Czech right will try to form government

Czech conservative leader Mirek Topolanek said yesterday he would try to form a government despite an election stalemate that gave centre-right and leftist parties exactly the same power in the lower house.

Mr Topolanek's opposition Civic Democrats won the biggest share of the June 2-3 vote but not a majority in the first election since the ex-communist nation joined the European Union in 2004.

The party and its two smaller potential centrist allies, the Greens and Christian Democrats, will hold 100 seats in the 200-member lower house - the same as the ruling Social Democrats and the far-left Communists.

Analysts said ways out of the stalemate included a "grand coalition" similar to one ruling in neighbouring Germany, a wobbly centre-right administration or even early elections.

Mr Topolanek, a former businessman who campaigned hard on a promise to cut taxes and implement fiscal reforms, said he would start negotiations with an open mind.

"Over the coming days, we will seek to talk to partners and I do not even exclude the Social Democrats from the negotiations," he said in a debate with other party leaders.

Social Democrat Prime Minister Jiri Paroubek, whose party came second, signalled he would be ready to back a centre-right government if it moderated its ambitious reform agenda.

"The Social Democrats have never pursued a policy of zero tolerance," he said. "Let's see their programme."

Mr Paroubek also appeared to back away from a threat to challenge the outcome of the election in court, which he made in the heat of the moment after the results came out on Saturday.

The political deadlock, not unusual in the central European nation since it overthrew communism in 1989, reflects a split between Czechs urging bold reforms to make the country more competitive and others favouring a wide welfare net. The result will disappoint the financial markets, who hoped a strong government will emerge from the poll to push through reforms of the bloated health and pension systems and keep the country on track for planned euro adoption in 2010.

Despite robust six per cent economic growth and wealth at 75 per cent of EU average, Czech budget deficit is above euro zone limits while unemployment remains stuck at about eight per cent.

Some political analysts said a coalition of Civic Democrats and Social Democrats with a limited reform agenda might emerge after weeks of wrangling.