* Czech PM prepares budget options for successor
* Deficit should be cut regardless if right or left wins
* Debt dominates campaign ahead of Friday-Saturday vote
* For election TAKE-A-LOOK, click on []
By Jan Lopatka
PRAGUE, May 27 (Reuters) - The outgoing Czech cabinet will
hand various 2011 budget options to the government emerging from
this weekend's election to ensure lengthy coalition talks do not
thwart cost-cutting goals, the prime minister said on Thursday.
The Czech budget has dominated the campaign ahead of the
Friday and Saturday vote, with rightist parties warning of a
Greece-style economic meltdown and leftists pledging to tax
high earners more to fund bigger welfare payouts.
The closely contested poll may produce a hung parliament and
lead to months of political wrangling before a new cabinet is
appointed, a scenario that could unnerve markets.
The leftist Social Democrats lead opinion polls but may find
it difficult to find coalition partners and may even be forced
into opposition.
The central European EU and NATO member country of 10.5
million people has government debt at 35 percent of gross
domestic product, just half of the EU average, but that is seen
growing fast unless reforms are implemented.
The independent Prime Minister Jan Fischer, who has led a
caretaker cabinet since the previous centre-right administration
collapsed in March 2009, told the lower house it was essential
to stick to the budget-cutting path set by his cabinet.
Fischer said the government would prepare various budget
alternatives so any type of government could meet the 4.8
percent 2011 budget deficit target.
"We want the new government, regardless if it is left or
right wing, to have enough material at hand so it can submit the
budget to the new lower house according to its political
preferences," Fischer, who is not running in the election, told
the last session of the outgoing chamber.
The government has pledged to cut the deficit to 3 percent
of GDP by 2013. The leftists have backed the plan, while the
main right-wing party, the Civic Democrats (ODS), have promised
to fulfil it a year earlier.
Social Democrat candidate for finance minister, Bohuslav
Sobotka, said any cabinet must stick to the 4.8 percent target.
"If there are proposals for cutting operating costs at
individual departments, it will certainly be inspiring," he told
Reuters.
LONG TALKS
Fischer's cabinet will stay in power until a new one is
named. The last election in 2006 produced a "hung parliament" in
which no party had a majority and it took two attempts and more
than seven months before a cabinet won approval.
The budget must be submitted to parliament by the end of
September, and the new cabinet may have little time to make big
changes -- if it is in place by then.
Opinion polls have raised the possibility of a centre-right
coalition led by the Civic Democrats, which the markets say
would do better on fiscal, pension and health reforms.
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Strong showing by the left could lead to a minority Social
Democrat cabinet backed by the far-left Communists, a
centre-left coalition, or even a grand coalition of the two
biggest parties.
Rightist parties' warnings of state bankruptcy, which some
economists say are overblown, have dominated the campaign.
The issue has attracted comments from unlikely corners,
including from former National Hockey League star Jaromir Jagr,
who was on the Czech team that won the ice hockey World
Championship last week.
"I do not want to end up in five or 10 years where Greece is
today," he said on Wednesday, declaring support for the ODS.
(Additional reporting by Robert Mueller and Roman Gazdik;
editing by Michael Roddy)
