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Czech left set to win election but new parties cloud outlook

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(Globalpost/GlobalPost)

By Jason Hovet

PRAGUE (Reuters) - Czechs went to the polls on Friday in an election that will swing the nation toward the left after unpopular budget cuts and graft scandals felled a center-right government.

Markets have mostly ignored the election thanks to the country's stability, underpinned by low debt load and the lowest borrowing costs in emerging Europe, but they may be rattled by an uncertain outcome and the risk of drawn-out negotiations.

The pro-Europe Social Democrats, promising to slap new taxes on big firms and high earners to pay for social programs, were likely to win the largest portion of the vote but short of a majority, and forming a strong cabinet may prove elusive.

The party, out of power since 2006, may call on the far-left Communists to support its minority government, breaking a taboo held since the 1989 Velvet Revolution that overthrew Soviet-dominated communism in the now European Union state.

Polls opened at 1200 GMT on Friday and close at the same time on Saturday. Results are expected on Saturday afternoon.

"The right in this country is a catastrophe. (I'm for) European politics and social politics," said Vitezslav Zemanek, a 38-year-old translator who said he would vote for the Social Democrats or, possibly, the Green party.

With voters angry at established parties, mainly on the right, a number of new groupings will likely win seats in the 200-member lower house, which may force the Social Democrats to seek other, untested partners for a government.

These include the ANO (YES) party started by Forbes-listed billionaire and food and agricultural magnate Andrej Babis, which shot up to the third spot in final opinion poll on Monday, behind the Social Democrats and Communists.

POLITICAL FRAGMENTATION?

"We are ready to talk to parties on the left and center," Social Democratic chief Bohuslav Sobotka told Czech Radio. "The more parties that make it to parliament, the tougher it will be to find a deal and the less stable the government will be."

Sobotka aimed to win at least 30 percent of the vote to establish a strong mandate. The Social Democrats have pledged to keep the budget deficit below 3 percent of gross domestic product. To do so, they want to raise taxes on banks, utilities, telecoms companies and high earners.

The Social Democrats also plan to roll back unpopular pension and health reforms taken under the previous center-right government of the Civic Democrats and conservative TOP09.

That administration unraveled in June, almost a year before scheduled elections, when a scandal over alleged illegal spying and bribery ensnared Prime Minister Petr Necas and his top aide, whom he later married.

TOP09 and the Civic Democrats are fourth and fifth in polls and have only thin chances to return to any coalition.

The Social Democrats' plan to ask the Communist Party for parliamentary support is not going down well with those Czechs who still resent the party's four decades of authoritarian rule.

Overnight on Friday, a group called Dekomunizace (De-communization) raised a giant poster of Russian President Vladimir Putin in a Stalinesque pose in a sprawling park overlooking Prague's historic center, where a statue of the former Soviet leader Joseph Stalin once stood in the 1950s.

The protest was aimed at the Communists as well as President Milos Zeman, a Social Democrat who critics have accused of trying to extend his powers since winning the country's first direct presidential election.

(Additional reporting by Jan Lopatka; Editing by Mark Heinrich)

http://www.globalpost.com/dispatch/news/thomson-reuters/131025/czech-left-set-win-election-new-parties-cloud-outlook