Czech leftist chief says welfare priority to euro

PRAGUE, Sept 15 (Reuters) - The Czech Republic should postpone euro entry by a year or two if meeting the criteria to join earlier would mean cutting social benefits, leftist oppositon chief Jiri Paroubek said on Friday.

Paroubek was prime minister, until earlier this month, of a Social Democrat-led government that had set 2010 as the country's euro entry target.

The party also campaigned on that date in a June national election, which it narrowly lost to the rightist Civic Democrats.

"If we should touch social spending in order to have euro in 2010, then let's rather agree that the euro will be a year or two later," Paroubek told a news conference.

The statement followed comments by new Prime Minister Mirek Topolanek and Finance Minister Vlastimil Tlusty that it was impossible to join the euro in 2010 due to the dire state of public budgets left behind by the previous government.

The Civic Democrats have long said the 2010 date may be impossible and have not set any entry target.

The Finance Ministry has said it saw next year's public sector deficit at 4.6 percent of gross domestic product, far above the 3.3 percent cap set in the country's euro convergence plan and the 3 percent limit for euro entry.

Fiscal problems and inflation have pushed euro adoption dates further into the future in most of the ex-Communist new EU member states.

The new government does not have a majority in parliament and seems set to lose a confidence vote due by Oct. 4.

Paroubek has said he wants to have the next try to form a government in case Topolanek fails. However, he also does not have a majority in the lower house after the inconclusive June polls. ((Reporting by Jan Lopatka, editing by Chris Pizzey; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

Keywords: ECONOMY CZECH EURO