* Opposition refuses to back any new Topolanek government
* Topolanek vows to fight any other option
* Early elections difficult to organise but may be needed
(Adds opposition comments, expected resignation, background)
By Jan Korselt
PRAGUE, March 25 (Reuters) - The Czech government was left
shorn of authority on Wednesday after a no-confidence vote, its
currency weakened and doubts rising over its ability to cope
with economic storms and the demands of the EU Presidency.
Mirek Topolanek's centre-right government was defeated in a
no-confidence vote on Tuesday, but the opposition Social
Democrats appear ill placed to form an alternative coalition.
"It seems the Czechs are entering a longer period of
uncertainty," said Stuart Bennett, a currency strategist for
Calyon bank. "You can understand why oppositions do this, but it
is almost like cutting off your nose to spite your face."
The vote could leave Topolanek in the prime minister's
office for several months yet, but with less power to tackle
problems of growth and financing that have also hit regional
heavyweight Poland and driven three other once-booming economies
to seek rescue from the International Monetary Fund.
Topolanek, his defeat secured by the defection of rebel
government deputies, said only he could lead a new cabinet. A
senior official of the leftist opposition said it would not
support any bid to form a new government under Topolanek.
The uncertainty is made more acute by personal rivalries.
President Vaclav Klaus, founder of Topolanek's Civic
Democrats but now his political opponent, has the sole right to
pick the new prime minister.
Topolanek's defeat followed a weekend decision by Hungary's
prime minister to quit. Hungarian premier Ferenc Gyurcsany's
decision to step down was tied more specifically to economic
problems, without the political squabbles afflicting Prague.
[]
Topolanek is expected to formally resign on Thursday but the
coalition cabinet led by his right-wing Civic Democrats will
remain in office until a new government is appointed or until an
election, probably throughout the EU presidency ending in June.
Events in Prague have ramifications for the entire 27-nation
European Union that the Czech Republic and other former Soviet
bloc states used as a springboard for a rapid economic
development so dramatically cut short by global crisis.
The no-confidence vote has threatened the ratification of
the European Union's Lisbon treaty, meant to streamline
decision-making in the bloc after it had expanded to the east.
Senators for Topolanek's party have been uneasy about the
treaty and analysts said they may grow more hostile after the
government defeat.
The opposition have said they would allow the government to
carry through obligations to the EU presidency ending in June.
But clearly upheaval in Prague could do little to help.
Social Democrat Vice-Chairman Bohuslav Sobotka reiterated
his party's call for an early election in the autumn, ahead of
regular polls due in 2010, and preferably a cabinet of non-party
experts until then.
"It is not possible for Topolanek to be the prime minister
until the autumn," he told Reuters. "It is up to the president
to find someone (else)."
The political crisis pushed the crown currency 1.7 percent
lower on Wednesday but analysts said the country's solid
fundamentals including low foreign debt and small budget and
current account deficits would provide support to markets.
Given the split of power in parliament, forming any new
cabinet will be tough without an agreement between the two
biggest parties, which was nowhere in sight.
"The option is to appoint Mirek Topolanek because the Civic
Democrats will not allow for any other appointment," Topolanek
told the daily Hospodarske Noviny.
Topolanek's government has cut taxes, raised the retirement
age and introduced unpopular health fees. It has not been
rushing to adopt the euro currency. The Social Democrats promote
more tax-and-spend policies, want quick euro zone entry and
promise to take better care of the poor.
EARLY ELECTIONS
The Civic Democrats have also said they would support an
early election, but this summer. The party has been gaining
ground in opinion polls since the country took over the EU
presidency, but still lags 4.5-7.5 percentage points behind the
Social Democrats.
Calling early elections is difficult under the Czech
constitution without the agreement of the major parties.
"It will be a war of nerves between Topolanek, Klaus and
(Social Democrat chief Jiri) Paroubek about who will get the
right to create the next government," said Jan Kubacek,
political science lecturer at Charles University.
"Both parties will likely be able to agree on early
elections in autumn," he said.
The government fall also further undermined efforts to
ratify a plan to host a U.S. missile defence shield base,
already on the ice due to insufficient support in parliament.
The United States is also reviewing the plan.
