* Foreign issuance well below limit set in financing plan
* Timing of any issue still uncertain, elections eyed
(adds comments on Greece, background, markets)
By Robert Mueller
PRAGUE, Feb 2 (Reuters) - The Czech Republic could issue 1-2 billion euros worth of foreign-currency bonds in 2010, Finance Minister Eduard Janota said on Tuesday, significantly below the ministry's own ceiling and implying higher domestic borrowing.
The Czechs face record high borrowing this year, and its financing plan allows foreign bonds to cover up to half of the expected 280 billion crowns ($15 billion) in gross borrowing.
About a fifth of the country's 269 billion crowns in borrowing last year was on foreign markets.
"The volume could be somewhere between 1-2 billion euros," Janota told Reuters when asked about foreign debt plans for 2010.
Janota did not specifically comment on plans revealed by an official at the ministry's debt department who said last month that, as part of foreign issuance, the Czechs could issue up to $2 billion in dollar-denominated bonds.
Janota said he has not yet decided whether to wait for a general election due in May before tapping foreign markets.
"I will look very thoroughly at the timing, whether it is going to be right before the elections (in May) or in April, or if it will be only in July," said Janota, who is part of a caretaker cabinet that has led the country since May last year.
Janota's comments came after local markets closed.
Central European debt markets have mostly shaken off worries over Greece's spiralling budget deficits. Janota, though, said worries around shakier euro zone members could impact international debt markets, raising the cost for the Czechs.
Czech yields rose sharply in January, partly on local supply fears and also a correction from a rally to end 2009 when issuance was cut below expectations.
The 10-year bond yield is quoted around 4.45 percent, up
from 4 percent to start the year. The spread over German bunds
has doubled to around 130 basis points.
The Czech interim cabinet has pushed parties to take budget saving measures before parliamentary polls in the spring.
Last year's budget deficit reached 6.6 percent of gross domestic product due to lost revenue and higher social spending in the global economic crisis, and the interim government's 2010 budget aims to cut the gap to 5.3 percent.
However, rising debt costs and maturing debt are seen keeping borrowing at record levels over the next three years.
The ministry has tried to diversify its financing, including a Swiss franc bond in October and euro-denominated bonds on local markets. Last year, it also sold 1.5 billion euros of 5-1/2 year bonds on foreign markets in April.
Markets have expected countries like the Czech Republic and Poland, both who have lower foreign debt than peers in the region, to tap foreign markets as part of plans to ease the issuance burden on domestic markets. ($1=18.67 Czech Crown)
(Writing by Jason Hovet)