Czech prime minister announces government resignation

The Czech Republic's prime minister unexpectedly announced on Tuesday that his government will resign over unexplained business dealings of the country's finance minister.

Prime Minister Bohuslav Sobotka said that he would meet President Milos Zeman this week to formally submit the government's resignation.

Sobotka's move caught political observers by surprise, but reflects tensions in the ruling coalition about six months before the next scheduled parliamentary election.

Sobotka said there are suspicions that Finance Minister Andrej Babis, the country's second-richest businessman, avoided paying taxes in the past. Doubts have also surfaced about how Babis obtained his wealth.

Babis is a rival of Sobotka's and heads a centrist movement that is a favorite to win October's ballot, paving the way for him to become prime minister. He previously denied any wrongdoing and refused to resign.

The country's president fires Cabinet ministers at the prime minister's request, under the Constitution. Zeman indicated recently it made no sense to him to get rid of a government member so close to the election.

Sobotka said it would be an option to fire Babis but that would mean his rival would be given extra time to campaign ahead of the vote.

"That's the reason I'm opting for the only reasonable solution which is available, and that's the government's resignation," Sobotka said during a hastily organized news conference.

"A trust of the public in politics is at stake," Sobotka said.

He said having the entire government quit would give the coalition a chance to form a government again, but without Babis. Another option is for Parliament to call an early election.

It is not clear if that would be acceptable for the necessary three-fifths of deputies in Parliament, given the relatively short time until the vote scheduled for Oct 20-21.

Babis, the most popular government politician, called the move "incomprehensible."

"(Sobotka) destroys everything," Babis told Czech public radio. "The government was successful, we had results."

"I reject his nonsense," he said. Babis said he was doing business in line with law.

The president's office didn't immediately comment. Zeman was scheduled to meet Babis on Wednesday.

Analyst Tomas Lebeda said he considered that Sobotka had made a "huge political mistake" because he put Zeman, another rival, in full control.

Babis is sometimes dubbed the "Czech Berlusconi," a comparison to Silvio Berlusconi, the Italian media tycoon who until recent years dominated his nation's politics.

Babis has often quarreled with the left-wing Social Democrats in the government.

Most notably, the Social Democrats pushed through legislation that limits the business activities of government ministers. The law bans ministers from owning media organizations, and bars companies in which ministers have more than a 25 percent stake from receiving state subsidies and participating in public tenders.

Babis, who owned two major newspapers and the Agrofert conglomerate of some 250 companies which receives state subsidies, fiercely opposed the law, but has complied with it.

Sobotka's Social Democrats are running a distant second in polls ahead of the October election. The Christian Democrats are the third member of the coalition government that was created in 2014. Their chairman, Pavel Belobradek, said he respected the premier's decision.