Gov't gives conditional approval to join eurozone's fiscal compact

Prague, Jan 25 (CTK) - The Czech government yesterday voiced a conditional consent to the prepared EU fiscal discipline pact and it decided that it should be ratified in a referendum or by a constitutional three-fifth majority in parliament, a source, from the government meeting, has told CTK.

Some still open points in the document must yet be tuned up before the ratification, the source said.

The government TOP 09 headed by Foreign Minister Karel Schwarzenberg abstained from the vote in the government yesterday.

TOP 09 would like the treaty to be ratified by a simple majority in parliament, which would be unacceptable for the senior ruling Civic Democrats (ODS) and the Public Affairs (VV), the smallest government member, according to CTK information.

The government has thereby softened its position from last week when the ODS and VV ministers pushed through a referendum on the fiscal pact to be hold either separately or within a referendum on the euro adoption.

The ODS and the VV are of the view that the treaty is "basically a financial constitution" that would have to be passed by a constitutional majority, a CTK source said.

The fiscal pact has stirred up tension on the Czech political scene. President Vaclav Klaus said previously he would not sign it.

The opposition Social Democrats (CSSD) support the ratification of the treaty.

The treaty is to apply to the euro zone members only, but other EU states, such as the Czech Republic, may accede to it as well. In them it would become valid after their entry into the euro zone.

The EU member countries heads of state and government are to discuss the treaty to strengthen budget discipline on Monday.

Finance Minister and TOP 09 deputy chairman Miroslav Kalousek, who was negotiating on the planned treaty in Brussels in the past days, told reporters on Tuesday that no one in the EU can understand the position of the Czech cabinet that wants Prague's accession to the EU's fiscal discipline pact to be decided in a referendum.

"In the eyes of all my counterparts from the EU countries I could see their total lack of understanding of this [Czech] position," Kalousek said, adding that he understood his colleagues' reaction.