March 22, 2016 / 3:08 PM / in a year

Slovak parties sign pact to give PM Fico third term

Slovakia's Prime Minister and leader of Smer party Robert Fico leaves after a live broadcast of a debate after the country's parliamentary election, in Bratislava, Slovakia, March 6, 2016.David W Cerny

BRATISLAVA (Reuters) - Slovakia's ruling leftist party Smer and three small centrist and nationalist partners signed a coalition agreement on Tuesday, paving the way for a new government to be sworn in later this week.

Prime Minister Robert Fico's Smer won the most votes in a March 5 election but lost its majority by a big margin, raising uncertainty over whether a stable government could be formed before Bratislava takes over the European Union's rotating presidency later this year.

But Fico moved fast to cobble together a majority and is expected to be sworn in for a third term as premier on Wednesday or Thursday. He will then have 30 days to win a confidence vote in the 150-seat parliament, where the four parties hold 81 seats.

While the government formation went smoothly, ideological differences between Fico and two center-right coalition parties, and animosity between a party representing the Hungarian minority and Slovak nationalists, raise questions over how long the coalition will last.

Four backbenchers from two small coalition parties have crossed over to the opposition in protest at their leadership joining forces with Fico.

"Support for the cabinet in parliament will depend on small center-right parties, whose parliamentary groups have already started to fragment ... there is a high risk that Fico's multi-party coalition will unravel before the parliamentary term is over," Otilia Dhand from consultancy Teneo Intelligence said.

Fico defended his course of action, saying a strong government based on wide compromise was needed to respond to threats such as bomb attacks like those in Brussels on Tuesday.

"The only alternative is chaos, an undemocratic caretaker government or nonsensical early election," Fico said after chiefs of the four parties -- Smer (Direction), the Slovak National Party, Most-Hid (Bridge) and Net (Siet) signed the coalition agreement.

The coalition plans moderate cuts in taxes for corporates and small entrepreneurs, and a balanced budget by the end of its term in 2020, two years later than previously planned.

It has also agreed to tackle shortcomings in healthcare and education and increase transparency in government and public spending after a series of corruption scandals.

Fico's party will be dominant in the coalition and hold key ministries such as finance, interior and foreign affairs.

"This will limit the room for significant policy changes on the economic front," Otilia Dhand said.

The finance ministry will again be in the hands of Peter Kazimir, respected for keeping budget deficits under control and known for his tough stance in the euro zone's negotiations with debt-plagued Greece.

Fico based his pre-election campaign on strong opposition to allowing refugees into Slovakia, and filed a lawsuit against an EU decision to impose mandatory quotas on distributing refugees among member states.

But this agenda was not mentioned at all in the coalition agreement, suggesting it was not a common priority for the four parties.

Reporting by Tatiana Jancarikova; Editing by Richard Balmforth

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