* Czech president appoints new caretaker administration
* EU presidency, budget key tasks
* New PM says budget to be "austere"
(Adds Prime Minister Fischer comment, background)
By Jana Mlcochova
PRAGUE, May 8 (Reuters) - Czech President Vaclav Klaus
appointed a caretaker administration on Friday which will
complete the central European country's term as European Union
president and lead it to an early election in October.
The appointment of the technocrat cabinet led by new Prime
Minister Jan Fischer, the country's chief statistician, ends a
political crisis sparked by a parliamentary no-confidence vote
which overthrew the centre-right administration of Mirek
Topolanek in March.
The Czech Republic, a country of 10.5 million, has seen its
export-driven growth collapse and is grappling with economic
decline, forecast by the Finance Ministry at 2.3 percent this
year.
"Today's economic situation requires that we have a
functioning and an efficient government and I believe that you
will be such a government," Klaus told the new ministers at the
Prague Castle after appointing them.
The prime minister said he would focus on completing the EU
presidency ending in June and drawing up the 2010 state budget,
a tough task amid an economic downturn.
"I am going to prepare, with my colleagues, a state budget
that is very austere... because anything else would mean
serious macroeconomic difficulties with consequences in the
following years," he said ahead of the cabinet's first session.
Fischer's team will stay on for less than six months and has
no legislative ambitions, keeping in place liberal economic
reforms of the Topolanek administration including a flat 15
percent personal income tax rate.
The prime minister has said he wanted to leave all important
decisions on the next government coming from the early election,
which will have a stronger political mandate.
CONFIDENCE VOTE
The government will be dependent on parliamentary backing
from Topolanek's centre-right Civic Democrats and the leftist
Social Democrats, the biggest political parties that will fight
out the autumn election.
Fischer is a pick of both the biggest parties and his
cabinet is expected to win confidence in the evenly-split lower
house, a motion that must come within 30 days.
President of the European Commission Jose Manuel Barroso
congratulated Fischer on his appointment and said the commission
would help during the rest of the EU presidency.
Analysts warned Fischer would have to face a possible
pre-election spending spree endorsed by main parties, which
could bloat the budget gap next year above the 4.5 percent of
gross domestic product forecast by the Finance Ministry for
2009.
The ministry's veteran budget expert and new Finance
Minister Eduard Janota said he wanted the 2010 central state
budget -- the main part of the overall public sector balance --
with a deficit smaller than 150 billion crowns ($7.55 billion),
which the government targets this year.
This would put the overall 2010 public sector deficit at
4.6-4.7 percent of gross domestic product. Without savings
measures, the gap would jump to 6.7 percent, Janota had said.
Janota had said Fischer's cabinet would not push ahead with
plans to adopt the euro currency due to the swelling budget gap.
Stefan Fuele, 46, the Czech ambassador to NATO, takes over
from Alexandr Vondra as European affairs minister. Deputy
Foreign Minister Jan Kohout, 48, replaces Karel Schwarzenberg as
foreign minister.
For FACTBOX on new ministers double click on []
For FACTBOX on key issues double click on []
