UPDATE 1-Czechs set election for May, leftists lead

* Election called for May 28-29, last possible dates

* Budget, euro, corruption are key tasks for next cabinet

* Leftists lead polls but number of coalitions possible

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PRAGUE, Feb 5 (BestGrowthStock) – Czech President Vaclav Klaus
called a parliamentary election for May 28-29 on Friday, the
last possible date in the EU member’s four-year term.

The vote, one of a string of elections in central Europe
this year, will end the tenure of a caretaker cabinet and bring
to power a government with a mandate to tackle the fiscal
deficit and prepare the country for adoption of the euro.

The leftist Social Democrats lead opinion polls but no party
is expected to win an outright majority and a variety of
coalitions is possible, including a grand coalition of Social
Democrats and right-wing Civic Democrats. [ID:nLDE60Q2EM]

The new cabinet will replace the administration of
non-partisan statistician Jan Fischer, formed after a
centre-right minority cabinet fell last March.

Klaus said he chose the last possible date to let the
parliamentary term run in full and to avoid accusations he was
favouring any party.

The biggest political parties had called on Klaus to pick an
earlier May date to give the next cabinet more time to prepare
the 2011 budget.

The caretaker cabinet, lacking a parliamentary base, has
shied away from taking any major decisions on tax and spending
reforms, the timing of euro entry or construction of a new
nuclear power station.

The Social Democrats want to cut the gaping deficit mainly
through increasing taxes for the rich, and to join the euro
around 2015, a plan that analysts called optimistic.

Their leader and former prime minister Jiri Paroubek has
pushed for extra social spending so that people’s buying power
is not affected by the economic crisis.

Their main rivals, the fiscally more conservative Civic
Democrats, have been hurt by infighting among their leaders and
have suffered from sleaze scandals in their stronghold, the
capital Prague.

Last year’s public sector deficit hit 6.6 percent of gross
domestic product, far above the euro zone ceiling of 3 percent
but lower than those of many euro zone members. The government
aims to cut the gap to 5.3 percent this year.

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(Reporting by Robert Mueller; editing by Tim Pearce)

UPDATE 1-Czechs set election for May, leftists lead