March 27, 2018 / 7:45 PM / 10 months ago

Czech Social Democrats could join coalition with PM Babis - party chief

PRAGUE (Reuters) - The Czech Social Democratic Party (CSSD) could join a coalition led by Prime Minister Andrej Babis, CSSD chairman Jan Hamacek said on Tuesday, an option his party had previously rejected.

Babis currently leads a minority government after his ANO party won an election last October by a large margin but fell short of a parliamentary majority. No party has yet agreed to join ANO in a coalition.

Hamacek said the CSSD would demand either the Interior or Finance Ministry in the new government in order to have control over areas where Babis faces a conflict of interest due to his business activities or an ongoing case of an alleged fraud.

Other parties have so far refused to join Babis in a coalition because of a criminal charge he faces over an alleged fraud a decade ago involving European Union subsidies worth 2 million euros. Babis denies any wrongdoing.

ANO and the Social Democrats together would command 93 seats in the 200-member lower chamber of parliament.

But the Communist Party could help such a government into existence with its 15 votes by not opposing it in a vote of confidence.

Communist chairman Vojtech Filip reiterated on Tuesday that his party was ready for such a step, although it could impose some conditions, such as vetting ministerial candidates. His party would also strongly object to moves such as the expulsion of Russian embassy staff in solidarity with Britain following a nerve gas attack on a former Russian spy.

Any such arrangement would mean the Communists having direct influence on a Czech government for the first time since the Velvet Revolution of 1989 and the collapse of communism in eastern Europe.

The Social Democrats and ANO still differ on taxes and some other issues, Hamacek said, adding that the two parties would hold further talks on Thursday.

CSSD wants to introduce an additional tax for regulated businesses, mainly for banks, which ANO has firmly rejected so far. Any agreement will also have to be put to a vote by CSSD members in an internal referendum.

Reporting by Robert Muller; Editing by Gareth Jones

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