Just days before the national election, the name of the Czech prime minister, Lady Babi, appeared in Pandora’s papers, a massive leak of documents exposing the secret financial transactions of several world leaders, among others. Papers reportedly show that Babi bought a £13 million mansion in France through secret loans through offshore companies before entering politics.
But this new scandal is unlikely to break Babik’s hold on power. It is not yet clear whether the prime minister did anything illegal. And his involvement in several other scams has not eroded his support base. The major question remaining is not whether these allegations will hurt his career, but whether their repercussions will further the Czech Republic’s drift toward liberalism such as Hungary and Poland.
An informer of the Political Police (STB) under Communism, Babiš is now the fifth richest Czech, worth an estimated US$3.5 billion (£2.6 billion). Through a trust fund, he owns Agrofert, a large group of 300 companies known to be the main Czech beneficiaries of European Union (EU) agricultural subsidies. This represents a major conflict of interest as Babi and his ministers participate in decision-making on the European budget and the rules through which subsidies are allocated. In response, the European Commission has suspended certain payments due to Czech companies until the conflict of interest is resolved.
At home, Babi faces charges that he received a €2 million EU subsidy to build a resort in the so-called Stork’s Nest case, fraudulent use of advertising for tax evasion, and his own son in Crimea. involvement in kidnapping. He has denied any wrongdoing in these cases.
Furthermore, as Babi’s party ANO and the ruling coalition of the Social Democrats (ČSSD) mismanaged the pandemic, the Czech Republic has one of the worst COVID-related deaths in the world.
While either of these cases would have ended the career of a one-time Czech prime minister, Babi can count on the unconditional support of his Berlusconi-style party, which is built around his personal brand and largely made up of their employees. And, helpfully, Babi’s group controls about a third of Czech private media.
What’s more, the government’s extravagant spending, which is contributing to the second-fastest loan growth rate in the EU, has made the ANO a favorite among pensioners, the country’s most trusted voters.
The 8–9 October election is arguably the most important legislative contest since the independence of the Czech Republic in 1993. Never before has there been an incumbent with as much impetus to win as Babiq, and no one has the power to change that for as long. Democratic and pro-Western trajectory of the Czech political system.
It was notable that Babi had invited the Prime Minister of Hungary, Viktor Orbán, on the way to the Czech campaign. Following in the conservative footsteps of the ruling parties of Hungary and Poland may attract Babi in light of the emerging conflict with European institutions.
As things stand, he is certainly in for an almost unresolved standoff with the EU. His options appear to be to get rid of Agrofurt, which looks highly improbable, or to resign and hand over the premiership to someone trusted in his party – potentially running for president in the next presidential election, scheduled for January 2023. to try It is, however, a risky strategy. Babiš cannot win, the credible person may prove to be less credible than expected and, meanwhile, Babi will be more vulnerable to police investigations.
Thus Babi may consider a more radical scenario: removing the country from its EU membership. Domestically, such a move would please current President Milos Zeman and several political parties that are calling for a “Chexit”. Abroad, Babi may work closely with Poland’s Orban and Jarosaw Kaczyski, whose autocratic ambitions are also constrained by pressure from European institutions.
In addition, the Czech Republic’s economic growth means that the country will gradually benefit less from the EU budget, becoming a net contributor by 2030. This would slowly turn one of the most popular arguments for membership into a reason for abandonment.
Assuredly, there will be many obstacles to liberal development, including the Czech Senate. The upper house is controlled by the opposition, without whose support any constitutional reform is impossible. The extreme scenario of leaving the EU is also made more difficult by the horrific precedent set by Britain’s messy departure. But it may still be the only way for Babik to stay in power, avoid going to jail, and keep his business running.
Several variables are unknown, not to mention his unpredictable behavior, including the possibility of a party bargain after the election and Zeman’s fragile health. The importance of this election cannot be underestimated. It may well decide whether the Czech Republic will maintain reasonable democratic standards or move towards a liberal future – one that could be outside the European Union.