(Repeats story published early today)
* Czechs to vote in tightly contested two-day election
* Risk of lengthy talks, weak government
* Debt, corruption dominate campaign
By Jan Lopatka
PRAGUE, May 28 (Reuters) - Czech voters worried about debt
and angry with corruption will pick a new parliament on Friday
and Saturday, with polls predicting a tight result that may lead
to lengthy coalition talks and a weak government.
Tackling the budget deficit has dominated the campaign.
Rightist parties have warned of a Greek-style economic meltdown;
leftists pledge, while cutting spending, to boost taxes for high
earners and firms in order to fund more welfare payouts.
Polling stations will be open from 1200 to 2000 GMT on
Friday and 0600 to 1200 GMT on Saturday. Preliminary results are
expected on Saturday evening.
The vote may produce a hung parliament, in line with a
string of weak majorities and politically incoherent cabinets.
This may lead to months of political wrangling before a new
cabinet is appointed, which could unnerve markets.
The leftist Social Democrats lead opinion polls but will
fall short of a majority. They may find it difficult to find
coalition partners to form a strong administration that can push
through their welfare agenda, and may even be forced into
opposition.
"It is necessary that the state is a friend to the people at
a time of crisis," Social Democrat leader Jiri Paroubek said in
a final televised debate on Thursday.
DEBT RISK
The central European EU and NATO member has a population of
10.5 million people and government debt equivalent to 35
percent of GDP, just half the EU average. But that figure will
grow fast without reforms and could threaten the country's solid
credit ratings -- A, A1 and A+ from Standard and Poor's, Moody's
and Fitch respectively.
Markets believe a centre-right coalition led by the Civic
Democrats would be able to best implement needed savings and
reform the pension system, burdened by an ageing population.
"We will make deep structural reforms and balance the budget
by 2017," Civic Democrat leader Petr Necas said in the debate,
rejecting tax hikes. The budget deficit is projected at 5.3
percent of Gross Domestic Product this year
The country has been slowly recovering from last year's 4.1
percent economic drop under a caretaker cabinet led by popular
Prime Minister Jan Fischer, in power since a centre-right
administration led by the Civic Democrats collapsed in March
2009.
A string of corruption scandals has hit the big established
parties, especially the Civic Democrats.
"I have a feeling that they (politicians) don't care about
the well-being of the country, but rather for the trough," said
Hana Sicova, a 36-year-old project manager who said she was
leaning to the right.
The Social Democrats' popularity has been held back by the
divisive style of leader Paroubek and the possibility they may
form a minority cabinet supported by the Communists, heirs to
the totalitarian party whose rule ended in 1989.
"I am going to vote, but only to prevent the victory of
Paroubek," Sicova said.
The Civic Democrats' weakness -- they have polled 3.4-11.5
points behind the Social Democrats -- has also helped the newly
formed, conservative TOP09 led by 72-year old Karel
Schwarzenberg, a popular aristocrat who has pledged the most
radical savings measures to balance the budget.
Another new party, the centrist Public Affairs, has also
gained popularity. It has said it may cooperate with both right
and left parties, although it has rejected a cabinet including
Paroubek.
(Additional reporting by Roman Gazdi, editing by Mark
Trevelyan)
