By Jan Lopatka and Jason Hovet
PRAGUE (Reuters) -Populist Czech billionaire Andrej Babis’ ANO party signed a coalition deal with fringe right-wing allies on Monday, moving closer to regaining power after winning a vote on promises of hiking spending and opposing EU climate and migration policies.
Babis’ return to power with the fringe allies will strengthen the populist, anti-immigration and national sovereignty camp within the European Union that could weaken backing for Ukraine’s defence against Russia’s invasion.
Babis, 71, served as prime minister from 2017-2021. He is joining forces with the Motorists party, which is sceptical about climate change, and the SPD party, which is against the EU and NATO. He has said he wants to form a government by mid-December.
A TURN AWAY FROM AIDING UKRAINE
An ANO-led cabinet, if appointed, will replace a centre-right government that focused on reducing budget deficits and backing Ukraine.
Babis has pledged to end any aid for Ukraine from the Czech budget. He also pledged before the election a month ago to end a Czech-led and foreign-funded programme supplying ammunition to Kyiv, though he has been more ambivalent after President Petr Pavel urged parties to keep the programme.
The coalition’s draft policy agenda does not commit to any specific spending target, unlike the outgoing government which aimed to lift military spending gradually toward a new NATO target of 3.5% of GDP, plus 1.5% spent on infrastructure improvements.
EU CLASHES COMING
Babis is taking a more combative approach to the EU, promising to reject the bloc’s planned carbon emissions allowance scheme for households, which could set up a legal clash with the EU.
The coalition’s draft agenda says the EU’s Green Deal decarbonisation plan was “unsustainable” and the 2035 target of ending sales of petrol engines “unacceptable”.
Babis reiterated on Monday there would be no questioning of EU and NATO membership, as such.
“Our orientation is clear, but we will not be there just for show… at the European Council, also in NATO, we will be fighting for our interests,” Babis told reporters.
Babis wants an EU run by member states more than the European Commission. During Babis’ previous term, the commission ruled that he had a conflict of interest due to his ownership of a large farming and chemicals business empire.
He is an ally of Hungarian Prime Minister Viktor Orban, and a fan of the Visegrad Group which includes Hungary, Slovakia and Poland. The group remains sharply divided on Russia’s aggression against Ukraine, where Poland stands opposed to comparatively pro-Russian Hungary and Slovakia.
DEFICITS LIKELY TO RISE
During its term, the outgoing government has cut the budget deficit to 2% of gross domestic product, from 5%.
Analysts have put the costs of Babis’ plans to cut taxes for companies, lift public sector wages, cap the retirement age and subsidise energy prices at billions of euros, with no clear way of financing them.
The three parties have agreed to keep deficits under the EU cap of 3% of GDP. The coalition is also pledging to take no steps towards adoption of the euro, and proposes to enshrine the crown currency in the constitution, although the country has committed to adopt the euro at some point.
(Reporting by Jan Lopatka and Jason Hovet; Editing by Andrew Heavens and Peter Graff)
