Euroskeptic Czechs poised to hand power to populist tycoon

(Bloomberg) A Czech billionaire facing criminal charges for fraud is poised to win parliamentary elections this weekend, eclipsing traditional political parties on a pledge to run the state like a business, fight Muslim immigration and defy deeper integration with the European Union (EU).

Andrej Babis, who as the second-richest Czech has drawn comparisons to Donald Trump and Silvio Berlusconi, has a wide lead in opinion polls as two days of voting start Friday.

With a chemical, food and media empire employing 34,000 in 18 countries, the Slovak-born businessman solidified his popularity in the more than three years that he served as finance minister before he was fired by his coalition partner, Prime Minister Bohuslav Sobotka.

Taking credit for the EU's lowest unemployment, one of its fastest rates of economic growth and a balanced budget, Babis has portrayed himself as a competent manager struggling against traditional parties he brands as inept and corrupt.

While that has lifted his ANO party, his attacks against Muslim immigration and criticism of the EU have helped fuel the rise of anti-establishment political forces similar to Germany's AfD and Austria's Freedom Party. AfD and Austria's Freedom Party.

It has also raised concern he may follow the governments of Poland and Hungary, which have clashed with Brussels over democratic values.

"He's presenting himself as the only one who can bring order," said Josef Mlejnek, a political scientist at Charles University in Prague.

"Some voters are convinced he'll be a good manager. People also believe that, because he's a billionaire, he has enough and doesn't have to steal."

Voting in the country of 10.6 million people starts at 2 pm on Friday.

Balloting stations close at 10 pm and reopen on Saturday through 2 pm.

Fraud allegations

Sobotka dismissed Babis in May in a conflict over his past business dealings.

Sobotka's Social Democrats later teamed up with the opposition to strip Babis of his parliamentary immunity from prosecution to allow investigation into fraud allegations.

Police have since charged Babis in the case of a 50-million-koruna ($2.3 million) EU subsidy transferred to his Stork Nest recreation complex.

Babis denies wrongdoing and says the allegations are an attempt to sideline him from politics.

Despite the allegations, he has held on to support siphoned from both the Social Democrats and other traditional parties.

He has boasted of streamlining government operations and, via a law requiring retailers to link their cash registers to the Finance Ministry, boosting budget revenue and cracking down on tax evasion.

At the same time, he has railed against EU "meddling", a stance that resonates with voters in the bloc's most euroskeptic member.

"I like order, and Babis put order into state finances," Mirka Votrubova, a pensioner, said as she browsed shops in a mall in Prague.

"It's too bad they didn't let him finish his term at the Finance Ministry."

The billionaire has also boasted about reducing state debt and selling state bonds with negative yields during his stint at the ministry, which coincided with a period of unprecedented monetary stimulus.

The yield on the 10-year government bond was at 1.57% on Friday, more than tripling since the start of the year after the central bank began raising interest rates.

Anti-establishment rise

Regardless of the government's economic achievements, polls have shown the emergence of protest parties including the anti-immigrant Freedom and Direct Democracy, known as SPD, and the Pirate Party.

Alongside the Communists – the descendants of the Moscow-backed regime that ruled before the 1989 collapse of the Iron Curtain – the three could take more than one-quarter of parliament's seats.

Babis, like the rest of the Czech traditional political establishment, has rejected ruling with SPD and the Communists.

But with opinion polls showing that as many as eight parties may enter parliament, his efforts to create a coalition may be fraught with difficulty.

"It will be a very fragmented parliament, and it will make coalition talks difficult," said Jakub Charvat, a political analyst at the Metropolitan University in Prague.

"There is also a great deal of personal animosity among politicians, which may complicate things further."