(Bloomberg) -- Billionaire Andrej Babis took aim at the austerity agenda of the Czech government and promised to ratchet up public spending if he returns to power next year.
“We must invest our way out of the crisis,” Babis, the Czech Republic’s prime minister for four years until 2021, said in an interview. “We must invest, invest, invest — and it will pay off a few years later.”
Polls show that Babis, who has consistently attacked the political establishment and is an ally of Hungarian Prime Minister Viktor Orban, is well placed to have another shot at premiership in next year’s election. In the interview at his party headquarters in Prague, he also said he would seek to buy out shareholders of state-controlled utility CEZ AS and stick to his stance on not adopting the euro.
But the Czech magnate’s main focus was slamming his successor, Prime Minister Petr Fiala, for undercutting economic growth through spending curbs, tax increases and what he says is a failure to collect enough taxes.
Should he take power again, Babis said he would cut administrative costs, scale back subsidies for electric vehicles and some non-governmental organizations, bolster the tax system and fight tax evasion.
The billionaire opposition leader expressed confidence that those moves could raise tens of billions of koruna for investments in roads and hospitals, as well as faster pension growth, without increasing taxes or the deficit.
Babis has demonstrated a resilient popularity among many Czechs, who have embraced his straight talk — often verbal attacks — and anti-immigration stance. But he’s also come under fire for accusations of conflicts of interest as a business owner who receives public subsides.
Back From Isolation
Although his ANO party won the most seats in parliament in the 2021 election, Fiala’s allies formed a coalition majority to keep out Babis, who had piled up debt during the pandemic. Last year, he lost a bid for the presidency to Petr Pavel.
But disapproval of Fiala’s government, which has made debt reduction a centerpiece of its program, has helped buoy Babis’s fortunes. The billionaire said his aim is to win more than 40% of the vote next year to maximize his party’s leverage in a coalition with as few partners as possible.
Babis also signaled other course changes. In a bid to seize full control of CEZ AS, the dominant power utility 70% owned by the state, he said he would use dividends to buy out profit-seeking minority shareholders — citing a similar move by the French government over Electricite de France SA.
The minority owners “only care about profit and not about the people,” said Babis, adding that the state would mandate lower power prices and be more nimble about investing in new reactors.
CEZ shares jumped as much as 4.8%, the most in eight months, after Babis’s comments were published on Wednesday as investors speculated on earning a premium during a buyout. The stock later trimmed the rally, trading up 2.5%, valuing the utility at an equivalent of almost $21 billion.
The 70-year-old agriculture, food-processing and chemicals tycoon, once a supporter of the euro, said he wouldn’t move forward on the adoption of the currency, which remains unpopular in the Czech Republic. Although the euro is a boon to companies, the koruna helps the Czech central bank shield the economy from external shocks.
“It’s a double-edged sword,” Babis said. “So in the ANO manifesto, we say we don’t want the euro.”
And while he acknowledged the Czech National Bank’s independence, he also hit out at the central bank for keeping borrowing costs excessively high.
“If we have all agreed that we don’t want to adopt the euro, the central bank should keep koruna interest rates at the same level as in the euro zone,” he said.
Friends on the Right
Babis, whose current wealth is estimated at $2.9 billion by the Bloomberg Billionaires Index, said the European Union would be getting a “tough, hard-charging negotiator” in Brussels if he returned to power. In addition to his closeness with Orban, he also has channels to Italy and Slovakia — two governments who have also embraced Europe’s hard-right shift.
Although Babis said he and the Hungarian premier don’t agree on many policy areas, they share a criticism of the EU’s immigration policy, an opposition to what he called “political” NGOs and a criticism of the inner workings of Brussels.
“Orban and others were fighting for their national interests,” he said. “I was doing the same, and you need allies to be able to do things that I wanted.”
On Monday, authorities in neighboring Slovakia, agreed to settle a court case in which the billionaire sought damages for being listed as a communist-era secret police agent. He said that move marked the end of 12 years of litigation and was proof that he hadn’t collaborated with the service in then-Czechoslovakia.
(Updates with stock-market reaction in 13th paragraph.)
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