Centre-right ahead in Czech election

Jan Korselt and Petra Vodstrcilova 

     
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 towards 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. Reuters