out of the political stalemate that has been in effect for five months. END SUMMARY ¶2. (U) President Klaus surprised observers by announcing on November 6 that he would give ODS Chairman and outgoing PM Mirek Topolanek the second chance to form a government (Topolanek's minority government, formed in early September after months of negotiations in the wake June 3 elections that produced a divided parliament, lost a vote of confidence on October 3). Klaus was apparently frustrated that a proposal he had made to party leaders on November 3 for a coalition of all parties except the Communists had been rejected immediately by Social Democratic (CSSD) Chairman Jiri Paroubek. Klaus declared that he had been frustrated in his efforts to break the political deadlock -- openly blaming Paroubek for obstructing his efforts -- and said he had no choice but to turn to the head of the largest party in parliament. The reaction of Topolanek and other ODS leaders made clear that Klaus's announcement had not been previously coordinated. But after a meeting on November 7 with Klaus, Topolanek announced that he would accept the challenge to form a new government, which Klaus said he would formally offer on November 8. (Note: At that time the President will ask Topolanek to put together a cabinet for his approval. Topolanek's outgoing government remains in place during this period. Only once Topolanek has assembled a new cabinet and new government program that is acceptable to the President will his new government -- assuming Topolanek himself is at the head of it -- take over from the old cabinet. From that day the new government has 30 days to seek a vote of confidence. If it fails, a new and likely more complicated period of horsetrading begins since the Speaker of the Parliament, rather than the President, has the authority to designate the person to form the third government. The current Speaker, from CSSD, has pledged repeatedly that he will resign from his position if the second government attempt fails. End note) ¶3. (SBU) Topolanek has said he will begin negotiations with all parties. But also made clear that he continues to prefer a caretaker government arrangement leading to new elections early next year. Other party leaders have also spoken out since the President's announcement. The Christian Democrats have said they prefer a rainbow coalition of all parties, excluding the Communists. For their part the Communists say they want a rainbow coalition of all parties. The Greens reject have rejected a rainbow coalition or any arrangement that puts off elections for too long; like ODS they prefer a caretaker government and elections in mid 2007. The ODS Minister for Regional Development, Petr Gandalovic, had told the Ambassador on November 3 that his party is against a non-partisan caretaker government for more than six months since such a government would have an enormous effect on public policy without a mandate from the people. ¶4. (SBU) The most surprising comments have come from CSSD Chairman Paroubek. After stating for weeks that he deserved a chance to form a government, Paroubek has reacted to the President's announcement by saying that he is open to working with an ODS-led government under certain conditions. Paroubek said that CSSD could support an ODS-minority government, or could form a grand coalition with ODS, so long as elections were held in late 2008. Paroubek has long been fixated on this date. He clarified his preferences by proposing that early national elections could be held in conjunction with the Senate and provincial elections already scheduled for the fall of 2008. The Social Democrats traditionally do not do well in those elections, but might do better if they were combined with a general election. ¶5. (SBU) The backdrop for Topolanek's second attempt at government formation is the ODS Party Congress that takes place in Prague November 17-18 and which will elect new leadership. After clear successes in the parliamentary, senate and local elections this year, and now with a fresh mandate to form a government, Topolanek appears to be assured of maintaining his position. But there is an active race underway for deputy positions. Prague Mayor Pavel Bem (ODS), PRAGUE 00001384 002 OF 002 frequently mentioned as a possible Prime Minister and Topolanek rival, is believed to have his eye on the number two spot, currently held by Labor Minister Necas. Bem has kept a very low profile of late; despite a resounding ODS victory in the Prague city council races last month, Bem has yet to finalize negotiations over the coalition that will run the city council, apparently out concern that a coalition with CSSD at the municipal level might hurt his chances of becoming the party's Deputy Chair. Although Bem had been part of the team that negotiated Topolanek's first government, he will not be part of the team working on the second. That team will include Topolanek, Necas, and Petr Tluchor, Chairman of the party's parliamentary caucus. ¶6. (SBU) COMMENT. By keeping Bem off of his negotiating team, Topolanek is demonstrating increasing confidence in his own control over the sometimes divided ODS. A victory for Topolanek supporters in the votes for party chairs next week will boost Topolanek and perhaps increase the likelihood that his second attempt at government formation is more successful than his first. CSSD's surprisingly constructive approach is obviously another reason for optimism that this week could mark a turning point in the 24 week old stalemate. Although we have seen enough twists and turns in this process to be cautious about predicting success for Topolanek. There are reasons for concern about the road ahead, including the date of an election. While there is always a concern about what impact the political situation could have on a possible USG offer of missile defense facilities, there is also that fact that a late 2008 election means the Czechs would begin their January 2009 EU presidency with potentially a brand new government. Still, a second Topolanek government -- if it succeeds -- could look very much like the current government, which includes a number of strong ministers and a generally pro-U.S. stance. END COMMENT GRABER