Czech left heads for election win, may struggle to form government
PRAGUE (Reuters) - The Czech Republic looks sure to swing left in this weekend's early election when voters punish centre-right parties for spending cuts and graft scandals that have marred their nearly seven-year rule.
Opinion polls show the Social Democrats, led by ex-finance minister Bohuslav Sobotka, emerging as the largest party with about 26 percent but they will need a coalition partner.
New anti-establishment parties tapping into Czechs' frustration with sleaze are also expected to score well and this may complicate the coalition talks.
The central European country of 10.5 million people has started to emerge slowly from six quarters of recession but the outlook for economic growth remains weak as households are reluctant to spend.
The Social Democrats plan to help poorer Czechs by rolling back the previous government's unpopular pensions and healthcare reforms. They want to raise taxes for big firms and top earners to keep the budget deficit below 3 percent of national output.
Sobotka, 42, has broken a taboo by saying he is ready to form a minority cabinet that would be supported in parliament by the Communists, who have not had any share in power since their totalitarian rule ended in the 1989 "Velvet Revolution".
Sobotka believes his party needs at least 30 percent of the vote for a minority government to function successfully with the backing of the Communists, who polls show becoming the second biggest party with 18 percent of the vote.
"The only election result that makes sense for us is a strong mandate to form a government," he said on Wednesday.
But he may instead have to turn to one of the newer parties, such as the centrist ANO (Yes) movement of business tycoon Andrej Babis, whose anti-graft message has struck a chord with voters. ANO is tipped to pick up 16.5 percent of the vote.
"I will vote for Babis. He has enough (wealth) so he doesn't need to steal... I voted before for the (centre-right) Civic Democrats, but that is just impossible now," said Michael Turek, 27, a teacher.
Babis is listed in the Forbes list of billionaires with net worth estimated at $2 billion and his Agrofert empire spans hundreds of food and chemical firms and two daily newspapers.
Critics say Babis, a onetime Communist Party member, has flourished in the same murky post-communist business environment he now rails against.
A poll earlier this year showed that being a politician is the least respected job and a Gallup poll showed last week 94 percent of Czechs think corruption is widespread in government.
The outgoing centre-right parties, the Civic Democrats and the TOP09, whose cabinet collapsed over illegal surveillance and corruption allegations in June, are headed for a heavy defeat, tipped to win only 6.5 and 9 percent respectively.
Apart from problems that would arise from a fragmented parliament, Sobotka will also have to convince President Milos Zeman to appoint him as prime minister.
Zeman, also a leftist, has strained relations with Sobotka and has hinted he may prefer a different prime minister. This would become more likely if the Social Democrats' margin of victory is weak and if a small party of Zeman's allies clears the 5 percent hurdle to enter parliament.
Financial markets have so far largely ignored the election, a testament to the country's economic stability and low debt at 46 percent of gross domestic product, about half of the European average. But prolonged uncertainty could unsettle investors.
A Social Democrat-led government, especially if it depends on the Communists, may forge warmer relations with Russia.
The next government will have to decide whether Russia's Atomstroyexport or U.S.-based Westinghouse, a unit of Japan's Toshiba Corp, wins a contract to build a new nuclear power plant at Temelin.
While coalition talks drag on after the election, the Czech Republic will continue to be ruled by a caretaker government Zeman appointed in July, led by Jiri Rusnok.
(Additional reporting by Robert Muller; Editing by Gareth Jones)
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