RPT-Czech court strikes down part of fiscal reform

                                
 (Repeats story published late on Wednesday)
                                
 PRAGUE, April 23 (Reuters) - The Czech Republic's top court
struck down part of a fiscal reform on Wednesday aimed at
eliminating sick pay abuse, a blow to the centre-right cabinet's
struggle to shrink the bloated health and welfare systems.
                                
 The Constitutional Court annulled a bill withholding sick
pay for the first three days of illness to discourage shirkers
who take days off while not actually ill. 
                                
 The court said the system should not be a vehicle for
sorting out budget problems.
                                
 The ruling handed a partial victory to the leftist
opposition Social Democrats, who have fought the government's
efforts to cut state spending in parliament and the courts.
                                
 Prime Minister Mirek Topolanek said he respected the ruling
but saw nothing in the law that breached the constitution.
                                
 "I would really be interested to know what was
unconstitutional in that. The first three months already showed
that claims for sick pay, which was overused, dropped 20
percent," news Web site www.aktualne.cz quoted him as saying.
                                
 The average Czech worker took 22.3 days of sick leave in
2007. According to data from the OECD taken in 2005, the Czechs
took one-and-a-half times as many sick days as Germans and
almost three times as many as workers in the United States.
                                
 The reforms are aimed at halting abuse and cutting the
fiscal gap to 1.2 percent of gross domestic product by 2011,
from a much better-than-expected 1.58 percent last year, and
market watchers frowned on the court's decision.
                                
 "I don't see a reason to cancel something that has been
applied in 12 out of the 15 old European Union member states,"
said Tomas Sedlacek, chief economic strategist at bank CSOB.
                                
 The court had earlier ruled to uphold a tax code change
unifying personal income tax brackets at a flat 15 percent. 
                                
 It is also due to rule on healthcare reforms, including
whether a 30 crown ($1.91) fee for seeing a doctor and for drug
prescriptions adheres to the constitution.
                                
 Parties in the coalition have increasingly squabbled about
the future direction of reforms. 
                                
 Despite the disagreement, most analysts expect the cabinet,
which holds just half of the 200 seats in the lower house, to
survive at least until after the Czech European Union presidency
in the first half of 2009.
                                
 The next election is in 2010 and the Social Democrats lead
opinion polls.
                                
 (Additional reporting by Pavel Mahdal)
                                
 (Reporting by Jan Lopatka; Editing by Ron Askew)