June 15, 2018 / 2:05 AM / 3 months ago

Czech centre-left party approves joining coalition, new government close

PRAGUE (Reuters) - Members of the Czech centre-left Social Democrat party have voted to join a coalition with the dominant centrist ANO group, a major step towards ending more than eight months of stalemate after an inconclusive election.

Newly appointed Czech Prime Minister Andrej Babis speaks to media at Prague Castle in Prague, Czech Republic, June 6, 2018. REUTERS/David W Cerny

Social Democrat (CSSD) chief Jan Hamacek said on Friday that nearly 60 percent of those who voted in a party referendum backed the plan. Dissenters did not want to join a government led by ANO chief Andrej Babis, who is facing a fraud investigation.

“I see the mandate as very strong... We have to focus on contributing together to creating a stable government and to push our priorities in the government,” Hamacek told reporters.

Babis, who is being investigated by police looking into the alleged abuse of a 2 million euro EU subsidy a decade ago, has struggled to find anyone to team up with him in power since his party won nearly 30 percent of the vote last October.

He has denied any wrongdoing and dismissed the inquiry as a plot against him.

The two parties already served together in a three-party coalition in 2014-2017, led by the Social Democrats who were then the biggest party but suffered big losses to ANO in the 2017 election.

Babis welcomed the outcome of the vote, adding he would submit his proposed new cabinet to the president on Sunday.

An ANO-CSSD government would have 93 votes in the 200-seat lower house and would have to rely on support from the anti-NATO, pro-Russian Communist party to survive the confidence vote that always takes place after a cabinet is appointed. Babis said the vote could take place on July 11.

COMMUNIST SUPPORT

The Communists have indicated they would vote for the cabinet, although Babis has refused to bow to some of their policy demands such as scaling back Czech participation in NATO foreign military missions.

Babis has pledged to keep the country on a firmly pro-Western course despite the pending deal with the Communists, who have had no role in national government since their totalitarian rule ended in 1989.

On Friday, the Communist leadership approved a list of conditions for the party’s support for the cabinet, including protection of natural resources and increases in the minimum wage and pensions. It will make a final decision on whether to back the government by the end of June.

Babis has already promised to raise public sector wages and boost infrastructure investments while cutting taxes. The Czech Republic ran public finance surpluses in the past two years, allowing looser fiscal policy.

The Communists will have an ally in pro-Russian President Milos Zeman in pushing the government’s direction in areas such as energy, where the next cabinet is due to decide on enlarging two existing nuclear power plants. The deal, worth billions of dollars, would be the Czech Republic’s biggest investment and Russia is a leading contender for participation in the project.

Babis has served as prime minister in a caretaker capacity since his first, one-party cabinet lost a confidence vote in January.

Reporting by Jan Lopatka and Robert Muller; Editing by Gareth Jones

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