OSTRAVA: The Czech Republic's likely next prime minister says he plans to increase taxes on big firms and banks and put new emphasis on creating jobs to pull the economy out of a "deadly spiral".
Bohuslav Sobotka, re-elected on Friday as chairman of the opposition Social Democrats, also reaffirmed his openness to a deal with the mostly unreformed Communists, a once unthinkable approach in the former Soviet bloc country.
The Social Democrats enjoy a commanding lead in opinion polls and are on target to win a parliamentary election in mid-2014.
That would extend a recent trend in former communist Central and Eastern Europe, where frustration with austerity has pushed several governments from power.
Sobotka said that with unemployment at a record high above 10 percent, according to analysts' estimates, creating jobs was just as important as controlling the budget deficit.
"The deficit is not an idol; a government must also take care of employment and living standards," he told a two-day party congress ending on Saturday.
In an interview with Reuters, he said the primary goal was to keep the public sector deficit below 3 percent of Gross Domestic Product.
But he added: "We want to change economic policy so that the single goal is not only lowering the deficit but (there is) a second goal of employment."
The centre-right government of Prime Minister Petr Necas plans to cut the deficit to 2.9 percent this year, below the European Union's 3 percent limit, from 3.5 percent in 2012.
But it has lost popular support because of a series of sales and income tax hikes, and is limping into its final year of rule with its once-record parliamentary majority now transformed into a minority after a junior coalition party broke up.
The economy probably started 2013 with a seventh straight quarter of either contraction or stagnation, according to independent analysts.
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