Populist Babis cruises to Czech election win, will seek support from fringe parties

By Jason Hovet and Jan Lopatka

PRAGUE (Reuters) -Billionaire Andrej Babis's ANO party cruised to victory in the Czech Republic's parliamentary election on Saturday, raising the prospect of a government that would boost Europe's populist, anti-immigration camp and reduce support for Ukraine.

An ebullient Babis told supporters that ANO would seek a one-party cabinet but would talk with two small parties - including the far-right SPD - for support as his party will lack an outright majority.

He again rejected accusations that his win would make the central European nation a less reliable European Union and NATO partner.

WHO WILL BABIS TEAM UP WITH?

"We want to save Europe ... and we are clearly pro-European and pro-NATO," Babis told reporters.

With nearly all results in, ANO was set to replace the current centre-right cabinet led by Prime Minister Petr Fiala. Fiala congratulated Babis and conceded defeat.

ANO promised faster growth, higher wages and pensions, and lower taxes and tax discounts for students and young families during the campaign.

Those pledges - that will cost billions of euros, end austerity and test the country's frugal mindset - resonated with many Czechs who have seen their real incomes plunge in recent years as the country tackled soaring inflation.

Babis, however, must overcome some hurdles to become prime minister, including conflict-of-interest laws as owner of a chemicals and food empire and long-running fraud charges related to drawing an EU subsidy over 15 years ago - charges he denies.

With 99% of voting districts counted, ANO was leading on 34.7% and Spolu in second on 23.2%, the Statistical Office said.

President Petr Pavel, who will appoint the next prime minister, was expected to start talks with party leaders on Sunday.

ANO was seen winning around 80 seats in the 200-seat lower house, results projections showed, and so will need to find wider support.

Babis said he would talk to the Motorists, who oppose the EU's Green policies, and the anti-EU and anti-NATO SPD.

Motorists leader Petr Macinka said he was open to talks with ANO, as did SPD.

'STRONG CZECHIA'

"We went into the election with the aim of ending the government of Petr Fiala and support even for a minority cabinet of ANO is important for us and it would meet the target we had for this election," SPD Deputy Chairman Radim Fiala said on television.

Overall, the fringe pro-Russian parties fared worse than expected in the partial results, with SPD on 7.8% and the far-left Stacilo!, built around the Communist Party, below the 5% threshold to enter parliament.

Babis, who led a centre-left cabinet in 2017-2021, once wanted to join the euro but has since become a eurosceptic and a supporter of U.S. President Donald Trump, handing out "Strong Czechia" baseball caps inspired by Trump's MAGA slogan.

An ally of Hungarian leader Viktor Orban, Babis has teamed up with a number of far-right parties in the Patriots for Europe group in the European Parliament to challenge the mainstream direction of Europe's policies, including decarbonisation.

He has rejected calls from SPD to hold a referendum on leaving the EU and NATO, but has said he would end the "Czech initiative" that has bought millions of artillery rounds from around the world for Ukraine with funding from Western donors.

ANO wants NATO and the EU to handle aid for Ukraine, and has abstained in some European Parliament votes supporting Kyiv and its bid for EU membership, which Babis has opposed in the past.

(Reporting by Jan Lopatka, Radovan Stoklasa, Jason Hovet and Michael Kahn. Writing by Michael Kahn, Editing by Alexandra Hudson, Susan Fenton and Mark Potter)