Czechs to vote in close national elections

By Jan Lopatka

PRAGUE (Reuters) – The Czech Republic holds national
elections on Friday that are widely expected to be a close
contest between ruling leftists who took the nation into the EU
and right-wingers vowing to stop corruption and slash taxes.

The outcome could determine the country’s stance toward any
deeper European Union integration and whether it will adopt the
euro currency.

The Czech Republic has enjoyed an economic boom under a
centre-left coalition led by Prime Minister Jiri Paroubek’s
Social Democrats, but a string of sleaze scandals may damage
the government’s standing with voters after eight years in
power.

Final opinion polls put the rightist opposition Civic
Democrats slightly ahead of Paroubek’s party, with only three
others, the centrist Christian Democrats, the Communists and
the Green Party, seen passing the 5 percent threshold to gain
entrance to the lower house of parliament.

But after a campaign marked by verbal and even physical
attacks, no party stands a chance of winning an outright
parliamentary majority in the two-day elections and several
different alliances are possible in the chase for office.

The likely outcomes are either a centre-right coalition led
by the Civic Democrats or a minority Social Democrat cabinet
backed by the Communists, who have been shunned since their
Soviet-backed totalitarian rule ended in 1989.

EURO DIFFERENCES

One division between the main parties is that the Social
Democrats say they will take the country into the euro zone by
2010, while the Civic Democrats are cool on euro adoption.

Financial markets will also be watching to see whether the
government that emerges from the polls is strong and committed
to reforms that will be sustainable to cut budget gaps.

The Social Democrats and Civic Democrats clashed in the
final days of the campaign over accusations by a senior police
official that Paroubek and other top officials were hindering
investigations into organized crime to shield colleagues.

Paroubek, who took over the Social Democrats last year
after they were battered by financial scandals and led them
back into the race, has rejected the accusations.

The Social Democrats balance a pro-business stance with
promises to boost social spending on pensions and families, to
be financed by fast growth and dividends from state firms.

The Civic Democrats pledge deep reforms to achieve
long-term stability in health care, pensions and the budget.

They promise to cut taxes on all income, introducing a flat
tax of 15 percent. Allied with eurosceptic President Vaclav
Klaus, the Civic Democrats oppose any deeper EU integration.

The Social Democrats steered the Czech Republic into the EU
in 2004.

“Let’s halt the rise of the Communists which threatens us,”
Civic Democrat leader Mirek Topolanek said in a debate on
Thursday. “Let’s halt corruption which has grown through the
administration and police.”

Polling stations will be open from 2 p.m. (1200 GMT) until
10 p.m. on Friday and from 8 a.m. until 2 p.m. on Saturday.
Preliminary results are expected on Saturday evening.