Tycoon Leader Closes In on Czech Election Win Despite Scandals
Czech Tycoon Set to Win Elections as Scandals Cloud Path to Rule
(Bloomberg) -- Billionaire Prime Minister Andrej Babis was on the path to win the Czech Republic’s parliamentary elections, but a strong showing by his rivals signaled a tough battle to find support for a new government.
Babis’s ANO party overcame public outrage over legal scandals to win 29.3% of votes in the two-day elections, according to results from 64% of districts counted. The center-right coalition SPOLU, which campaigned to curb state debt, was second with 25.1% and a center-left group led by the Pirate Party had 14.2%, the Statistics Office said Saturday.
One of the richest Czechs, with an estimated net worth of $3.2 billion, Babis had a strong lead in opinion polls before the ballot despite his government overseeing one of the world’s highest Covid-19 death tolls per capita. He also faces accusations that one of his companies fraudulently tapped European Union funds and revelations from the Pandora Papers that he conducted offshore deals to buy property in France.
Babis managed to win over voters despite his legal tussels, appealing to many older and less-educated Czechs by raising pensions and public salaries while also warning that Muslim immigrants would overrun the country of 10.7 million if his opponents took power.
Still, the scandals have limited Babis’s governing options as mainstream parties reject the idea of joining him in government. That opens the prospect of Babis pairing up with the far-right nationalist Freedom and Direct Democracy party, known as SPD, to stay in power.
“It’s quite clear that ANO is set to win, but the bigger question is whether that means having the highest number of mandates or having coalition partners to form a government with,” said Jan Kvetina, a political scientist at the Czech Academy of Sciences. “If no smaller parties make it over the threshold to get the parliament, SPD is the only potential partner for ANO, but that is not preferred by either side, and for Babis it would be a tough nettle to grasp.”
His long-time ally President Milos Zeman has essentially pledged to name Babis as prime minister-designate after the election and can give him unlimited time to stay on as caretaker and drag out coalition negotiations. If the results are confirmed, it would give Babis his sixth victory in elections, including ballots for local administrations and European Parliament, since 2014.
One potential complication to that timetable may be Zeman’s medical condition. The 77-year-old has type-2 diabetes and his office said he canceled a TV appearance scheduled for Sunday due to recurring health complications.
The fiscally conservative SPOLU and a center-left coalition led by the Pirate Party calling for stronger ties with the EU -- were on the brink of clinching a potential majority. But even if they hold the most votes between them, Zeman’s stance gives them little prospect to unseat Babis and means they can only paralyze his agenda.
Although he avoided the type of rule-of-law clashes that have pitted Brussels against Hungary and Poland, the concern for the European Union is that Babis may look to the extremes of the political spectrum, which would widen a rift between the bloc’s leadership and the eastern members over democratic values.
Since taking power in 2017, Babis has faced repeated scrutiny by law enforcement and the European Union into Agrofert AS, his chemicals, agriculture and media empire.
An EU audit has found him in conflict of interest because as premier he holds a voice in the distribution of the bloc’s funds while benefiting from those Agrofert receives. At home, Czech prosecutors are reviewing whether to charge him in a case where one of his companies is accused of misusing 50 million koruna ($2.3 million) in EU financing.
Police are also investigating reports from last week’s Pandora Papers leak that he moved $22 million through offshore companies to buy a French Riviera property in 2009, two years before he entered politics.
Babis has dismissed the allegations as political attacks aimed at forcing him out of politics.
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