* Ready to discuss support for left-wing cabinet
* Wants tax hikes, higher pensions
* For a factbox on political risks, click on []
By Robert Mueller
PRAGUE, May 5 (Reuters) - The Czech Communist Party (KSCM)
could support a left-wing minority government after this month's
election and would push for higher taxes and pensions, the
party's chief said.
The Communists, the third biggest party in parliament, are
descendants of the totalitarian party that ruled Czechoslovakia
until 1989, and have been shunned as a parliamentary partner by
other parties over the past two decades.
The Social Democrats, leading the opinion polls, will almost
certainly need help from other parties to control a majority of
parliament's 200 seats, opening up the possibility of Communist
backing, without actually joining the cabinet.
The Social Democrats have left the door open to such an
arrangement.
"We are not signing a blank cheque to anybody but we are
ready for talks," Chairman Vojtech Filip said in an interview.
He laid no firm economic policy conditions for supporting
the next cabinet but said the party wanted to introduce higher
tax brackets for the rich and for big companies, and spend 30
billion crowns extra per year ($1.51 billion) on various
programmes including pension hikes.
Analysts have said such policies could go against the need
for reforms to slash the budget gap, because reforms should
mostly be aimed trimming spending rather than raising it even if
compensated for by higher taxes.
The Czechs have a debt of 35 percent of gross domestic
product, low by EU standards, but they run high structural
deficits that will raise the debt fast if not tackled.
The Social Democrats have also proposed tax hikes and there
may be common ground between the two parties on tax and social
policies.
NOSTALGIA
Opinion polls indicate a number of possible outcomes after
the May 28-29 vote, but the Social Democrats will most likely be
the strongest party and have a good chance of leading the next
administration.
The Communists have been polling around 13 percent in opinion
surveys, struggling for the position of the third biggest party
with the conservative TOP 09.
The Communists have slowly been eroding other parties'
reluctance to cooperate with them. In their biggest advance so
far, they formed several coalitions with the Social Democrats
after regional elections in 2008.
Political scientists rank the party among the least reformed
in the former Soviet bloc, unlike the former ruling parties in
Hungary or Poland that had become mainstream leftist forces.
Filip has a "Karl Marx" wine in his office cabinet and some
party officials defend totalitarian Communist rulers and
policies, but the party does not call for a return to the past.
Filip said the party has dealt with the old times.
"KSCM has a 20-year history and we have proven we meet not
only democratic principles, but we also stand behind the
constitution ... As for the previous regime, we have apologised
for our predecessor," he said.
The Communists have drawn support from less educated and
elderly people -- 56 percent of their voters are over 60 -- who
long for the stability of the old system as opposed to the job
and income uncertainty of today.
The party opposes any reforms to the pay-as-you-go pension
system, which faces increasing strain from population ageing and
which bodies such as the Organisation of Economic Cooperation
and Development say must be thoroughly changed.
Filip said he wanted to prevent any privatisation, and raise
state holdings in firms such as the power maker CEZ <>.
In foreign policy, the Communists would like the country to
leave the NATO alliance, but knowing that would be unacceptable
to the Social Democrats, Filip said it was not necessary.
"Leaving NATO is our aim, not a condition," he said.
(Writing by Jan Lopatka; Editing by Alison Williams)
