Czech government approves bill limiting presidential powers - source

The proposed constitutional change will be sent to parliament where it needs the approval of three fifths of lawmakers in both houses to pass into law.

The three-party ruling coalition lacks a majority and will need votes from some opposition members.

The amendment would give the upper house the right to vet and veto central bank board nominees chosen by the president. The president now appoints the seven-seat board himself. Other changes include tighter rules for appointing a new cabinet.

If passed, the proposal might affect policy as early as 2016 when a new central bank governor is due to be appointed.

Prime Minister Bohuslav Sobotka's government says the rules should change now that presidents are elected in a direct vote rather than by parliament, a change made in 2013.

Incumbent president, Milos Zeman, was the first to be elected in a popular vote.

Zeman has repeatedly criticised the central bank's policy, launched in 2013, of keeping the crown weak to avoid deflation.

He is also at odds with the central bank over euro zone membership, which the Czech Republic pledged it would join when it entered the European Union in 2004. Zeman wants the country to adopt the euro sooner rather than later.

Last Sunday Zeman held a meeting on the issue with Sobotka, the finance minister and the central bank governor, but they came to no decisions. The government does not plan on setting a target date during this term of office.

(Reporting by Robert Muller; Editing by Louise Ireland)