Babis admits he will not win vote of confidence as EU submits fraud probe

Babis admits he will not win vote of confidence as EU submits fraud probe
Andrej Babis will remain as PM even if he fails to win the vote of confidence on January 10. / Photo: CC
By bne IntelliNews January 8, 2018

Andrej Babis, the Czech billionaire populist, has admitted that his one-party government has little chance of winning a vote of confidence on January 10 but he remains confident that it will amass enough support to win a second vote, he told Czech media over the weekend.

Seven of the other eight parties elected in October’s general election have refused to co-operate with the agrochemicals tycoon because of his alleged involvement in an EU funds fraud. The eighth, the hardline Communists, have only offered to tolerate his minority cabinet in the vote by leaving the chamber but this is not enough as the government would have just the support of Babis’ 78 Ano deputies out of the remaining 185 deputies.

Babis has refused to nominate an alternative premier. His hopes of persuading the other parties to accept him suffered a serious blow over Christmas when the EU fraud watchdog Olaf finally submitted its long awaited report into the Stork’s Nest scandal. 

Babis’ government has so far refused to publish the report but it is clear that it is critical. The government has immediately reacted by removing the Stork’s Nest conference and recreation centre from the EU fund programmes, meaning that the Czech state will have to cover the CZK50mn (€2.3mn) cost of the subsidies.

Stork’s Nest was initially begun by Babis’ Agrofert conglomerate but then transferred to a bearer shares owned company in 2007 so it could apply for EU grants designed for small and medium-sized enterprises. Agrofert then took back the Stork’s Nest project once it had been constructed.

Babis has put out a smoke screen of different excuses over the years and now says the company’s documentation has been lost. But he has in the past admitted that the bearer shares were held by his family. A whistleblowing website has also published bank documents that purport to show that this company persuaded a bank to issue a loan by claiming that it was really owned by Agrofert.

Babis now claims that he had nothing to do with the company and is suing the Julius Suman website. He has also complained to Olaf and the European Court of Justice over the way Olaf handled the probe.

Czech police, now under an Ano minister of interior, are still investigating the case and have asked parliament to remove Babis’ immunity from prosecution. The immunity committee and Babis are dragging the process out, though Babis has finally agreed to appear before the committee on January 9, though parliament will almost certainly not vote on his immunity before the confidence vote on January 10.

Even if Babis loses that vote as expected, President Milos Zeman has already pledged to give the tycoon another chance. During those next few weeks Babis will endeavour to persuade individual parties or deputies to give him backing.

Some parties, notably Ano’s former governing partner, the Social Democrats, as well as the neo-fascist SPD, could eventually succumb to Babis’ blandishments and give him their support or tolerance in the second vote, but their support is likely to be temporary and unstable.

Up to now the Stork’s Nest scandal has had little impact on Babis’ support among the electorate, either because they believe his excuses, or because of the common belief that the whole EU subsidy programme is riddled with fraud anyway.