UPDATE 1-Czech cbanker urges reforms to precede euro target

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PRAGUE, March 2 (Reuters) - Czech central bank board member Vladimir Tomsik urged the government on Friday to avoid proposing any specific target date for euro adoption before committing itself to a clear agenda for economic reforms.

Tomsik wrote in an economic column in the business daily Hospodarske Noviny that setting target dates without weighing the risks involved in waiving independent monetary policy and the economy's potential could hurt credibility. Members of the European Union since 2004, the Czechs have agreed to work towards joining Europe's single currency area at some point in the future and investors have placed massive bets on Czech convergence and eventual euro zone membership.

The centre-right government dropped 2010 as the target date for adopting the euro last year due to a worsening fiscal outlook. It has not set a new euro entry target but the finance ministry has mulled 2012 as a possible date.

"Should the debate be serious indeed, then neither the CNB nor the public should be confronted with final timetables for adopting the euro, which are based neither on analyses nor on a road map for necessary reforms," Tomsik wrote in the newspaper.

He said reforms should aim to boost the economy's ability to compete in global markets, reduce public transfers across the economy and make internal markets, and particularly the labour market, more flexible.

He said a wide public finance deficit -- seen at 4 percent of gross domestic product (GDP) this year -- was the key "barrier" to both sustainable growth and timely euro entry.

"The key factors ensuring the future stabilisation of the Czech economy, notwithstanding whether it is a euro zone member or not, must be the requirement to balance public budgets in the medium-term," wrote Tomsik.

The three-party government, which won a parliamentary vote of confidence in January, has agreed in its manifesto that it will slash the fiscal deficit to 3.0 percent in 2008, bringing it into line with the ceiling imposed by euro adoption rules.

The government aims to cut the deficit by stemming the growth of social expenditure, and reforms to the health and pension systems. It also aims to cut taxes hoping that such a move will help encourage people to pay their taxes.

Many of the plans will face stiff opposition in parliament, where the government controls just 100 out of 200 seats.