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Enter Babiš


The populist billionaire Andrej Babiš won a decisive victory in the Czech election. Comparisons to Hungary and Poland are misleading, however. Things are more complicated and volatile in Prague.

© REUTERS/David W Cerny

Czech politics have been careening from one drama to another. Andrej Babiš may have emerged victorious after October’s national election, but he is facing an uphill battle to form a stable government. The country’s mainstream parties suffered a big blow, thanks to a large protest vote, and parliament is severely fragmented. The Czech Republic is now facing months of political wrangling that will likely extend into early 2018.

Babiš’s ANO, or Yes, party has won 78 out of 200 seats in the lower house of the parliament with eight small parties sharing the remaining 122 seats. Forming a majority government without the ANO is practically impossible; forming a new government with Babiš is going to be nearly as difficult. None of the other democratic parties appears willing to play the role of junior coalition partner. They also point to an ongoing criminal nvestigation into Babiš on allegations of fraud. The former finance minister denies any wrongdoing and calls the investigation politically motivated. Still, his image has been tarnished.

Ever the shrewd businessman, Babiš will not back down. The only parties willing to entertain Babiš are the far-right extremists and Communists – and he has rejected working with either. Nor will he allow somebody else from ANO to lead the new cabinet. This would run counter to his style as well as his agenda. Instead, he is going to form a minority government, pepper it with some well-known technocrats, draw up a broad, sweeping program, and then try to muster enough votes for a confidence vote in parliament. Expect a lot of back room, eleventh-hour deals.

So when the new parliament opens on November 20 and the outgoing government of Prime Minister Bohuslav Sobotka tenders its resignation, Babiš will be set to take power. To this end, he has made a deal with President Milos Zeman who, in spite of poor health, wants to run for re-election in January 2018. To win, he needs ANO’s voters, so he wants to ensure that the largest party will not come up with its own presidential candidate. President Zeman has already assured the ANO leader that if Babiš cannot win a vote of confidence in the first attempt, he will be nominated for a second attempt.

Who is the Real Babiš?

The Czech Republic’s new strongman is a bundle of contradictions. He presents himself as an anti-establishment leader and an anti-corruption crusader leading the charge against traditional, mainstream parties. He has promised the public he will govern more effectively, or, as his slogan puts it: “run the country like a family business.” Yet he has profited significantly from being part of the establishment during the transition period since the 1990s. Babiš is the second-richest businessman in the country and a media mogul. Moreover, ANO has served as the junior coalition partner in the government of outgoing Prime Minister Sobotka’s. Babiš himself had a decent run for more than three years as finance minister – until he was dismissed this summer over the fraud investigation into EU subsidies for his company.

It is also important to note that Babiš’ business conglomerate stretches across the food, chemical, and media sectors, employing 33,000 people in 250 companies; his Agrofert Holding company spans several EU countries, including Slovakia, Hungary, Germany, and Poland. Even if he were to put his business holding into a blind trust and claims not to have any control over it anymore, Babiš faces many conflicts of interest that will likely constrain him along the way.

Bloomberg or Berlusconi

Babiš’ victory has raised concerns in Brussels; some fear the Czech Republic could now drift in an illiberal, anti-EU direction. Babiš, however, has indicated he is far more interested in domestic policy, and that there will be more continuity in EU affairs than change.

“My name is Andrej Babiš. Perhaps you have heard about me,” he wrote in a letter to EU ambassadors in Prague a few days before the October elections, which was leaked to the media in early November. In the letter, Babiš rejected the description as a “Czech Trump” and similar comparisms. He wanted to be judged by results, he wrote: “So-called traditional political parties say that I am a threat to democracy, since I want to limit parliamentary debates, but I just want to retain German [Bundestag] standards and have rules in these debates’. The letter closes on a personal note: ‘I came to politics to bring transparency. I have not joined politics to enrich myself since I am already rich enough. I came to fight against corruption and waste, clientelism and bring [more] efficiency into governance.”

Babiš points to Michael Bloomberg, the former mayor of New York and successful businessman, as his role model. Perhaps a more appropriate comparison would be Silvio Berlusconi. With Babiš, too, the biggest concern is that his huge concentration of power – and the existence of skeletons in the closet – will cause tensions with the country’s judiciary. This could possibly lead to even more opportunities to exercize political control.

Opportunist, Not Ideologue

However, unlike Orbán in Hungary and Jarosław Kaczynski in Poland, the 63-year-old Babiš is not an ideologue, but a pragmatic businessman. A native Slovak, he cannot be a Czech nationalist; he still speaks a strange and sometimes funny mixture of the two languages. His stakes are indeed in domestic politics, and his interests lie in regulatory policies that may affect his giant business empire. That may also explain why his anti-corruption message lacks depth.

Babiš is eclectic in his rhetoric and actions. He has no strong institutional, cultural, or social connection with his constituency or broader Czech society, and will need to rely on his media and marketing machine to maintain his glossy image and popular support.

His European policy is bound to be pragmatic, non-ideological, and very transactional. There are, of course, there are strong euroskeptic sentiments in the Czech Republic which will limit Babiš’ room to maneuver, but that is nothing new. The previous Social Democrat government was also cautious when talking about Europe. Babiš will probably not improve his country’s EU policy with clear ambitions and strategic consensus, but there are no signs that Prague’s outlook on Europe would significantly worsen.

The ANO’s foreign policy program is underdeveloped, and Babiš has little interest in pursuing it proactively. His instinct is to maintain the status quo rather than deepen EU integration further, and his approach to the current debate on the EU’s future is likely to be rather opportunistic.

Defense and the Euro

However, there is ample room to engage Babiš on EU affairs. He will definitely need good advice and guidance, which is exactly why EU politician Guy Verhofstadt visited Prague in November. The two need each other: Babiš wants a better image in Brussels, and Verhofstadt, as leader of the Alliance of Liberals and Democrats, would like to have another EU leader from his political family. What’s more, Babiš will instinctively try to stay close to Germany and look for new allies in central Europe, like Austria’s Sebastian Kurz.

This could play to the EU’s advantage. It should be possible to convince Prague to get on board and endorse some pragmatic changes. The obvious case is defense and security policy, where it has the support of the public. In fact, all the major parties support Czech participation in the Permanent Structured Cooperation (PESCO), a framework for defense cooperation. But public support can cut both ways: Babiš is also likely to pursue a tough line on migration, refusing any relocation of refugees in the Czech Republic.

Those who advise Babiš on EU affairs within his own party – such as MEP Dita Charanzová – are proponents of the Czech Republic adopting the euro in the longer run. In the short term, it will be interesting to see whether the new Czech government can be convinced to formally enter the euro “antechamber” – the European Exchange Rate Mechanism which limits the floating band of national currencies to the standard fluctuation of plus or minus 15 percent.

An Illiberal Club of Two

On the regional level, the new government is not likely to be very active within the Visegrad Group. Unlike Poland or Hungary, a Babiš-led Czech Republic has no stake in escalating conflicts with EU institutions. The constructive Czech-Slovak tandem within the Visegrad Four is likely to remain in place. As a Eurozone member, Slovakia will gravitate even more toward the EU core, while Babiš will navigate his own path.

So does that mean that Berlin and Paris need not worry? The good news is that the illiberal club of central Europe is still limited only to two members. Yet there is bad news, too: there are concerns that under Andrej Babiš , the Czech Republic will remain a weak and somewhat unreliable partner, mostly absent from the common endeavor to shape EU’s future and overcome East-West tensions.