Billionaire Pulls Back From Brink on Czech Extremist Backing

(Bloomberg) -- Czech billionaire Prime Minister Andrej Babis said he will try to resume government talks with the Social Democrats, snubbing the president’s recommendation to seek backing from two extremist parties.

Babis is trying to break a deadlock that is keeping him in a caretaker role six months after winning elections because mainstream parties have refused to team up with him while he faces a fraud investigation. His ANO party’s decision shows the degree of discontent among its senior members with the prospect of ruling with forces that seek to take the nation out of NATO and the European Union.

“If ANO wishes to resume negotiations, we will be happy to hear their thoughts,” Social Democrat Chairman Jan Hamacek said on Twitter.

His sudden return to the table with the Social Democrats steers him away from a clash with other leaders in the EU, which has been struggling to deal with neighboring Poland and Hungary over backsliding on democracy. Since winning the October ballot vowing to keep out Muslims and railing against meddling from Brussels, Babis has sought to win the respect of European leaders like German Chancellor Angela Merkel with assurances that he’s a pro-EU leader worthy of being heard.

Babis, the second-richest Czech, needs to secure backing to win parliamentary approval after his first single-party government failed to do so in January. His first round of talks with the Social Democrats collapsed over their demands for him to either stay out of the cabinet or cede control of the Interior Ministry. What’s also splitting the former coalition partners is the police probe of an alleged misuse of EU aid funds at one of his businesses. Babis denies wrongdoing and says the case was fabricated by his rivals.

Billionaire Pulls Back From Brink on Czech Extremist Backing

Still, the two parties may agree to work together if Babis gives up insisting on controlling the Interior Ministry, said Stanislav Balik, a political scientist at Masaryk University in Brno, the country’s second largest city.

“Babis is able to react very quickly to swings in public mood,” he said. “If he decides that his insistence on controlling the Interior Ministry is hurting him, I can imagine that he will back down.”

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