PM: Debate on joining EU fiscal pact is currently pointless

Prague, Jan 29 (CTK) - The Czech debate on joining the EU fiscal pact is meaningless until after the "financial constitution" is passed by Czech parliament, Prime Minister Petr Necas (Civic Democrats, ODS) told CTK in reaction to junior government TOP 09's demand yesterday.

TOP 09 wants the new coalition agreement, which has been discussed by the three governing parties, to include the Czech accession to the fiscal pact in 2013.

Necas said in this connection he also considers it necessary to pass a constitutional law on a referendum on the Czech adoption of the euro.

TOP 09's proposal is a novelty that TOP 09 has not mentioned before. It will be discussed by the coalition, Necas said.

"I believe that it [TOP 09's demand] is not meant as a step to provoke a dispute in the coalition in the light of the presidential election," Necas, senior ruling ODS chairman, said.

He said the proposal will be discussed by a coalition working group, by the ODS leadership and then by the top nine leaders, three from each coalition party.

Earlier yesterday, TOP 09 said it wants the Czech Republic to join the EU fiscal pact this year. TOP 09 influential deputy chairman and Finance Minister Miroslav Kalousek told CTK that he would not sign the planned new coalition agreement with the ODS and LIDEM unless it includes this commitment.

Necas said he personally considers it much more important for the Czech government to push through its constitutional bill on budget responsibility, known as financial constitution.

This bill "actually implements the political proclamation presented by the European fiscal compact project," Necas said.

The parliament's vote on the bill will be a test of who in the Czech Republic wants to pursue the policy of budget responsibility, Necas said.

Only afterwards it will make a sense to discuss the fiscal pact's ratification, he pointed out.

TOP 09, too, argues that the planned Czech financial constitution has the same purpose as the fiscal pact of EU member countries that the Czechs refused to join in early 2012.

As the Czech proposal is even stricter than the fiscal compact, nothing prevents Prague from joining the latter, TOP 09 insists.

Necas said he also considers it necessary for the Czech Republic to pass a constitutional law enabling to hold a referendum on the introduction of the euro.

The ODS, which is far from an eager promoter of the euro, set the referendum as a condition for the step a long time ago. TOP 09 does not share this view and recalls that Prague pledged to adopt the euro before entering the EU.

ODS first deputy chairman and Industry and Trade Minister Martin Kuba rejected TOP 09's demand, calling it an ultimatum TOP 09 has "shot" at the ODS via the media.

Kuba said Kalousek sticks to his strategic idea of trying to install TOP 09 chairman Karel Schwarzenberg as prime minister after he failed to make him president in the recent direct election.

"...Colleague Kalousek seems to have come to the conclusion that it is necessary to maximally exploit the potential borne by Karel Schwarzenberg's [presidential] candidacy and use it to the benefit of TOP 09," Kuba said.

Schwarzenberg surprisingly advanced from the first round of the presidential polls but lost to former socialist prime minister Milos Zeman in the run-off vote last weekend. His popularity steeply rose in the past weeks, according to a fresh public opinion poll.

Financial analyst David Marek said there is no reason for the Czech Republic not to join the EU fiscal pact in a situation where the government is planning the Czech fiscal constitution, or budget responsibility bill.

"The more fiscal discipline watchdogs, the better," Marek said.