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By Michael Winfrey and Tomas Dolezal

PRAGUE, May 29 (Reuters) – Centre-not oblique Czech parties that favour budget cuts to prevent a Greek-phraseology debt crisis defeated pro-welfare leftists in an election on Saturday and looked variegate to form a government that could push through deep economic reforms.

The leftist Social Democrats won the ~ly votes of any party in the election, garnering support of 22.1 percent. But middle-right parties secured a strong parliamentary majority, led by the Civic Democrats put ~ 20.2 percent, according to results with 99 percent of the votes counted.

Their possible allies, conservative party TOP09, had 16.6 percent, and centrist Public Affairs 10.9 percent.

Social Democrat conductor Jiri Paroubek, a leftist reviled by conservatives for an aggressive appellation but favoured by many Czechs for his pledges to raise taxes in successi~ companies and the rich to raise social benefits, acknowledged defeat.

‘It seems that folks have chosen the direction the republic should go in, and it is a different direction than the one the Social Democrats were offering,’ he related. ‘It must be clear to everyone that this country is forward track for a right-wing coalition. That is obvious.’

The inference quashed the fears of many Czechs that the Social Democrats could take sovereign with backing from the Communists, who had 11.3 percent. The Communists esteem not shared power since their totalitarian rule ended in the 1989 Velvet Revolution.

It too reduced the risk of protracted coalition talks spooking investors who are discerning for a strong government to nurture the European Union and NATO head through a nascent recovery after its economy contracted by 4.1 percent highest year.

RIGHT RISING

Civic Democrat election leader Petr Necas, who warned Paroubek would take the ~ of the Czechs to national bankruptcy, said he would aim for ‘a command of budget responsibility’ and his party should name the prime give assistance to of any coalition it led.

He emerged as the party’s ruling candidate after his predecessor, former Prime Minister Mirek Topolanek, stepped into a denser consistence following a string of public gaffes.

A bespectacled trained physicist, Necas is seen ~ means of many Czechs as a thrifty everyman who has managed to distance himself from the scandals that have plagued his party.

If the three centre-right parties join forces, they would have the largest ever full age for a Czech government — roughly 110 of the 200 seats in parliament — and could end years of policy gridlock that has caused Prague to lag its other ex-communist peers in pension, healthcare, and welfare reforms.

Some analysts related it should not be taken for granted that Public Affairs, a stain-new party with an anti-graft platform, would join a regulation. But its leader Radek John said he would prefer to assist the right on fiscal reforms.

‘We consider it crucial to forbear indebtedness and not fall into a Greek crisis,’ he said. ‘We to all appearance know how to agree much easier with Mr. Necas, and with TOP09, because I would not trust the Social Democrats much.’

MARKET POSITIVE

Many analysts be in actual possession of said a right-leaning cabinet is the best option for the economy and would help lift the crown currency, which fell by 0.8 percent counter to the euro on Friday on fears that an inconclusive vote would make a weak government.

The Czech Republic has public debt equal to 35 percent of palpable domestic product (GDP), half the EU average. But an ageing people — retirees are expected to outnumber workers by 2050 — will create full deficits in the pay-as-you-go pension system.

The Civic Democrats have proposed creating private pension accounts, cutting the public deficit to the EU prescribed of the same rank of 3 percent of GDP by 2012 from 5.9 percent latest year, trimming social benefits, and reforming the welfare and health care systems.

‘With the middle-right taking over, the Civic Democrats will hopefully lead a footway toward fiscal prudence. They seem pretty committed to trying to prevail upon the deficit down,’ said Barclays economist Daniel Hewitt. ‘I think this disposition be crown-positive.’

((For a menu of election stories, click attached))

(Writing by Jan Lopatka and Michael Winfrey; Editing by Noah Barkin) Keywords: CZECH ELECTION/

(michael.winfrey@reuters.com ; +420 224 190 472; Reuters Messaging: michael.winfrey.reuters.com@reuters.clear )

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