January 9, 2018 / 11:05 PM / in 10 months

Czech lawmakers postpone confidence vote for PM Babis's minority government

PRAGUE (Reuters) - The Czech lower house on Wednesday postponed a confidence vote on Prime Minister Andrej Babis’s minority government until Jan. 16 or later as lawmakers tussled over fraud allegations the billionaire politician is battling.

Czech Prime Minister Andrej Babis attends a parliamentary session during a confidence vote for the newly appointed government he leads, in Prague, Czech Republic January 10, 2018. REUTERS/David W Cerny

Babis’s ANO party won an October election by a wide margin but has only 78 seats in parliament’s 200-member lower house, and has so far been unable to find coalition partners due to a police probe into whether Babis illegally tapped European Union subsidies as a businessman a decade ago. He denies wrongdoing.

The unexpected delay in the confidence vote, which opposition parties sought after 10 hours of debate, puts pressure on a parliamentary committee to make a recommendation whether to lift Babis’s parliamentary immunity from prosecution before the chamber votes on confidence.

Babis stands little chance of winning backing for his minority cabinet. If he loses, his cabinet will stay in office until a new one is formed. President Milos Zeman has promised to allow Babis a second attempt to form a government.

Drawn-out coalition negotiations are becoming more common in European countries, including Germany, as parliaments are increasingly fragmented by the rise of populist, anti-establishment parties.

Most parties in the Czech lower house say the government should not be led by a person facing investigation. Some have wider objections to conflicts of interests Babis has as the founder of a $4 billion business empire and a top politician.

The subsidy case also involves ANO deputy Jaroslav Faltynek, who denies wrongdoing.

“It is logical to first vote on the lifting of immunity of deputies Babis and Faltynek and then return to the vote on confidence,” Zbynek Stanjura, deputy head of the biggest opposition party, the Civic Democrats, told reporters.

The opposition Pirate Party said forcing a committee and, ideally, full-house vote on immunity prior to the confidence vote would eliminate possible horse-trading on the issue in further coalition talks when the next government is being formed.

BABIS STILL POPULAR

Babis remains popular due to pledges to weed out political corruption and run government with a businessman’s touch. His agenda includes boosting infrastructure investment, reforming pensions and digitalizing the state to make it more efficient.

Babis has been charged in the subsidy case and police have requested the lifting of his immunity. He says the allegations against him have been fabricated by political and business opponents.

ANO’s convincing election victory - giving it three times as many seats as its nearest rival - means any viable government will almost certainly involve the party, with or without Babis.

Other parties also want to avoid early elections due to ANO’s popularity.

The tussle has not so far troubled investors, long used to shaky coalitions. The economy is growing quickly and unemployment is the lowest in the EU. The state has a public sector budget surplus and bond yields are the lowest in central Europe. The crown was steady on Wednesday at 25.56 to the euro.

Slideshow (6 Images)

Babis is the country’s second richest person through the Agrofert conglomerate, the country’s biggest private employer, with interests in food, farming, chemicals and media. He has put his holdings in a trust fund to meet conflict-of-interest laws.

He is alleged to have concealed the ownership of a farm and conference center to get a 2 million-euro subsidy earmarked for small businesses when he ran Agrofert.

An investigation by the EU anti-fraud office OLAF has found “irregularities” in the subsidy, the finance ministry said in a statement last week.

Reporting by Petra Vodstrcilova and Jason Hovet with additional reporting by Robert Muller; Editing by Jan Lopatka and Peter Graff

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