* Partial results show centre-right with majority
* Centre-right coalition possible, preferred by markets
(Writes through with early results, expected mandates)
By Jan Korselt and Petra Vodstrcilova
PRAGUE, May 29 (Reuters) - Centre-right Czech parties
favouring austerity to avoid a Greek-style economic crisis led
in a parliamentary election on Saturday and could form a
majority coalition government, partial results showed.
The Social Democrats, who had pledged to raise taxes on
companies and the rich to fund bigger welfare payouts, had the
most votes with 22.9 percent with 75 percent of the vote
counted, but centre-right parties trumped them with a majority.
The pro-business Civic Democrats had 19.6 percent of the
vote. Their potential allies, the conservative TOP09, had 15.7
percent, and the centrist Public Affairs had 10.9 percent.
"If (the results) are confirmed, it would mean a big chance
for creating a coalition of fiscal responsibility, a coalition
this country needs in these hard times, a coalition we are ready
for," Civic Democrat election leader Petr Necas told reporters.
The results appeared to quash fears of many Czechs that the
Social Democrats could rule with backing from the Communists,
who had 12.16 percent. The Communists have not shared power
since their totalitarian rule ended in the 1989 Velvet
Revolution.
It could also prevent protracted coalition talks, which
economists feared could rattle investors who want a decisive
government to shepherd a nascent recovery in the NATO member
state after its economy fell 4.1 percent last year.
The Social Democrats said it was still too early to call.
Full results were expected later on Saturday.
RESULTS
Czech voters have been split between leftist promises to
ward off economic crisis and right-wing warnings that the
policies of their opponents would lead to bankruptcy.
Analysts feared a close or inconclusive result could lead to
months of negotiations and the formation of a weak cabinet
unable to launch reforms. Most investors said a centre-right
government was the best option for the economy.
"With the centre right taking over, the Civic Democrats will
hopefully lead a path toward fiscal prudence. They seem pretty
committed to trying to bring the deficit down," said Barclays
economist Daniel Hewitt. "I think this will be crown positive."
The vote showed clear disillusionment among Czechs towards
big political parties, as both the Social and Civic Democrats
gave up large portions of support to smaller upstart political
groupings like TOP09 and Public Affairs.
"If the results are confirmed, it would be a shock to the
political scene," said political analyst Milan Znoj. "It would
be a big victory for the right and a defeat for the left, mainly
the Social Democrats."
It also showed a wide generation gap, as mostly older and
less well off voters chose leftist parties, while first-time
voters shunned them.
The younger voters went en masse for conservatives who
campaigned on a platform urging fiscal belt-tightening to avoid
debt it said future generations would have to pay.
A main concern is whether officials can rein in a budget
deficit that hit 5.9 percent of annual output last year.
Analysts say right-wing warnings of bankruptcy may be
overblown because public debt of 35 percent of gross domestic
product is half the EU average. But an ageing population --
retirees are expected to outnumber workers by 2050 -- will
create large deficits in the pay-as-you-go pension system.
The Civic Democrats have proposed to create private pension
accounts, cut the public deficit to the EU prescribed level of 3
percent of GDP by 2012, from 5.9 percent last year, cut social
benefits, and reform welfare and the health care system.
"It is good the right wing scored well, we did not expect
that due to all of the screw-ups they have made," said Jiri
Rotrekl, a 50-year-old agriculture engineer who voted for the
Civic Democrats.
