Spidla survives a vote of non-confidence but is this the end of his woes?

The Czech Prime Minister Vladimir Spidla narrowly survived a vote of no confidence this week. The vote was called amid widespread criticism of a package of public finance reforms driven by European consideration. It's the second vote of no confidence since Prime Minister Spidla's three-party coalition came to power in June 2002. Rob Cameron talks about why is the government is in trouble.

Vladimir Spidla, photo: CTK

"Well the government is in trouble because it's being forced to pass a very wide spread package of public finance reforms, spending cuts in other words, and that's to prepare the Czech economy for the eventual adoption of the Euro by the end of the decade. The problem is that the government which is passing these reforms has a majority of just one seat in the lower house, so it's a very, very difficult process."

Why are these reforms so unpopular?

"Well, they include very widespread cuts in the country's benefit system. Sick pay will be affected, the law on pensions will be made much stricter, and V.A.T will be increased on goods and services. So all of these things are not very popular with many people. Not only are they opposed by the Unions and by the traditional voters of the left wing party, the Social Democrats, they're also opposed by analysts who actually say they don't go far enough to reducing the budget deficit to bring the country into line with the Maastricht criteria. So really the government is under fire on both sides over the reforms."

And why is the government itself so shaky?

"Well the government is shaky because it's a coalition of three parties. The Social Democrats are the biggest party in the government and there are 2 smaller centrists, more right-wing parties. Now they have a majority of just 1 seat in parliament and its rather fractious at the best of times. So when they need to put through earth shattering legislation like these public finance reforms it's very difficult to get all the 101 MPs in the 200 seat Lower House on board and supporting government policy. This week it seems to be working - as we've heard the vote of no confidence failed, the government survived and also the public finance reforms have enjoyed a surprisingly smooth passage so far through parliament. They're not actually approved yet though."

They're survived the vote of no confidence but is this the end of the matter?

"It's not really no. The package of reforms now has to go through to the final reading in parliament, but once they're approved the government still has to propose a budget for next year. And that will be sometime in November and that budget will have a huge deficit - a record deficit in the region of 3.5 billion euros. And the opposition and some members of the ruling coalition say that's simply too much - even though the government is trying eventually to bring down debt, in the short term they are borrowing too much money. So that could be a very tricky time for the coalition. And many see this vote of no confidence as merely the opening skirmish in a much tougher battle to come."