* Czech parties end deadlock on new cabinet nominees
* New finmin Janota plans 2010 budget with gap below 2009's
* Euro not an issue now
* Markets little moved, awaiting signs of budget moves
(Adds Fischer quote, Janota comments on policies)
By Jana Mlcochova
PRAGUE, May 5 (Reuters) - Czech leaders agreed on
nominations for a new cabinet on Tuesday, clearing the way for
the caretaker administration to take power until an October
election and battle a deepening economic downturn.
The agreement ends a political crisis that undermined the
Czechs' six-month EU presidency and crippled policymaking at a
time when the central European country was feeling the full
impact of the global economic crisis.
"I am happy that we are ending a rather long period of time
of assembling the cabinet... and starting by the Friday
appointment the new cabinet will be able to take over its
responsibilities adequately," incoming Prime Minister Jan
Fischer told reporters.
Fischer put forward the candidates for his new technocrat
cabinet to President Vaclav Klaus, supported by the two main
political parties who will fight out the autumn elections. Klaus
is expected to appoint the cabinet on Friday.
The finance ministry had been the main point of contention
between the main parties until non-partisan budget expert and
deputy minister Eduard Janota, 57, agreed to take the post.
Outgoing Prime Minister Mirek Topolanek proposed the
respected 31-year veteran at the ministry as a candidate who can
tackle sharp growth of the budget deficit as revenues collapse.
The opposition Social Democrats had blocked the previous
plan calling for current minister Miroslav Kalousek to stay on,
but said Janota was a good candidate.
BORROWING JUMP
The Czech crown <EURCZK=> was weaker for most of the morning
compared to regional peers but rebounded to add about 1 percent
at 1407 GMT.
Janota, who plans to quit the state administration after his
role in Fischer's cabinet ends, said he wanted the 2010 central
state budget with a deficit smaller than 150 billion crowns
($7.57 billion), about the same as this year.
This would put the 2010 deficit at 4.6-4.7 percent of gross
domestic product, but would jump to 6.7 percent in the absence
of saving measures, news agency CTK quoted Janota as saying.
That was largely in line with the figures announced by the
current administration.
He also said Fischer's government would not press the
adoption of the euro due to the swelling public sector gap.
The latest finance ministry forecast sees 2009 economy
shrinking by 2.3 percent and the public sector deficit, the main
part of which is the central state budget deficit, to rise to
4.5 percent of the gross domestic product from 1.5 percent in
2008 and far above euro zone entry 3 percent threshold.
Analysts said Janota was a good pick.
"From an economic point of view, it is good news judging by
Janota's track record," JP Morgan EMEA economist Miroslav
Plojhar said.
"But for markets it's not a significant piece of news. The
spread of Czech bonds against swaps is linked to the fact that
the finance ministry, with or without Janota, must issue much
more debt than planned."
Data on Monday showed the budget deficit had already doubled
on an annual basis in April, exceeding the full-year plan and
the finance ministry has signalled it could issue another 90
billion crowns in domestic debt in months ahead.
(Reporting by Jana Mlcochova and Mirka Krufova; Editing by
Patrick Graham)
