VZCZCXRO0653
PP RUEHAST
DE RUEHPG #0719/01 1771436
ZNR UUUUU ZZH
P 261436Z JUN 06
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC PRIORITY 7553
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 PRAGUE 000719 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/NCE EFICHTE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EZ
SUBJECT: CZECH REPUBLIC: COALITION AGREEMENT REACHED 
 
REF: A. Prague 610 
     ¶B. Prague 607 
 
PRAGUE 00000719  001.2 OF 002 
 
 
¶1. (U) The Civic Democrats (ODS), Christian Democrats (KDU- 
CSL), and the Green Party (SZ) signed a coalition agreement 
and finalized ministerial nominations late June 23.  ODS, 
which won the largest number of votes in the June 2 - 3 
election, will hold 10 posts including that of the Prime 
Minister, and Christian Democrats and the Greens will each 
hold three.  Whether and when this new government is able to 
secure a vote of confidence from the new Lower House, which 
begins its new session June 27, remains a big question mark. 
The outgoing Premier and Chairman of the Social Democrats 
(CSSD) Jiri Paroubek has announced that the vote of 
confidence would be conditional upon significant policy 
concessions by the new coalition government, plus the post 
of the Speaker of the Lower House and some other influential 
positions for CSSD.  Even if the three-party coalition gets 
the vote of confidence, the result will still be a weak 
government that is very much dependent on the CSSD for 
legislative support. 
 
¶2. (U) In terms of timing, the vote of confidence will 
likely take weeks rather than days since the Lower House 
must first settle on its leadership (Speaker of the House), 
only after which the outgoing government can submit its 
resignation, and after which the new government can request 
a vote of confidence.  According to the Czech constitution, 
once the new government is submitted to the President (June 
26), the government has 30 days to request a vote of 
confidence.  What ODS and CSSD are able to negotiate during 
that time will determine the outcome.  If the three-party 
coalition fails to make mutually acceptable concessions with 
CSSD, the newly formed government has no chance to survive 
the vote of confidence, and President Klaus will have to 
select a second appointee to form a government.  It is 
widely believed that Klaus will give Topolanek a second 
chance, although the possibility of Prague Mayor Pavel Bem 
getting that opportunity still remains. 
 
¶3. (U) The post of the new Foreign Minister will go to 
Alexandr Vondra (independent but nominated by ODS).  As a 
former dissident, Charter 77 signatory, human rights 
activist, and a staunch supporter of NATO and the 
transatlantic concept of the Czech foreign policy, Vondra 
would continue the foreign policy line pursued by the 
outgoing Foreign Minister Cyril Svoboda.  As a former 
Ambassador to Washington, D.C. and a great friend of the 
United States, he would make a Foreign Minister with whom 
Washington could establish exceptional relations. 
 
¶4. (U) The newly established post of the Minister for 
European Affairs will go to Petr Gandalovic (ODS). Until 
last week, Gandalovic was Mayor of Usti nad Labem, where he 
beat PM Paroubek in the June election.  As a Mayor, he has 
ample experience in handling the EU portfolio with respect 
to regional politics, funding EU-related projects, and EU 
integration in general.  Mr. Gandalovic served as the Consul 
General of the Czech Republic in New York from 1997 to 2002. 
He is a graduate of the International Visitors 
program(1991). 
 
¶5. (U) For the first time in Czech history, a woman will 
hold the post of the Defense Minister.  Vlasta Parkanova 
(KDU-CSL) is a former Justice Minister (1996 - 98) and a 
long-time parliamentarian.  She has served on the Defense 
Committee in the Lower House and was the leader of the House 
permanent delegation to the NATO Parliamentary Assembly. As 
a member of the Christian Democrat party, she is expected to 
continue the current foreign and defense policy line of her 
predecessor, who is from the same party. 
 
¶6. (U) Coalition agreement priorities are listed below and 
mostly address EU and domestic policies.  In terms of 
international and security issues, the coalition agreement 
supports the establishment of an effective system of 
development and humanitarian assistance, liberalization of 
world trade, preserving intellectual property rights, 
further development of transatlantic links between the U.S. 
and the EU, building a professional military focused on 
quality and effectiveness, and democracy promotion 
worldwide. 
 
-- COOPERATION AND SECURITY WITHIN THE EUROPEAN UNION (e.g., 
support for EU enlargement, support for EU policy reform 
such as agriculture, greater responsibility for security) 
 
-- CITIZEN, FAMILY, SOCIETY, EDUCATION AND CULTURE (e.g., 
pension reform, education reform) 
 
 
PRAGUE 00000719  002.2 OF 002 
 
 
-- RULE OF LAW/ANTI-CORRUPTION (e.g., deadline for court 
rulings, simplification and rationalization of judicial 
system, increase transparency of public tenders) 
 
-- PUBLIC FINANCE REFORM (e.g., reduction of overall tax 
burden for private citizens and businesses, flat tax, 
introduction of energy and ecology tax starting August 2008) 
 
-- ECONOMIC MODERNIZATION AND INCREASED EMPLOYMENT 
OPPORTUNITIES 
 
-- IMPROVED QUALITY OF LIFE IN CITIES AND IN REGIONS (rent 
deregulation, limit on brown coal mining, restrict new 
nuclear power plants) 
 
-- COALITION COOPERATION (i.e., a "coalition proposal" shall 
be a proposal for which at least half of the ministers from 
each of the three coalition parties.  This principal shall 
apply to the budget, taxes, investment, foreign policy, and 
defense policy) 
 
¶7. (U) The critical next step is winning the vote of 
confidence in Parliament, with Parliament divided evenly 
with the center-right coalition holding 100 seats and the 
center-left (CSSD and the Communists) holding 100 seats. 
Both the ODS and the CSSD are interested in the post of the 
Lower House Speaker.  Even if the new coalition government 
would support the CSSD nominee (outgoing Speaker Lubomir 
Zaoralek) for the post, it would not mean CSSD would 
automatically support a vote of confidence since PM and CSSD 
Chair Paroubek has said publicly that such support would 
also depend on program/policy concessions.  President Klaus 
has stated he expects CSSD to support the nascent government 
coalition in exchange for the post of the Lower House 
Speaker.  He also added that if CSSD does not support the 
new government, he would not/not appoint Paroubek for that 
opportunity. 
 
¶8. (SBU) COMMENT: What this new coalition government would 
mean for Czech foreign policy and the USG is continuity. 
All the controversy and difficulties surrounding the 
coalition agreement, and even with the opposition CSSD, has 
been about domestic and EU policy issues, not/not foreign 
policy and relations with the U.S.  We can expect the Czech 
Republic to remain strong on NATO and the transatlantic 
relationship.  This is all the more so given Vondra and 
Gandalovic in their respective posts as Foreign and EU 
Affairs Ministers.  The only unknown factor for the USG is 
the new Defense Minister Parkanova due to posts' limited and 
dated interactions and first-hand knowledge of her 
inclinations. 
CABANISS