Czech government set to lose confidence vote, but Babis' party likely to retain power

Reuters News
Posted: Jan 09, 2018 6:03 PM

By Jason Hovet

PRAGUE (Reuters) - Czech Prime Minister Andrej Babis, battling allegations his business empire illegally tapped European Union subsidies a decade ago, looks certain to lose a parliamentary confidence vote on Wednesday.

The billionaire's ANO party won an October election by a wide margin but fell short of a majority and has struggled to gain partners.

If his minority government, appointed in December, loses the confidence vote it will stay in power until a new one is formed. President Milos Zeman has promised to allow Babis another try.

But the other eight parties in the lower house of parliament have refused to support Babis while fraud charges hang over him. He denies wrongdoing in the case.

Losing the confidence vote would lead to further weeks or months of political talks, giving his opponents more time to try to unseat him as prime minister.

However, ANO's convincing election victory means any viable government will involve the party, with or without Babis, and analysts see the fear of early elections pushing the other parties to eventually compromise.

Babis himself is counting on more talks. He told newspaper Pravo: "It already looks like the government will not get confidence at the first attempt."


The tussle over a new government has not so far troubled financial markets, thanks to the country's strong economy and sound budget.

ANO has won support with promises to run the state more efficiently and end political corruption.

Babis is the Czech Republic's second richest person through his Agrofert conglomerate, the country's biggest private employer with firms in food, farming, chemicals and media.

He is fighting allegations he hid ownership of a farm and conference center to get a 2 million-euro subsidy earmarked for small businesses when he ran Agrofert.

An investigation by the EU anti-fraud office OLAF has found "irregularities", according to a report released last week by the Finance Ministry.

Babis has been formally charged in the case but has immunity from prosecution as a member of parliament, unless lawmakers lift this in a coming vote. He has called the charges politically motivated.

Political analyst Borivoj Hnizdo said the subsidy affair would figure in further party talks, but Babis still might have a stronger hand than his rivals.

"Babis has a bigger chance in a second round because a lot of parties do not want early elections," he said. "It would be financially difficult for some parties and some parties could fear losing votes."

(Reporting by Jason Hovet; editing by Andrew Roche)