Czech left poised to win election, may face tough coalition talks

Reuters

* Social Democrats hope to form minority government

* New protest parties also expected to score well

* Voting ends at 1200 GMT, results due later on Saturday

By Jana Mlcochova

PRAGUE, Oct 26 (Reuters) - The main opposition centre-leftSocial Democrats looked set to win most votes in a Czechparliamentary election ending on Saturday but new protestparties were also expected to do well, complicating theformation of a new government.

Opinion polls predict Bohuslav Sobotka's pro-European UnionSocial Democrats will win about 25 percent of the vote as Czechspunish centre-right parties, in power for most of the past sevenyears, over painful budget cuts and corruption scandals.

A leftist government led by former finance minister Sobotkawould slap new taxes on banks, utilities and high earners to payfor social programmes and help keep the budget deficit below theEU's prescribed level of 3 percent of national output.

The Social Democrats, out of power since 2006, aim to form aminority government backed in parliament by the Communists,heirs to the totalitarian party that lost power in the 1989"Velvet Revolution". It would be the first time the far-leftparty has had any share in power in the post-communist era.

Financial markets have mostly ignored the election thanks tothe Czech Republic's economic stability, underpinned by lowpublic debt load and the lowest borrowing costs in emergingEurope, but they may be rattled by an uncertain outcome and therisk of drawn-out coalition talks.

Polls opened at 1200 GMT on Friday and close at the sametime on Saturday. Complete results are expected to be known bySaturday evening.

"I voted for a left-wing party because the right-wingparties have discredited themselves. They played unfairly," saidJan Klepl, a Prague resident in his 50s.

SLEAZE

The snap election was called after centre-right primeminister Petr Necas resigned in June in a scandal over alleged illegal surveillance and bribery.

His Civic Democrats are tipped to win only 6.5 percent andits former coalition partner, the conservative Top09, 9 percent.

Anger over sleaze in the central European country of 10.5million people gave a big boost to new protest parties in thefinal weeks of the election campaign, raising the prospect ofprolonged haggling over a new coalition between the SocialDemocrats and smaller groups in the coming weeks.

The biggest of the new parties is ANO, set up byForbes-listed billionaire businessman Andrej Babis, which polledat 16 percent in the latest opinion polls.

"What I want from this election is that this outrageous messfinally ends. I have voted for ANO. I want a change. Babis seemscapable," said Petr, a doctor who declined to give his surnameas he cast his ballot in Prague.

Babis's anti-graft message has struck a chord with voterswho seem willing to overlook his pre-1989 membership of theCommunist Party and links to the then-secret police.

"The current parties have messed it up. They all lie just toprotect each other," said Vilem Zajicek, 50, making clear he wasvoting for one of the new groupings.

Sobotka's hopes of becoming prime minister will hinge notonly on the smaller parties entering parliament.

President Milos Zeman, himself a former Social Democratprime minister, has made clear he expects to have a say in thepost-election negotiations.

Zeman's position will be all the stronger if the margin ofthe Social Democrats' victory is relatively modest and if moreof the newer parties - including a small leftist grouping thatstrongly backs Zeman - make it into parliament.

Zeman has long disliked Sobotka and may try to negotiate acoalition headed by another Social Democrat, analysts say.

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