(Repeats story published late on Tuesday)
By Martin Santa and Jan Lopatka
BRECLAV, Czech Republic, Aug 4 (Reuters) - Czech political
rivals launched their campaigns on Tuesday for an October
general election that will shape the country's response to the
economic crisis and a fast-growing budget shortfall.
The Czech Republic slid into recession after western
European demand for its exports declined, sending the fiscal gap
over 5 percent of gross domestic product and delaying plans to
adopt the euro.
The main right-wing party moved slightly ahead of its
left-wing rivals in early summer, polls showed, but none is
close to winning an outright majority in the Oct 9-10 election.
That opens several options on the make-up of the next
cabinet: a centre-right alliance, a left-wing minority or a
grand coalition similar to the current German administration.
"Despite the recent polls, I believe the Social Democrats
still have a better opening position (to form the next cabinet),"
said Jan Kubacek a political analyst at Prague's Charles
University.
The left-wing Social Democrat leader, Jiri Paroubek, prime
minister in 2005-2006, has promised to tackle unemployment which
has climbed to 8 percent from 5 percent a year ago and is seen
hitting double digits.
"(The former cabinet) showed huge incompetence when
assessing the crisis' impacts," Paroubek said. His party toppled
a centre-right government in March and the country now has a
non-partisan caretaker administration.
Paroubek also wants to cancel health fees and to abolish a
flat income tax imposed by the previous government and raise
taxes on top earners.
"Victory is the only acceptable result ... between 35-40
percent," he told a crowd of several hundred as he launched his
campaign in the town square of the southeastern town of Breclav.
The party has pledged euro adoption in 2014 or 2015 but its
plans for more welfare would make this difficult, analysts said.
RUSSIA, USA
The mildly Eurosceptic centre-right Civic Democrats, led by
Mirek Topolanek, have been struck by the public opposition to
their past reforms and have yet to release a detailed agenda.
In general they promote more conservative fiscal policies
than the left-wing but are in no rush to join the euro zone.
A grand coalition of the two big parties may be a cosy
option because they would share responsibility for unpopular
moves, but facing little opposition, they would be tempted to
partition power in the country for years ahead, Kubacek said.
The Social-Democrats have said they preferred centrist
partners. But they could also turn to the Communists,
descendants of the party that held totalitarian rule from 1948
until 1989 and have since been considered unacceptable by the
mainstream forces.
The Communists are very unlikely to be invited to the
cabinet or any formal government pact, but they could lend their
votes to a minority Social Democrat administration.
Such a make-up would embolden tax-and-spend policies and
cement the Social Democrats' opposition to plans by the previous
government to allow the United States to build a radar base
outside of Prague as part of a missile defence shield.
The plan has angered Russia, the former dominant power in
the region and a country that the Social Democrats want to
improve relations with.
The campaign has opened with mutual accusations of graft and
shady procurement orders, a standard fixture in the country that
has slowly emerged from Communist rule which ended in 1989.
(Editing by Robin Pomeroy)
