Czech election winner Babis warms to minority government

PRAGUE (Reuters) - The anti-establishment ANO party that won the Czech parliamentary election may form a minority government if other parties remain opposed to forming a coalition, ANO chief Andrej Babis said on Friday.

The ANO won 29.6 percent in last weekend's vote, nearly three times as much as the runner-up centre-right Civic Democrats, but fell short of a majority in parliament, a fractious chamber of nine parties.

ANO's stance against immigration and corruption in mainsteam parties, pledges to bring effective government and a centrist economic programme drew voters away from parties that dominated Czech politics from the end of communism, echoing a swing to anti-system and anti-immigrant parties across Europe.

Babis has held talks with the eight other parties holding parliamentary seats but was spurned by all apart from the far-right, anti-European SPD, not his preferred coalition partner.

"If we are rejected everywhere, we will try a minority government," Babis, a billionaire businessman, told the website, part of a media group he owned until it was shifted to a trust fund this year.

"And we will come with an agenda that partially meets the programmes of all parties."

Babis has however also set more rounds of talks with all parties, and said he would wait to see how the situation develops after the new parliament first convenes on Nov. 20. ANO has 78 of the 200 seats in parliament.

Most parties shun Babis because he faces charges of fraud. Police say he hid ownership of a farm and conference centre near Prague in 2008 so it could qualify for a 2 million euro EU subsidy that was only meant for small business. He denies any wrongdoing and says the charges were politically motivated.

Babis's Agrofert group, placed in a trust fund earlier this year, spans over 250 companies in chemicals, food, farming and media around central Europe including Germany. Forbes puts his net worth at $4 billion.

The mix of business, media and political power, plus his domineering style and wish to simplify parliamentary procedures, have prompted accusations that he is a threat to democracy. He denies this, saying he only wants to move the country forward.

Pledges not to join a Babis-led cabinet were at the heart of most parties' pre-election agendas, making any turnaround tough despite positions similar to ANO on policies like infrastructure investment, tax cuts and greater government transparency.

Babis again sought to dispel fears he would be anti-European fanned by his opposition to adopting the euro currency and deeper European integration, and the possibility his cabinet could lean on eurosceptic votes from the SPD camp.

"I see no reason why we should leave the European Union. "Europe is a project thanks to which we have peace, free movement of people, goods, capital and services," he told Friday's daily Pravo.

Babis added, however, that the EU needed to better protect its external borders against inward migration and draw lessons from Britain's decision to quit the EU largely over sovereignty and immigration issues.

(Reporting by Jan Lopatka; editing by Mark Heinrich)