Billionaire’s Party Extends Sway in Czech Municipal Vote

The party of billionaire Finance Minister Andrej Babis strengthened its sway over Czech politics after winning municipal elections in most of the country’s large cities.

Babis’s ANO party won ballots in nine of 13 regional capitals, according to Czech Statistics Office, three years after entering politics with a goal to displace traditional leaders he deemed inept. ANO won 22 percent of the vote in Prague to beat the opposition TOP09 party, and is negotiating with potential partners to secure the mayor’s post for its candidate, Adriana Krnacova.

The Oct. 10-11 vote, which took place almost a year after parliamentary elections resulted in a three-way coalition government lead by the Social Democrats, follows ANO’s victory in European Parliament elections in May. Babis, the second-richest Czech, pledged to uproot corruption and improve state administration in the campaign before the municipal ballot.

“It’s becoming clear that support for ANO is of long-term nature rather than short-term,” Jan Outly, a political scientist at the Metropolitan University in Prague, said by phone yesterday.

Prime Minister Bohuslav Sobotka’s Social Democrats lost about 18 percent of seats within municipalities nationwide. A separate vote decided that the party will have the most candidates in a runoff ballot this week to elect a third of the country’s senators.

Most Popular

Babis has ranked as the most popular Czech politician since January, according to pollster Stem. ANO widened its lead to 30 percent, ahead of 21.3 percent for Social Democrats in a September election model calculated by Stem.

The Social Democrats will have 19 candidates to compete for 27 posts in the country’s upper house of parliament in the second round, compared with nine ANO representatives, eight Christian Democrats and 18 other candidates from the remaining parties, according to first-round results.

The Senate, which has 81 members, can reject a bill approved by the lower house of parliament. Still, the lower house can override the veto with an absolute majority in a repeated vote.

While Sobotka and Babis have repeatedly clashed over budget priorities and tax policies, the prime minister said he saw the result as a “cementing element” for the government’s future. Babis said the municipal elections were “an immense success” for his party.

Fiscal Stimulus

Sobotka’s cabinet is preparing a fiscal stimulus plan after years of austerity, which helped to cut borrowing costs while exacerbating the longest recession on record.

Yields on the Czech 10-year government bonds dropped to a record low of 1.08 percent today as the central banks keeps the benchmark interest rate at what it call the “technical zero of 0.05% and the Finance Ministry cuts debt sales.

Rising budget revenue and forecasts of continued economic expansion next year have helped Babis fend off pressure from the Social Democrats to raise corporate taxes to finance increased welfare spending and transportation infrastructure projects.

‘‘The growth itself, in some way, is solving a lot of problems that could otherwise create friction between them, including on how to go forward with fiscal policy,’’ Tsveta Petrova, an analyst at New York- based Eurasia Group, said by phone yesterday. ‘‘Babis doesn’t want to undermine the coalition right now, but it may get there if things turn for the worse, and especially when the Social Democrats and ANO would have to at some point negotiate over taxes.’’

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