Image copyright Reuters Image caption Mr Sobotka (R) has a turbulent relationship with Mr Babis (L)

Czech Prime Minister Bohuslav Sobotka has announced that he will submit his government's resignation later this week because of a disagreement with Finance Minister Andrej Babis.

Mr Sobotka is unhappy about alleged unexplained business dealings of Mr Babis, a billionaire businessman.

The announcement comes less than six months before parliamentary elections.

Mr Sobotka has said he will meet the president in the coming days to formally submit the resignations.

The BBC's Rob Cameron in Prague says that Czechs have have had more than three years of more or less stable coalition government under Mr Sobotka, a mild-mannered social democrat.

But that stability has now come to an end because of the bitter rivalry between him and Mr Babis.

Their dispute came to a head over claims Mr Babis had avoided paying taxes on bonds issued by his own company.

Mr Sobotka argues that it is unacceptable for Mr Babis to remain as finance minister.

Mr Babis's centrist ANO party is far ahead of Mr Sobotka's centre-left CSSD in the opinion polls, our correspondent says, and this act of brinksmanship will be seen very much as pre-election manoeuvring.</s>In this Feb. 22, 2017 file photo Czech Republic's Prime Minister Bohuslav Sobotka addresses the media after an extraordinary meeting of the chairmen of parliamentary parties in Prague, Czech Republic. Sobotka said Tuesday, May 2, 2017 his government will resign over unexplained business dealings of his Finance Minister and rival Andrej Babis.

Start the conversation, or Read more at Houston Chronicle.</s>PRAGUE (AP) — The Czech prime minister says that his government will resign over unexplained business dealings of the country's finance minister and rival.

Premier Bohuslav Sobotka says that he will meet President Milos Zeman this week to formally submit the government's resignation.

Tuesday's move reflects tensions in the ruling coalition about six months before the parliamentary election.

Sobotka says that there are suspicions that Finance Minister Andrej Babis avoided paying taxes in the past that he didn't explain properly.

Babis, the country's second-richest businessman, heads a centrist movement that is a favorite to win October's ballot, paving the way for him to become prime minister.</s>More than three years ago, the Czech social democracy won the elections ahead of the populist billionaire Andrej Babiš's "ANO" (="YES", an acronym for "Alliance of the Pissed-off Citizens") – it was almost a tie. A calm, uncharismatic leader of the social democrats, Mr Sobotka, a life-long politician, became the prime minister because the ANO's result was just slightly worse than that of the social democrats. But it has been generally understood that the "de facto prime minister" was the somewhat charismatic, aggressive billionaire Andrej Babiš, the finance minister. 

 

 This wasn't the first time when the finance minister was considered the "de facto prime minister". In the government of center-right plasma physicist Mr Petr Nečas, the finance minister Mr Miroslav Kalousek was the by far louder and more controversial and combative guy. Kalousek is not only Babiš's predecessor as the finance minister – but also the "personification of all evil" that Babiš constantly talks about in his sermons addressed to his brain-dead quasi-religious sect. Babiš and his sheep seem as obsessed with Kalousek as some believers are obsessed with the Devil.

 

 In late 2013, the Christian Democratic Union – the Czechoslovak People's Party (yes, they keep this name) – became a junior coalition partner. They liked to join most governments after the 1989 Velvet Revolution.

 

 OK, when Sobotka joined forces with Babiš, the social democracy wanted to build on what they have in common: the hatred towards the small businesses, populism, licking of the aßes of the losers who are always easier to be manipulated than the people who depend on themselves. But there were lots of differences and time bombs. Babiš sometimes acts as if he were a rightwinger – all owners of "very big corporations" unavoidably do so at some times. More seriously, Babiš is a completely "apolitical" politician who has no values, no ideology, no spine. That's different from the social democrats who try to extend the tradition of a party that has existed for more than a century.

 

 

 

 

 Also, Babiš was a snitch of the communist secret police (I have read so many materials about him from that era that I will carefully avoid all sentences that could suggest any kind of uncertainty – there is no uncertainty here; BTW the Slovak constitutional court is re-evaluting the previous acquitting verdict concerning Babiš's dirty past during communism) – in some counting, a member of the morally šittiest 1% of the population during communism. People like him were crippling human lives throughout communism and we could have executed all of them – they surely deserved it and they still deserve it. Instead, we were excessively generous and allowed filth like Babiš to keep on living. Only a law, the "lustration law", was codified that the members of the communist secret police are not allowed in the government and similar top places. Otherwise they could become billionaires or anything they wanted.

 

 However, even this law became a piece of toilet paper a few years ago. And it just happened that one of these šitty people, Slovak comrade Babiš, evolved into the most influential politician of Czechia. He's expected to score over 30% in the Fall 2017 elections while the social democracy, center-right ODS, and communists are predicted to be slightly above 10% each.

 

 

 

 

 To build his $3 billion wealth in a relatively short time, Babiš has obviously and demonstrably done many things that were deeply immoral. He has screwed his colleagues in the Petrimex communist company (and other companies selling excrements that made Mr Babiš wealthy), he has been sent hundreds of millions of dollars in subsidies (this process became more straightforward in recent years when he was sending the subsidies directly to himself), he has sold himself billions of tiny one-crown bonds of his own company (the algorithm for rounding was explained at some point to imply that tiny one-crown bonds don't have to be taxed at all), he has bought lots of things for the money he shouldn't have had, and so on.

 

 Also, he used the EU subsidies to build his Stork's Nest. The EU funds were meant to be for small businesses and his giga-huge corporation got the funds because he pretended that the company belonged to his daughter's small company. One the funds were approved, he restored himself as the great boss and inventor of Stork's Nest.

 

 I may have missed the most damning acts like that. I am sure that his financial behavior crosses all red lines and the people who genuinely believe that he has the credentials to fight against the immoral financial behavior are absolute idiots. Unfortunately, there are millions of such people in Czechia. By the total volume, Babiš is undoubtedly one of the biggest de facto thieves who have ever lived on our territory. On the other hand, I can't tell you what judges and attorneys would be capable of concluding. Of course his behavior could have been legal according to the technical discussions of lawyers.

 

 At any rate, lots of these scandals were discussed in the media. Details are accessible to everybody. However, his approval rate didn't drop. In fact, it looks like it was going up. Social democratic prime minister Sobotka decided that he had to solve the problem that damages the good name of the government. He asked Babiš to resign. Needless to say, Babiš knows that his resignation would make Sobotka's life (and the police investigators' lives) easier and it's something that Babiš didn't want to do. So Babiš replied that he's a genius who has no reason to resign.

 

 Sobotka announced a press conference for 1:30 pm today. It seemed clear to everybody that he has maneuvered himself into a lose-lose situation. It seemed that Sobotka was stupid to keep on playing this game of criticisms – even though it was empirically shown not to work.

 Babiš's supporters won't be discouraged by anything of the sort.

 

 People including your humble correspondent were working with two possibilities. He either says that he was satisfied with Babiš's explanation how he earned all the billions of dollars and how he dealt with all the clearly non-kosher financial transactions. Babiš's newest "explanation" was based on gems such as "it's a lie that I wasn't very rich before 2000; in fact, I was already picking tennis balls since the age of 9, earning $0.25 an hour". If Sobotka said that Babiš was clean enough, it would make the previous accusations and tension that Sobotka has caused unjustified and he would look like a loser.

 

 On the other hand, if Sobotka fired Babiš, his finance minister – which could have allowed the government to continue to the Fall 2017 elections because the center-right opposition already announced some kind of tolerance for such a modified government – he would turn Babiš into a martyr. Babiš is already whining all the time. He's a spoiled brat from a fucked-up communist apparatchik family who constantly complains that the whole world is against him and everyone else is a thief which is the reason why they're against him.

 

 Needless to say, his being fired as the finance minister would place all this whining on steroids.

 

 Which of these two bad steps Sobotka would choose, all of us were asking? Well, we missed another possibility. Sobotka gave a speech that looked decent to me – given the bad conditions – but he announced his own resignation to be completed later in this week. The prime minister's resignation automatically removes the whole cabinet, of course. This step arguably robs Babiš of his martyrdom because "everyone in the government" has the equally good rights to own the martyrdom. On the other hand, the step is serious enough and consistent with his previous threats.

 

 I am not sure what will happen. Czechia's president – in this case, Mr Miloš Zeman – becomes increasingly powerful and his creative inventions may affect a lot. The parties may agree that the coalition should continue without Babiš. There may be new snap elections although the regular ones are already so close that it would be silly to change their date (the date actually became "official" today, independently of the resignation). A technocratic government or some temporary different coalition could complete the term.

 

 If Sobotka manages to strip Babiš of his chair of the finance minister in this indirect way, it will be a big victory for him, I think. Also, I believe that if Babiš will be away from the government, he could also become less visible in the media which would be great news. Babiš's constant self-celebrations and whining on TVs surely contribute to the fact that millions of people plan to vote for him – I mean the millions of brain-dead voters who find his crying and self-evaluation of his work to be sufficient for him to gain the divine status.

 

 On the other hand, the outcome may be exactly the opposite. Zeman may very well choose Babiš as the prime minister – turning the very purpose of this resignation by 180 degrees. On the other hand, even that could be helpful because Babiš's trademark whining that the "powerful are hurting him" could become visibly idiotic if he were the prime minister, even according to his voters.

 

 We will see what will happen. It seems almost guaranteed that Babiš will win the following elections – in Fall 2017 or earlier – but there could be surprises or clever moves that may change this prediction. Babiš's relative invisibility could be one of these great changes. Another one could be his arrest. His financial tricks are being investigated both by police and our IRS (which "belonged" to him so far), not to mention some EU investigators. When he is removed from the government, it could be much easier to arrest him. I haven't done research whether he could win the elections and become the prime minister while sitting in the Bory prison or next to the serial killer and the sex idol of millions of Czech women Jiří Kájínek.</s>PRAGUE, Czech Republic — The Czech prime minister announced unexpectedly on Tuesday his government will resign over unexplained business dealings of his rival Andrej Babis, the country's finance minister.

Premier Bohuslav Sobotka said that he will meet President Milos Zeman this week to formally submit the government's resignation.

Tuesday's move reflects tensions in the ruling coalition about six months ahead of the parliamentary election.

Sobotka said there are suspicions that Finance Minister Andrej Babis, the country's second richest businessman, avoided paying taxes in the past. Doubts have also surfaced about how he became wealthy.

Babis heads a centrist movement that is a to win October's ballot, paving the way for him to become prime minister. He previously denied any wrongdoing.

Sobotka's Social Democrats are a distant second. The Christian Democrats are the third member of the coalition that was created in 2014.

Sobotka said it would be an option to fire Babis but that would mean his rival would be given extra time to campaign ahead of the vote.

"That's the reason I'm opting for the only reasonable solution which is available, and that's the government's resignation," Sobotka said during a hastily organized news conference.

"A trust of the public in politics is at stake," Sobotka said.

The premier said the move will give the coalition a chance to form a government again, but without Babis. Another option is for Parliament to call early elections.

The president plays a key role in a crisis like this one because he has a right to select a new prime minister.

Babis' centrist movement came in a surprise second in the 2013 parliamentary elections with an-anti corruption message

Babis, a billionaire sometimes dubbed the "Czech Berlusconi," a comparison to Silvio Berlusconi — the Italian media tycoon who until recent years dominated his nation's politics.</s>Prague - The Czech Republic's prime minister unexpectedly announced on Tuesday that his government will resign over unexplained business dealings of the country's finance minister.

Prime Minister Bohuslav Sobotka said that he would meet President Milos Zeman this week to formally submit the government's resignation.

Sobotka's move caught political observers by surprise, but reflects tensions in the ruling coalition about six months before the next scheduled parliamentary election.

Sobotka said there are suspicions that Finance Minister Andrej Babis, the country's second-richest businessman, avoided paying taxes in the past. Doubts have also surfaced about how Babis obtained his wealth.

Babis is a rival of Sobotka's and heads a centrist movement that is a favourite to win October's ballot, paving the way for him to become prime minister. He previously denied any wrongdoing and refused to resign.

Under the constitution, the country's president fires cabinet ministers at the prime minister's request. Zeman indicated recently it made no sense to him to get rid of a government member so close to the election.

Sobotka said it would be an option to fire Babis but that would mean his rival would be given extra time to campaign ahead of the vote.</s>Czech Prime Minister Bohuslav Sobotka said on Tuesday he would resign along with the whole cabinet in response to a row with his Finance Minister Andrej Babis.

Sobotka said the resignation would allow a reformation of the cabinet with the same three-party centre-left coalition but without Babis — or lead to an early national election.

His announcement comes less than six months ahead of the next parliamentary elections, which are scheduled for October.

The Czech koruna dipped by about 0.4% in the immediate aftermath of the announcement, but has since retraced its losses. It is little changed at 24.6510 per US dollar as of 9:52 a.m. ET.

"It seems unlikely that this political realignment will have a significant impact on the economy or financial markets. The stability of Czech politics over the past three years has been the exception rather than the rule," William Jackson, senior emerging markets economist at Capital Economics, said in a note. "Prior to that, governments changed frequently. But that was never marked by sell-offs in the markets or sharp swings in the direction of policymaking."

"And unlike in other emerging markets where political instability is a concern, there are no major fiscal issues to tackle in the Czech Republic that might otherwise require a stable government," he added. "Indeed, if anything fiscal policy has been too tight."

The Czech Republic has seen the turnover of six cabinets in the past decade, according to Bloomberg data. But it has seen three years of relative stability under Sobotka's coalition government, according to the BBC.</s>Czech prime minister: government to resign over business dealings of finance minister.</s>PRAGUE: Czech Prime Minister Bohuslav Sobotka announced on Tuesday (May 2) he would submit his resignation - which also entails that of his cabinet - after a row with his popular billionaire finance minister, whose business activities have caused a storm.

"I will shortly present my resignation to President Milos Zeman. It is unacceptable for Andrej Babis to stay on as finance minister," said Sobotka, in an announcement six months before an October election.

"I want to free the hands of coalition parties so they can launch negotiations on a solution to the situation or agree on the organisation of earlier elections," he added.

Having taken office in 2014, Sobotka's leftist CSSD has shared power in a three-member coalition government with Babis's centrist ANO and the smaller centre-right KDU-CSL Christian Democratic parties.



Presidential spokesman Jiri Ovcacek declined immediate comment. Under the Czech constitution, there is no deadline for the president to accept the government's resignation.



Contacted by AFP, political analysts in Prague said that an early election was unlikely to be called during the summer, pointing instead to the possibility of a minority caretaker government being installed until the October ballot.



Ranked by Forbes as the Czech Republic's second most wealthy citizen, Babis ran the sprawling Agrofert conglomerate before putting his assets into a trust earlier this year to ward off conflict of interest allegations.



Last week Sobotka asked Babis to clarify his past use of some 55 million euros-worth ($60 million) of tax-free bonds in connection with Agrofert operations.



Babis has alleged that Interior Minister Milan Chovanec, a member of Sobotka's CSSD, ordered police to investigate his business dealings, an allegation the minister has flatly denied.



Babis who has ruled out any wrongdoing, is riding high in opinion polls, with ANO scoring 33.5 percent support compared to just 16 percent for Sobotka's CSSD in a survey conducted by the CVVM pollsters in April.



Babis is also the Czech Republic's most popular politician with a 56 percent approval rating according to another April survey by the CVVM pollsters, compared to 39 percent and sixth spot for Sobotka.



The billionaire politician has insisted that Sobotka's move to question his business dealings was part of the "political battle" ahead of the October 20-21 general election and dismissed any allegations against him as "lies or half-truths".</s>Czech Prime Minister Bohuslav Sobotka unexpectedly announced on Tuesday that he will submit his government’s resignation later this week.

Why would a prime minister disband his own government, which has been in place and relatively stable since 2014?

There are two reasons, and they both have to do with Czech Finance Minister Andrej Babis, the second richest man in the Czech Republic and the leader of the anti-establishment, pro-business party, ANO. Sobotka’s center-left Czech Social Democratic Party, CSSD, and ANO are currently in a governing coalition together.

Babis is under investigation in the Czech Republic over suspicion he avoided paying taxes, and questions related to how he made his money. The European Union is also investigating Babis for fraud. Babis is owner of the massive Agrofert chemicals. Although he put the company in a trust in early 2017 to comply with conflict of interest laws known as “Lex Babis”), the EU’s anti-fraud office is concerned that Agrofert controlled a small, anonymously owned company called Stork Nest Farm, which in 2008 received a $2.06 million EU subsidy. The subsidy was meant for small and medium sized companies, which Agrofert is not. Babis denies any wrongdoing.

Having the minister of finance under investigation over financial improprieties reflects poorly on the prime minister. Yet Sobotka said he’s resigning his whole government, and not just dismissing Babis, because he doesn’t want to make his minister of finance a martyr. But there is another reason, too.

“This move needs to be understood in the context of the pre-election campaign,” Jakub Janda of the Prague-based European Values think tank told Foreign Policy.

Czech parliamentary elections are scheduled for late October, and Babis is the country’s most popular politician. Babis’s ANO is currently polling well ahead of Sobotka’s party.

For Sobotka, “this is the last possibility” to draw voters’ attention to issues surrounding Babis,” Filip Horky, a Czech journalist for DVTV, told FP. The elections are less than six months away, and CSSD is lagging in the polls. “This is his last chance.”

“The Social Democrats have a huge problem,” said Milan Nic of the German Council on Foreign Relations. ANO is polling at around 30 percent and growing. The Social Democrats are polling at around 12 percent — and has lost roughly ten percent of its voters to ANO. With this stunt, “they’re aiming at their own voters. The ones they lost to Babis,” Nic told FP in an interview.

But whether Sobotka is able to capitalize on this gamble is not entirely up to him. Czech President Milos Zeman will control what happens next.

Zeman openly admired Russian President Vladimir Putin and U.S. President Donald Trump (Zeman’s first phone call with Trump after the inauguration apparently went better than anyone expected). He is also widely understood to prefer Babis to Sobotka. But Zeman has more of an incentive than just personal preference. Zeman faces his own elections in January. The only politician in the Czech Republic who could run against him and win is Czech Defense Minister (and former actor) Martin Stropnicky — who, as a member of ANO, answers to Babis. It is possible, Nic said, that some sort of deal could be struck between the president and the potential next prime minister, one in which Stropnicky doesn’t run and the scenario most advantageous to Babis plays out.

What does that mean? It’s unlikely snap elections would be held — that could be too risky with elections looming. And, though Zeman appointed his own caretaker government in 2013, it’s unlikely he’ll do that now (see: elections looming). The likeliest option could be that Zeman simply doesn’t accept the resignation and lets the next five months or so play out on its own. Or he could allow the resignation for Babis alone, leaving the finance minister with free time to campaign, while still painting himself martyred man — exactly what Sobotka was trying to avoid.

Neither scenario is good for Sobotka or his party. In the fight to convince voters Babis is unfit to lead, the Social Democrats, “lost this argument long ago,” says Nic.

“But when you’re desperate,” he added, “you do whatever.”
Czech Prime Minister Bohuslav Sobotka has announced that he will submit his government's resignation because of a disagreement with Finance Minister Andrej Babiš.