Czech election winner Babis meets anti-EU party in hunt for viable government

The leader of ANO party Andrej Babis leaves the Lany chateau after meeting with President Milos Zeman following the country's parliamentary elections in the village of Lany near Prague, Czech Republic October 23, 2017. REUTERS/David W Cerny

PRAGUE (Reuters) - Czech billionaire Andrej Babis’s ANO party met an anti-European Union, anti-immigration group on Thursday in search of a coalition partner as it struggles to convert a huge election win into a majority government.

ANO won three times the votes of its nearest rival in last weekend’s election that saw a popular swing from mainstream traditional parties towards outsiders, echoing a recent shift in Europe in favor of anti-establishment groups.

But with Babis facing potential fraud charges, which he denies, most parties have ruled out any tie-up with ANO although it won over many voters with pledges to run the state like a business and weed out political corruption.

The post-election limbo raises the risk that the 2018 state budget might not be approved within the deadline of year-end and kept open the possibility that ANO could opt for minority rule supported by far-left and far-right factions.

On Thursday, ANO met the Freedom and Direct Democracy (SPD) party, which won 22 seats to ANO’s 78. ANO has so far ruled out a block with the SPD but the two have found common ground on curbing immigration, a referendum law and welfare reform.

ANO deputy chief Jaroslav Faltynek declined to say whether it would seek SPD support in a coalition or for a minority government. “We have not spoken with the SPD about a government today. We issued a clear stance, even before the election, that we would not form a government either with SPD or KSCM (Communists),” he told reporters.

Police are looking into whether Babis hid ownership of a convention centre that received a 2 million-euro EU subsidy in 2008 though it was intended for small businesses. He says the investigation was part of efforts to push him from politics.

Babis has called single-party government unrealistic and says he aims to have a coalition by Christmas. He has been talking to the Social Democrats and Christian Democrats, ANO’s partners in the outgoing government, the SPD, Communists, conservative Civic Democrats and the liberal Pirates.

Turning to the SPD could raise eyebrows in Brussels as the party has demanded a referendum on membership in the EU, a risky move in the eurosceptic-leaning country of 10.6 million people.

Reporting by Robert Muller; Editing by Jason Hovet