(Repeats story published late on Wednesday)
* Leaders close to deal on fiscal package
* Parliament to debate plan on Thursday
* Deal key to cut 2010 fiscal gap to 5.2 pct from 7.5 pct
By Jana Mlcochova and Jan Korselt
PRAGUE, Sept 23 (Reuters) - Czech political parties are
close to agreement on tax hikes and spending cuts proposed by
the interim government in an attempt to halt the fast growth in
the budget deficit, party leaders said on Wednesday.
An agreement could arrest fast deterioration of the budget
after the central European economy slumped into a recession, and
prevent what the government said was a threat of a meltdown seen
in Hungary last year.
The cabinet led by Prime Minister Jan Fischer proposed
measures to cut the fiscal gap to 5.2 percent of gross domestic
product next year from currently forecast 7.5 percent, and
warned it may quit if parties do not back the plan if they amend
it heavily.
The fate of the package looked uncertain because the main
leftist party, the Social Democrats, demanded that any welfare
cuts are removed, while right-wing parties rejected any such
amendments.
But after a meeting of party leaders with Prime Minister Jan
Fischer, senior leftist Social Democrat official Michal Hasek
said his party's key demands had largely been met.
"Today's compromise agreement of all parliamentary
parties... will mean that these legislative changes will be
approved in the lower house," he said.
Traders said the news was positive for the currency, which
edged slightly higher after the news to to 25.15 to the euro
<EURCZK=>, but still stood 0.15 percent down on the day.
Social Democrat chief Jiri Paroubek said the agreement would
slightly raise the planned central state budget deficit to 163.6
billion crowns, from the government's proposal of 155.3 billion
crowns ($9.12 billion).
Chief Mirek Topolanek of the right-wing Civic Democrats said
a deal was close but not yet done.
"Some agreement is emerging, which maybe not all would vote
for, but they would not block the final vote... but I do not
want to describe it as a done deal," he told reporters.
Party experts were due to meet later on Wednesday to
finalise the agreement.
Fischer's non-partisan cabinet, formed after the previous
centre-right cabinet fell in March, was due to quit in October;
but a plan to hold an early election was struck down by court
and the cabinet may stay on until the end of the regular term in
June next year.
That forced the administration to propose the 50 billion
crowns ($2.94 billion) in tax hikes and 25 billion in spending
cuts it previously wanted to leave to a new government with a
full political backing.
The agreement would cool deep tensions between the main
parties which have threatened approval of the 2010 budget and
calms the political scene after weeks of turmoil caused by the
failure of the election and uncertainty over the government's
future.
Chiefs of two smaller parties, the Greens and the Christian
Democrats, said they supported a deal on the package which would
take away planned cuts in some benefits such as child support.
The parliament will discuss the package in a fast-track
procedure, and the final vote may come as soon as on Thursday.
(Writing by Jan Lopatka; editing by Ralph Boulton)
