* Czechs consider eurobond after spreads drop
* Borrowing needs rise as crisis boosts budget gap
* Czech CDS sharply down from all-time highs
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By Martin Dokoupil
PRAGUE, April 21 (Reuters) - The Czech Finance Ministry has begun to consider tapping international markets with a eurobond again after credit spreads dropped, Finance Minister Miroslav Kalousek said on Tuesday.
"Spreads are somewhere around 170, which is the moment when we are beginning to consider a eurobond issue," Kalousek told Reuters on the sidelines of a financial conference.
The ministry had earlier halted plans to raise debt in foreign markets due to high spreads.
The Czech government, like other European countries, faces a jump in borrowing needs as an economic downturn boosts the budget deficit.
Kalousek -- whose cabinet will leave office on May 9 -- has forecast the central state budget gap would reach around 150 billion crowns ($7.12 billion) this year, far above the planned 38.1 billion.
He told Reuters on Monday the overall fiscal gap would reach about 4.5-5 percent of gross domestic product this year.
The country's economy is expected to shrink by about 2 percent this year, but thanks to relatively low exposure to foreign debt and a low current account and budget deficits, the country has been less exposed than many others to a crunch in financing.
In February the government dropped a plan to sell a 5-year eurobond after mandated banks offered spreads of about 250 basis points, which the ministry considered poor at the time and potentially hurting the domestic bond market. The government said at the time it could finance its deficits domestically this year but still kept the door open to a potential eurobond issue.
The Czech Republic's outstanding eurobond maturing in 2014
The country's 5-year credit default swap, a measure of risk, has dropped to 132 basis points on Tuesday from an all-time high of 350 seen in mid-February.
Kalousek has said he was not looking just at the absolute size of the spread but also at how it compared with other countries in the region which he said should have varying risk premia.
Slovenia, a euro zone country relatively spared in the economic crisis, priced a 5-year eurobond at 160 basis points over swaps on March 25.
Slovenia is rated 'AA' by Standard and Poor's, above the Czech Republic's 'A' rating. (Writing by Jan Lopatka; editing by Chris Pizzey)