Czech voters swing left over spending cuts

Social Democrats have made big gains in Czech municipal and upper chamber elections as voters punished the ruling centre-right coalition for its fiscal austerity programme.

The Social Democrats are leading in 22 of the 27 upper chamber seats before a second round of voting next weekend.

An opposition takeover of the senate would probably hamper the government's attempts to push through an austerity plan aimed at reducing the deficit. The ruling coalition led by Prime Minister Petr Necas currently enjoys a comfortable 118-seat majority in the 200-member lower house of parliament.

Speaking after the results were released, Mr Necas said that the election would not shake the three-party coalition, which took power in June but warned that an opposition-controlled senate would be “a danger to the country”.

The budget deficit is expected to come to 5.4 per cent of gross domestic product this year and the government is trying to bring it down to 4.6 per cent next year, with the goal of reaching a deficit of 3 per cent in 2013. The government is working to limit welfare and unemployment benefits, halt infrastructure projects, and cut public sector wages 10 per cent, which has led to large street protests in Prague.

Even more radical cuts pushed by the Latvian government did not upset voters this month but the Czechs do not appear to be as amenable to the bitter medicine being handed out by their rulers.

Although the deficit is worryingly high, public debt is still only 37 per cent of GDP, one of the lowest levels in the EU, and Czech debt is the most highly regarded in central Europe, trading at only a small discount to German debt.

The biggest loss of prestige for Mr Necas's Civic Democrats (ODS) was the failure to retain control of the city of Prague, with the Czech capital going to the new conservative Top09 party which is also part of the ruling coalition. Zdenek Tuma, a former central bank governor and now Top 09 candidate, will take over control of the Czech capital, which had been a stronghold of the ODS since the end of communism.

Overall, the Social Democrats received 19.7 per cent of the local election vote, while the ODS took 18.8 per cent, a steep fall from the 36.2 per cent it obtained four years ago. Voting took place on Friday and Saturday.

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