Rich businessman likely next leader as Czechs vote in new parliament

By Jan Lopatka

PRAGUE (Reuters) - Czechs start voting on Friday in parliamentary election tipped to hand power to Andrej Babis, a rich businessman turned politician pledging to sweep out traditional parties, boost investment and keep out refugees.

The central European country has enjoyed fast economic growth, a balanced budget and the lowest unemployment in the European Union, but opinion polls nevertheless show strong voter support for Babis's ANO movement and other protest parties.

Although immigration to the Czech Republic is virtually non-existent, fear of it has played a big part in the campaign, with nearly all parties pledging to fight any attempts by the EU to force the Czechs to accept refugees distributed across the bloc.

The anti-immigration feelings follow similar trends in neighbouring countries. Parties opposed to immigration scored highly in elections in Germany last month and Austria last week, and have fed scepticism towards Europe across the EU.

The ANO movement, set up and tightly controlled by Babis, has won support from both the right and left with pledges to cut taxes and replace corrupt politicians, as well as calls to seal Europe's borders and not accept a single refugee in the country.

ANO has maintained its rhetoric of opposition to the ruling system despite serving in the outgoing government together with Prime Minister Bohuslav Sobotka's centre-left Social Democrats and the centrist Christian Democrats.

Final surveys before a polling blackout since Tuesday gave ANO, which means "Yes" in Czech, about 25-27 percent support, although indicating a slightly declining trend.

The election outcome may be a coalition similar to the outgoing one with ANO at the helm, which would mean no big change in the country's foreign policy of balancing close ties with Poland and Hungary with pragmatic relations with other EU partners like Germany, the main foreign investor and export market.

"I would not expect an earthquake. ..The most likely option is the three-strong coalition that has been there. These parties have not ruled out working with ANO," said Martin Mejstrik, political scientist at Prague's Charles University.

The prospects for a deal with ANO's current partners or centre-right parties may run up against their demands that Babis personally stay out of the cabinet because he faces police charges of fraud in drawing a 2 million euro subsidy for a conference centre a decade ago. He denies any wrongdoing.

There is an outside chance that Babis may form a minority government supported by the Communists and the far-right anti-EU Freedom and Direct Democracy Party (SPD) that jumped in final opinion polls.

Analysts see such a tie-up as unlikely. It would be negative for the markets and would pose questions over future policies toward the EU. Babis opposes adopting the euro any time soon but does not seek to leave the European Union.

Polling stations will be open from 2 pm (1200 GMT) until 10 pm on Friday and 8 am to 2 pm on Saturday. Results are expected within hours afterward.

Graphic: http://tmsnrt.rs/2vO4hPW

(Additional reporting by Jiri Skacel; editing by Peter Graff)