By Jason Hovet
PRAGUE (Reuters) - Czech President Vaclav Klaus will name Civic Democrat leader Petr Necas as the next prime minister on Monday, ushering in what should be the strongest government in a decade to tackle economic reforms.
The Civic Democrats are leading coalition talks with two other centre-right parties, TOP09 and Public Affairs, after the three won a combined 118 seats out of 200 in a May 28-29 election with pledges of austerity and fighting corruption.
If the three parties agree on a coalition government they would have a strong majority to kick-start key reforms in pensions and healthcare compared with previous cabinets over the last decade which lacked a strong enough majority and the will to reform.
Talks between the parties have dragged because of disputes over policy and ministerial posts, including who should run the important finance ministry. Necas has said he wants a deal by early July, in time to prepare the 2011 budget.
"Tomorrow at 10 a.m. I will name Petr Necas as prime minister," Klaus said on Sunday in a live television interview.
Klaus accepted the resignation of caretaker Prime Minister Jan Fischer on Friday ending a year-old interim cabinet that led the country after the collapse of the previous centre-right government. He will stay on until a new cabinet takes power.
Investors, analysts and rating agencies cheered the centre-right victory as the best possible election outcome, and most-likely grouping to make pension and health reform -- areas in which the country of 10.5 million has lagged neighbours.
TOUGH TALKS STILL
The Czechs and other central European countries have mostly kept public budgets under control in the economic crisis and have debt levels lower than the European Union average.
But to meet the EU's 3 percent of GDP deficit ceiling in the coming years, they all must find more savings.
The parties have agreed to cut the 2011 fiscal deficit to at least 4.8 percent of economic output, from 5.3 percent planned for 2010, by reducing money for state salaries and ministry budgets across the board, among other measures.
The Civic Democrats would get six posts in the cabinet, while conservative TOP09 and centrist Public Affairs would get five and four seats.
However, TOP09 has pushed hard to have its vice-chairman and former finance minister, Miroslav Kalousek, as head of the finance ministry -- which many Civic Democrats have resisted.
Public Affairs, which along with TOP09 entered parliament for the first time, has said it might not enter the coalition but would support it in votes.
Party Vice-Chairman Vit Barta was quoted on Sunday as saying there was still a chance of this.
"The chance that we will be directly in the government is now about 20 percent. The probability is directly correlated to an agreement on the government programme, and can grow," Barta was cited as saying by online server iDnes.cz.
Another party official said on Sunday on Czech Television that the party would not enter the government if Public Affairs Chairman Radek John did not get the interior minister post.
(Editing by Matthew Jones)
