(Updates with quote in fourth paragraph.)
Dec. 14 (Bloomberg) -- The Czech lower house of parliament approved legislation allowing direct elections for the president, who appoints prime ministers, after a dispute whether to dilute his power to select central bankers.
The bill must now be approved in the upper house of parliament, the Senate, to become valid. The government and the opposition Social Democrats, argued over a proposal that would require the Senate to approve selection of policy makers. The Social Democrats didn’t muster enough votes today to push though the change, while still backing the direct presidential election.
The president doesn’t hold executive powers, although he selects the political leader who attempts to form a government after general elections. The president may also influence monetary policy as the position holds the sole right to name members of the central bank’s rate-setting board.
“One of the main advantages of this country, thanks to which it is able to face the economic problems, is the respected position of the Czech National Bank, led by the current bank board and the governor,” Premier Petr Necas told lawmakers, rejecting the change in the selection procedure.
Social Democrat leader Bohuslav Sobotka said he will recommend to the party’s members of the Senate to back the direct presidential election. The Social Democrats control the upper house of parliament and their votes are needed to make the legislative change valid.
The second term of President Vaclav Klaus, who delayed signing the European Union’s Lisbon Treaty in 2009 and has opposed a rush into the euro area, will end in 2013 and the current law forbids him to seek the post again.
Klaus named all of the current seven policy members, selecting a mix of bank professionals and academics to the rate- setting board. The central bank has kept the benchmark two-week repurchase rate at a record low 0.75 percent since May 2010 and will weigh slowing economic growth and accelerating inflation when making its next policy decision on Dec. 21.
--Editor: Douglas Lytle
To contact the reporter on this story: Peter Laca in Prague at firstname.lastname@example.org
To contact the editor responsible for this story: Balazs Penz at email@example.com