* Regional divide underscores deep-rooted political split
* Rich Prague seen as arrogant, corrupt capital
* Left-wing regions lose on economic transformation
By Jana Mlcochova
MOST, Czech Republic, May 25 (Reuters) - With two unemployed
grandchildren and a pension she fears rightists want to cut,
Jana Kysilkova is sure to vote for a left-wing party in the
Czech general election this weekend.
The only question is whether to pick the frontrunning Social
Democrats or the hard-left Communists, a dilemma shared by many
in this gritty industrial town near the border with Germany, a
region with per capita output at 61.7 percent of EU average.
She recalls that 20 years ago under communist rule, everyone
had a job, while the rust belt city's 20 percent unemployment
rate is now the highest in a country of 10.5 million.
"Thank God I'm retired. That way I have at least something
-- until they take it away from us, as they say they will," the
66-year-old Kysilkova said.
Opinions could not be more different 85 km (50 miles) south
in Prague, the fifth wealthiest region in the EU with output at
172 percent of the EU average, where many high-earners driving
SUVs resent paying for social benefits for the jobless.
In the capital and other richer areas, right-wing parties
have solidified support around a pledge to reorganise the
welfare system with reforms they say are needed to prevent a
Greek-style economic meltdown.
This tale of two cities explains the deep left-right divide
that has engendered a decade of weak governments which have
lagged their central European peers in economic reform.
Although growth has been high and the budget deficit smaller
than in many other EU countries, a looming demographic crunch
means changes are needed to healthcare and pension systems that
show ever-growing shortfalls. []
But a virtually dead heat among leftist and rightist parties
ahead of the May 28-29 vote could yield another weak
administration and more delay in reforms.
Another Czech fault line is the young-old divide. The Social
Democrats and Communists draw support from the older generation
while first-time voters are decidedly right-wing, unlike in many
west European countries.
"The Czechs will never have a government strong enough to
push through fundamental reforms out of strength," said Jiri
Pehe, director of New York University in Prague.
"The problem of Czech politics is that they need to learn to
agree on crucial reforms through the political centre."
RICH PRAGUE
The reform deadlock in the last elected government, led by
the right-of-centre Civic Democrats, underscored the problem.
With only 100 seats in the 200-member parliament, it was
toppled in a confidence vote after party rebels teamed up with
the leftist opposition. It gave way to a caretaker cabinet of
technocrats having fulfilled just a fraction of planned reforms.
Now the Civic Democrats and an upstart rightist party TOP09
have called for measures to slash the budget deficit to prevent
what some have warned could lead to national bankruptcy.
They are particularly targetting mandatory guaranteed
spending that includes welfare and unemployment benefits and
drains nearly 65 percent of the overall budget.
Their stronghold is Prague, a city with a jobless rate of
just 4 percent and gross domestic product per inhabitant that
exceeds Vienna and Stockholm, according to Eurostat data.
Voters here are bombarded with warnings that public debt,
very low at 35 percent of GDP, half of the EU average, could
spike due to high social spending costs.
"I can say quite certainly that I will vote for the right,"
said 30-year old Vladimir Konecny, a bank employee, on a glitzy
Prague avenue studded with shops like Hugo Boss and Lacoste.
"I don't want higher taxes and I'm concerned over further
growth in (national) debt."
While many people in poorer regions accuse dwellers in the
capital of arrogance and ignorance of their problems, Konecny
said most leftist voters were unaware of economic realities.
"The average voter doesn't understand much and easily falls
for populist rhetoric," he said.
The right faces a tough task to win the election and push
through its agenda. Most recent polls show the Civic Democrats
trailing the Social Democrats 22.9 percent to 26.3 percent and
needing support from smaller parties for any chance of ruling.
A Reuters poll of analysts found the most likely outcome was
a Social Democrat-led cabinet and the biggest post-election
risks were the budget deficit and a weak government with
insufficient backing for reforms. []
LEFTIST REGIONS
In Most, a McDonald's restaurant and a new Tesco supermarket
are symbols of material progress since the fall of communism,
but a majority of the population live in run-down communist era
flats and 60 percent work in manual labour.
Once favoured under communism with its coal-mining workforce
considered the aristocracy of the working class, the city of
67,000 depends on a chemical factory and a remaining coal mine.
The communist government even moved a Gothic church by 841
metres in 1975 to make room for a mine shaft.
Many here point to media stories of corruption scandals said
to have cost millions of euros and say the country's budget woes
originate in the halls of the political elite in Prague.
[]
Oldrich Maly, director of Most's labour office, said a lack
of development over the past 10 years has left many in the town
with no other choice than to rely on the state, and reducing
social benefits would bring unacceptable pain.
"The more cuts the worse," said Maly. "Bluntly put, cuts
mean higher uncertainty, rising aggressiveness and crime... We
are seeing people beginning to steal from their employers."
The Social Democrats pledge to preserve welfare and want to
tax the rich to reduce the debt, even though many economists say
that could lower economic demand and sap growth.
Mother-of-eight Marie Mikulova has been unemployed for nine
years. She sees no alternative to taking ever dwindling dole
cheques and feels no one in Prague understands the situation in
Most.
"People don't have enough money to pay the rent... and
before they know it they're homeless," she said.
(Editing by Michael Winfrey and Paul Taylor)
