(Repeats story published late on Wednesday)
* Czech right pledges to create up to 265,000 jobs by 2012
* Main recipe is flexible labour markets
* Leftists lead opinion polls
PRAGUE, March 17 (Reuters) - The main Czech right-wing party
opened campaigning for a May 28-29 general election on Wednesday
with a pledge to create up to 265,000 jobs and warnings against
loose fiscal policies that could lead to a debt trap.
The right-wing Civic Democrats, led by former Prime Minister
Mirek Topolanek, lag in opinion polls and face a tough struggle
to win enough votes to prevent a left-dominated parliament.
Jobs are among key campaign issues in the central European
country of 10.5 million where the unemployment rate has doubled
since 2008 to 9.9 percent last month.
Voters will decide between tax-and-spend policies promoted
by the leftist Social Democrats and right-wing prescriptions for
spending cuts and pro-business reforms as a way to kick-start
economic growth and cut the yawning budget deficit.
The Czechs have been able to finance themselves on the
market throughout the financial crisis and their debt is below
40 percent of gross domestic product, low by EU standards.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For graphs showing the development of support for the main
parties, click on http://r.reuters.com/veb24j
and http://r.reuters.com/hef34j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ But the debt stock has risen sharply and Topolanek told a
news conference Czechs were not immune from a funding crisis.
"Hungary and Latvia are not too far from us, and our
irresponsible behaviour brings closer the day when investors
will refuse to finance our debt. This is the threat," he said,
referring to fellow EU newcomers which have needed IMF bailouts.
The Civic Democrats promised to cut social charges paid by
companies that create new jobs, give incentives to unemployed
people who start their own business, make short-time working
more flexible and ease restrictions on hiring and firing.
After a year of cautious caretaker government, analysts say
markets hope for a decisive victory for either the right or the
left, with a strong government able to push through its agenda.
But neither major party is expected to win a majority and
opinion polls suggest several possible outcomes, from a minority
leftist cabinet to a centre-left coalition or a grand coalition
between the two main parties. A centre-right coalition is also
an outside chance, according to polls.
The budget gap jumped to 6.6 percent last year after the
economic crisis revealed deep structural deficits that had been
hidden by fast economic growth in previous years.
Both right and left-wing parties promise to slash the gap
below 3 percent of gross domestic product within two to three
years, but analysts are sceptical that either has the political
will to implement the necessary reforms.
The country has no target date for euro entry, and the main
parties have said 2015-2016 is a possible timeline.
The Social Democrats plan to raise taxes on companies and
high-earners to pay for their generous welfare agenda.
(Reporting by Robert Mueller and Jan Lopatka, editing by Paul
Taylor)
