Czech election favorite Babis hard on Brussels, light on ideology

PRAGUE - 13 October 2017: Czech voters look set to hand leadership in next week's election to tough-talking billionaire Andrej Babis, a populist ready to take on Brussels but without the burden of ideology that has dragged Poland and Hungary into deep rifts with the European Union.

Drawing comparisons with U.S. President Donald Trump for his anti-establishment message and former Italian leader Silvio Berlusconi for his media ownership, Babis is known for an aggressive negotiating style and a skeptical view on EU integration.

A loyal foreign trade official under communism, the 63-year-old Babis has since forged a business empire that includes food and chemical companies, the country's biggest broadsheet newspaper and the biggest private radio station.

He has distanced himself from right-wing conservatives such as Poland's Jaroslaw Kaczynski and Hungary's Viktor Orban by navigating a path lacking in hardened political views along the lines of Orban's vision of "illiberal state".

A business-friendly program and pledges to run the state efficiently and oust graft-tainted political operators has put his ANO party far ahead of its rivals in the run-up to the Oct. 20-21 election.

Babis is also unlikely to pursue the kind of socially conservative agenda successful in Poland, with Czechs being the most atheist nation in the EU. Instead he may seek to emulate neighboring Slovakia's three-time Prime Minister Robert Fico, a Social Democrat who has adjusted his policies depending on the national mood.

"He would be very similar to Fico in the manner he would formulate his policies, but given the higher skepticism towards the EU among the Czech public, the resulting position would be more critical," said Tomas Weiss, head of European studies in the Social Sciences Faculty at Charles University.

"A Prime Minister Babis would stand somewhere between Fico and Orban."

Like other political analysts, Weiss sees Babis as a populist following the electorate with no clear policy on the EU, which he has called a "great project" beset by deep problems such as the refugee crisis and Brexit.

While ANO is a member of the liberal pro-integration ALDE group in the European Parliament and the party's programme supports building relations with France and Germany, Babis himself rejects further integration and has harshly criticized Germany's refugee policy.

"I refuse to give more national powers to Brussels like I reject the euro and a common migration policy," he wrote in a blog post this month.

The Czechs, like Hungary and Slovakia, oppose any quota mechanism for redistributing the migrants who have flowed into Europe since 2015.

"While Babis lacks Orban and Kaczynski’s nationalist impulses, he will create headaches for core Europe and Brussels in more subtle ways," said Eurasia analyst James Sawyer. "He will continue to oppose Brussels' refugee policy to the end."

Babis has shown no intention of reforming the country's judiciary along the lines of Poland, even though he himself is in conflict with the authorities due to charges he faces of alleged fraud.

The case relates to an EU subsidy for building a conference and leisure center outside Prague.

Authorities have also been looking into strategies Babis used to buy tax-free bonds from his company several years ago. No charges have been brought in that case and he denies any wrongdoing in both cases.

DIG IN OR FLIP-FLOP

As finance minister in the outgoing government until May, Babis played tough with the EU to win an exception to value-added tax collection that he said would prevent tax fraud in fuel trade. Under his stewardship, the Czechs have blocked other proposals including a French-backed plan for lower taxes on electronic books.

"Babis can be very pragmatic when he wants to, but also stubborn when he doesn't… willing to take the room as a prisoner, and we've seen that in Ecofin," said one European government source.

On many policies though, he has flip-flopped. In 2015, he said refugees could fill the country's job vacancies, but he now says the Czechs should not take in a single migrant. He has also moved from being neutral on the euro to opposing its adoption, in line with the views of voters.

Because he will need coalition partners to govern, Babis will be unable to push through on his own any radical policy or legal changes the way Orban or Kaczynski have been able to.

A coalition with the parties ANO has previously ruled with - the Social and Christian Democrats - would be unlikely to lead to any major international policy shifts, while partnering with the center-right Civic Democrats would bring a more Eurosceptic tone.

Perhaps the bleakest scenario for the EU and markets would be any Czech government propped up by the Communists and far-right SPD party.

This seems unlikely, but coalition building may be tough for Babis as other parties have objected to being in a cabinet with him due to the police charges he faces. He has said, however, that the charges do not disqualify him from becoming prime minister.