US embassy cable - 05PRAGUE720

UNCLAS PRAGUE 000720 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, EZ 
SUBJECT: NEW CZECH PM PAROUBEK SURVIVES VOTE OF CONFIDENCE, 
ENDING GOVERNMENT CRISIS 
 
1. (U) The government crisis that began in January with a 
questions about the source of funds used by then PM Stanislav 
Gross (CSSD) to acquire his apartment, came to a formal end 
on May 13 when the government of his successor, Jiri Paroubek 
(CSSD), was approved by the lower house of parliament.  The 
party-line vote in the 200 seat chamber was 101 for, 99 
against. The three parties in the coalition voted in favor of 
the government.  The two parties in the opposition, the Civic 
Democrats (ODS) and the communists (KSCM), voted against it. 
 
2. (U) This is the third government since the general 
election in 2002.  The other two governments were made up of 
the same three parties in Paroubek's coalition:  the Social 
Democrats (CSSD), Christian Democrats (KDU-CSL), and the 
Freedom Union (US-DEU).  Paroubek's cabinet is also similar 
to that of his predecessor.  Only 4 of the 18 ministries 
changed hands.  Minister of Defense Karel Kuhnl (US-DEU) and 
Minister of Foreign Affairs Cyril Svoboda (KDU-CSL) have 
retained their positions. 
 
3. (U) In a speech just before the vote of confidence, ODS 
Deputy Chair Vlastimil Tlusty offered to work with Paroubek's 
government on certain issues, including passage of bankruptcy 
reform, conflict of interest legislation, and other 
pro-business reforms.  In the past ODS has had a public 
policy of not cooperating with CSSD. 
 
4. (SBU) The next general election will be held in June 2006. 
 Paroubek and his new government have about 100 days before 
full-time campaigning begins and it becomes almost impossible 
to pass politically sensitive measures.  According to Gross's 
former economic advisor, Jan Mladek, Paroubek is expected to 
try and revive his party's sagging popularity, particularly 
with left-of-center voters, by trying to reduce taxes on 
Czechs with low income, by spending government funds 
upgrading housing estates, and by supporting loans to 
newlyweds. 
 
5. (SBU) Paroubek's aides do not expect him to get very 
involved in foreign relations.  However, two of Paroubek's 
party members, former FM Jan Kavan and head of parliament's 
Foreign Affairs Committee, Vladimir Lastuvka, made their 
support during the vote contingent on the appointment of a 
CSSD member as principal Deputy Foreign Minister.  The 
replacement for the current Deputy Foreign Minister, Jan 
Winkler, who is expected to take up the position of Czech 
Ambassador to the UK this summer, could be Jaroslav Basta, 
who is the Czech Ambassador in Moscow.  Kavan and Lastuvka 
made the demand in order to increase CSSD influence in the 
MFA, and to counteract what they perceive as an excessively 
pro-American stance by Foreign Minister Svoboda. 
CABANISS