Czech ruling party sees fiscal reforms passing Wed

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PRAGUE, June 4 (Reuters) - The senior party in the centre-right Czech government will put a controversial fiscal reform package before parliament on Wednesday and expects the bill to be approved in the first of three readings, a party official said.

Petr Tluchor, head of the Civic Democratic Party's (ODS) caucus, said he expected the chamber to back the bill, which is intended to cut the country's budget gap to 2.3 percent of gross domestic product by 2010 from over 4 percent seen this year.

The three-party government has just 100 votes in the 200-seat lower house of parliament, so it needs the full support of its own deputies and the vote or abstention of at least one opposition deputy.

Tluchor said the government was trying to fix a time for the vote so it can ensure all its deputies are present. The lower house will decide a schedule for the session on Tuesday.

"We are trying to have it right at the beginning (of Wednesday's session) so there is enough space and calm," Tluchor told Reuters.

The government has said it will seek an early election if parliament rejects the reforms, which include small cuts to social and discretionary spending.

The package also rebalances taxes, mainly in favour of companies and top wage earners, a structure that has angered the leftist opposition as well as some in the government camp.

Tluchor said he had spoken to two deputies who defected from the leftist Social Democrats about supporting the government, and that he believed they would help the reforms go through in the first reading.

"I have received no commitment from them, but it seems to me that they realise the need for some changes (in tax and spending policies)," Tluchor said.

He said he believed a rebellious ODS deputy, former Finance Minister Vlastimil Tlusty, would also support the bill in the initial vote.

Tlusty, who is demanding bigger tax cuts than the government is proposing, was not immediately available for comment. He has indicated he will try to amend the bill during its second reading over the summer.

The third and final reading is expected in late summer or early in the autumn, ahead of a Sept. 30 deadline for submitting the 2008 budget to parliament.