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Czech Republic in limbo after weekend polls

Czech voters face weeks of political uncertainty or even fresh elections after delivering a deadlock between center-right and leftist parties in weekend general elections.

The full preliminary results showed that the opposition Civic Democrats won the biggest share of the popular vote but not a majority in the first elections since the ex-communist nation joined the EU two years ago.

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

The result was set to disappoint the financial markets as initial exit polls suggested a clear center-right majority, capable of undertaking fiscal reforms economists believe are necessary to make the country's 6 percent growth sustainable.

"From the market's perspective this is a huge disappointment because investors expected a center-right government," said Lars Christensen, an analyst at Danske Bank.

Making the situation even messier, Social Democrat Prime Minister Jiri Paroubek refused to concede defeat, saying the left-of-center parties could forge a parliamentary majority, and warning that he might mount a legal challenge to the election's validity following the "lies and scandals" thrown at his party during the campaign.

"We have been exposed to unheard of pressure, comparable to that of the pre-1989 totalitarian regime," said Paroubek, whose party was trying to extend its eight years in power.

The Social Democrats were put on the defensive days ahead of the election by allegations from a top police officer that Paroubek along with his interior minister and police chiefs attempted to block a murder and corruption investigation that could incriminate high-level Social Democrats.

Paroubek said sleaze accusations levied against him in the final days of the campaign were "absurd slander," lambasting the media for siding with the opposition to undermine him.

President Vaclav Klaus, a conservative who may play a pivotal role in any coalition discussions, dismissed Paroubek's threat and said he would hold talks with Civic Democrat leader Mirek Topolanek today on the election outcome.

The deadlock comes after a heated campaign that underscored the choice voters faced between bold reforms need to make the already prosperous and fast-growing country of 10.5 million more competitive in the global economy or a continuation of a modest reform of the welfare state.
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