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Merkel downplays Czech fiscal pact rejection

PRAGUE — German Chancellor Angela Merkel told Czech leaders Tuesday their decision to reject a new EU fiscal treaty would not pose a threat to the plan to limit government overspending in Europe.

The Czech Republic, along with Britain, were the only two European Union countries not to sign the accord last December. The other 25 EU countries have agreed to the more stringent budgetary rules in an attempt to prevent a repeat of the debt crisis that's afflicted the 17-country eurozone for over two years now.

"For us in Germany, it is important that the fiscal pact has been signed by all the eurozone countries," Merkel told reporters through an interpreter after meeting Czech Prime Minister Petr Necas.

In the Czech Republic, President Vaclav Klaus, a renowned euroskeptic and founder of the conservative Civic Democratic Party of Prime Minister Petr Necas, believes the pact is unacceptable because it violates national sovereignty. Klaus has also vowed he would never signed the deal. His second and final term in office ends in early 2013.

But the Czech three-party coalition government is split over the issue and its position could change.

Merkel said her government was not pressuring the Czechs to change their view.

"It's of the utmost importance that the Czech Republic supports the goals of the pact," Merkel said. She said that the Czech efforts to reduce the budget deficit under the 3 percent of GDP next year is exemplary for other EU countries.

Merkel also said her country respected the Czech plan to rely on nuclear energy in the future. The Czechs have announced they want to build two more reactors at the Temelin nuclear power station near the German and Austrian border.

While the Czech Republic is aiming for more nuclear power in its energy mix, Germany has decided to phase out nuclear energy following the nuclear disaster at Japan's Fukushima plant.

Austria has said it will use all means to try and stop the construction at the Temelin plant.

Necas said his government was ready to address any concerns over the plan.

"We've got nothing to hide," he said.