Czech former PM Babis pledges cheap energy, lower pension age in bid to win back power

By Jan Lopatka

OSTRAVA, Czech Republic (Reuters) -The main Czech opposition party ANO, headed by business tycoon and former prime minister Andrej Babis, pledged on Thursday to cap energy prices, lower the pension age and reduce taxes for individuals and companies as it launched a final push to win back power next month.

ANO is leading the opinion polls ahead of October 3-4 parliamentary elections, with more than 30% support - about 10 percentage points ahead of the centre-right SPOLU (Together) coalition led by Prime Minister Petr Fiala.

While the party looks likely to head the next cabinet, the divide between ANO and the current ruling coalition parties makes it likely Babis will need to seek support from pro-Russian and anti-European Union extremist groups to form a majority.

The 71-year-old owner of chemicals, farming, food processing empire Agrofert started ANO as a pro-European, centrist movement in 2011, but has since turned it into an anti-Brussels, anti-immigration group amid a broad lurch to the right seen throughout Europe.

He recently co-founded the Patriots for Europe group in the European Parliament with populist Hungarian leader Viktor Orban and a group of European far-right parties, and in July told Reuters he would scrap a Prague-led initiative to supply Ukraine with large-calibre ammunition if he returns to power.

"We will jump-start the economy, lower taxes for individuals and companies, cancel public television and radio fees, freeze politicians' salaries," Babis told a campaign event in the city of Ostrava.

He said he would reject moves to impose the EU's carbon emission allowances on households due to take effect in 2027 to avoid price rises, setting up one potential battle with the EU.

"We will enforce cheap energy for all. We will absolutely not allow new green taxes for households and transport," Babis said.

To gain greater control over electricity price-setting, the party reiterated that it would raise the state's stake in the country's top energy provider CEZ to 100% from the current 70%.

ANO said it would cap the retirement age at 65, reversing a pension reform gradually raising the age to 67 to limit sharp increases in pension costs as part of the budget.

The party also plans to cut corporate tax to 19% from 21%, increase tax write-offs for individuals and lower value-added tax for restaurants.

Babis said the funding for these measures would come through improved tax collection and higher economic growth. The party's fiscal expert Alena Schilerova said that ANO was not pledging balanced budgets now but that they would be the result of a successful economic policy.

The main ruling party said Babis' pledges would send the country into a debt spiral. The current centre-right coalition has narrowed the public budget gap to 1.9% this year from 5% in 2021, when it took over from Babis amid the coronavirus pandemic.

($1 = 20.9570 Czech crowns)

(Reporting by Radan Sprongl in Ostrava and Jan Lopatka in Prague; Editing by Hugh Lawson)