VISEGRAD: Babis threatens Czech election losers with nightmare scenario

VISEGRAD: Babis threatens Czech election losers with nightmare scenario
Andrej Babis could be nominated as premier on December 6. / Photo: CC
By Robert Anderson in Prague November 23, 2017

Billionaire populist Andrej Babis has edged closer to becoming Czech premier after his Ano party’s candidate was elected parliamentary speaker on November 22. However, Babis’s nominee was backed only by extremist or non-traditional parties, heightening fears that he will be forced to offer critical concessions to the extremists to win their support for his government.

Radek Vondracek won the support of 135 deputies in the 200-seat parliament to become speaker. In the secret ballot he is thought to have won backing from Ano’s 78 representatives plus the hardine Communists (15) and neo-fascist Freedom and Direct Democracy party (22), together with the Czech Pirate Party (22).

Now that the speaker has been elected, Social Democratic Prime Minister Bohuslav Sobotka is expected to resign on November 27. This would enable President Milos Zeman to appoint Babis in his place on December 6, the president's office said on November 23. The agrochemicals billionaire’s political vehicle convincingly won general elections in October, crushing the Social Democrats (CSSD) with whom he had ruled in a quarrelsome coalition for four years.

So far the traditional democratic parties have refused to join Babis in government or support a minority administration led by him because he has been charged with a fraudulent receipt of EU funds. On November 21, Czech police resubmitted an application to lift Babis’ parliamentary immunity from prosecution, something that will be voted on in the next couple of weeks. Babis, who denies the charges, has so far refused to stand aside to allow another Ano politician to become premier.

Babis would prefer to work with the traditional parties, which would give the alleged former Communist secret police agent international credibility. He is therefore engaging in a game of brinkmanship by flirting with the extremists.

The Communists have offered to support Babis as prime minister in a vote of confidence, while remaining outside the government, while political commentators believe Tomio Okamura’s Freedom and Democracy Party (SPD) could also give its backing. This would give Babis 115 votes, enough to win a confidence vote.

Both extremist parties have already been rewarded with leadership of key parliamentary committees. Stalinist Stanislav Grospic has been elected chair of the mandate immunity committee, which will scrutinise the police application to lift Babis’ immunity from prosecution before parliament votes on it, while SPD deputy Radek Kotan is likely to chair the security committee. Kotan is a regulator disseminator of Russian fake news and has said that the Czech Republic “lives under a Euro-fascist totalitarianism".

The Communists are ambivalent about EU membership and want to leave Nato, while the SPD is ambivalent about Nato and wants to leave the EU. Both, like President Zeman, are apologists for Vladimir Putin’s Russia. Both parties would support referenda on EU or Nato membership. Opinion polls show that Czechs could vote to leave the EU, but Nato membership still remains popular.

Babis opposes sanctions on Russia and is critical of the EU, particularly over migration, and has toyed with the idea of changing the constitution to enable holding a binding referendum on EU membership, something also supported by President Zeman. Nevertheless Babis backs continued EU membership and it is likely that any referendum bill would have to specifically exclude the EU to win sufficient parliamentary support.

Strong position

Even if Babis fails to win the first confidence vote he would remain as premier and could stay in office until well into next year, because he looks likely to be given several attempts to secure parliamentary backing.

President Zeman has already declared that he will give Babis two attempts to form a government.  Zeman has been openly supporting Babis, who in return has so far declined to back any rival to Zeman in the upcoming presidential election in January. 

The new Ano speaker will choose the third and last candidate for PM, if that becomes necessary, so Babis can effectively block another party’s attempt to form a government, something that is anyway very unlikely given Ano’s convincing election victory and the fragmented make-up of the new parliament.

Once his cabinet is nominated, Babis, the country’s second richest man, can install his own nominees in state-owned companies such as energy giant CEZ, which he has attacked as a CSSD fiefdom, and Cepro, the pipeline company intimately linked with his own agro-chemical empire Agrofert. Babis, who owns two of the largest Czech daily newspapers, could also seek to make parliament change the board of public broadcaster Czech Television, which he has accused of being biased against him.

This will heighten longstanding concerns over the inevitable conflicts of interest between his political and business roles, something that has not properly been addressed by putting Agrofert into a trust where he remains the ultimate beneficiary.

Critics have long accused him of being behind government policies that have made Agrofert the biggest corporate beneficiary of EU subsidies, enabling it to receive more in aid than it pays in taxes. It is speculated that Babis entered politics in the first place to defend his businesses, because he was worried by the rise of other so-called Czech-Slovak oligarchs and feared his position was being eroded.  Perhaps he could also see the yawning gulf opening up between the electorate and the politicians he had hitherto relied on and realised he needed to fill it before someone else did.

Huge fear

Babis could also try to change who holds key judicial posts such as the Prosecutor General, which could affect the ongoing investigations into his business and personal affairs, such as his purchase of Agrofert’s entire issue of CZK1 bonds, thereby avoiding tax. Babis was accused of blocking an investigation by his own ministry’s tax police into the affair, while at the same time using tax probes to harass business rivals

The EU fraud charges, which led to his sacking as finance minister in May, remain his biggest problem. Babis attacked the Czech police on November 21 for submitting an application to lift his parliamentary immunity over their investigation into the Stork Nest conference centre. He is accused of pretending to transfer the project to his family in order to win CZK50mn in EU subsidies designed for small businesses. 

“The speed at which they are coming after me again only shows what huge fear the corrupt system has; how much this old system is afraid of me and how tenaciously they are trying to get me,” Babis told CTK news agency.

Babis' immunity was lifted before the election but as he has now been re-elected, a new vote is needed in the new parliament. It is possible that, with the backing of the Communists and the neo-fascists, parliament could now refuse to lift his immunity, though this would cause an outcry. Whether the Czech police have enough evidence to convict him anyway, however, is questionable.

What Babis cannot control is the investigation by the EU watchdog Olaf into the Stork Nest scandal, a conclusion from which is expected by the end of this year. Were Olaf to find that there has been fraud, it is difficult to see how he would be able to become prime minister. Even Ano’s supine deputies would be likely to baulk at that.

Assuming he is able to eventually win a confidence vote, Babis may be able to govern as a minority government for a full term by doing deals on individual issues with parties to the left and the right. Babis, like Ano, has no fixed ideology, though the party is a member of the liberal Alde group in the European Parliament. It backs higher state investments (which would appeal to the Social Democrats and the Communists) and lower taxes and less business regulation (supported by a group of four small centre-right parties).

Moreover, if the other parties refused to co-operate, Babis could also threaten to hold fresh elections, which they can scarcely afford to campaign for, and in which he would likely win an even bigger mandate.

Given that Babis holds all the cards, and will only get stronger as he consolidates his grip on the government, it is highly probable that one of the traditional parties will eventually fold and agree to join his cabinet, giving him the necessary political cover, both domestically and internationally.

There is speculation that Petr Fiala, leader of the rightwing Civic Democrats, could be challenged by Vaclav Klaus junior, son of the party’s founder, the former prime minister and president Vaclav Klaus. Klaus junior is regarded as more open to working with Babis, who built up Agrofert in the early 1990s partly under his father by privatising state-owned chemical companies.

But the weakest link is probably the Social Democrats, which are in turmoil after their election fiasco, and are shortly to elect a new leader who could be more open to cutting deals with Babis to maintain the party's influence in state companies such as CEZ. Zeman, a former leader of the Social Democrats who still has great influence there, has backed the party joining Babis’s government. If this happened, the political marriage of convenience between Zeman and Babis would indeed be consummated.

Graphic: OSW