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Andrej Babiš, the self-proclaimed tycoon that won last month's parliamentary vote, has refused to offload his vast business interests, while insisting he will resolve a ethical dilemma that might block him from taking the position of prime minister.

Stance on Corporate Empire

Babiš, whose political movement emerged victorious in the autumn vote but lacked a parliamentary majority, declared in a online statement that he will not divest his Agrofert group, which operates in agriculture, food production, and chemical industries.

“I have repeatedly said I will not sell Agrofert. I have repeatedly stated I will address the ethical issue in accordance with Czech and EU regulations,” Babiš commented. “This is different from selling a roll in a bakery.”

Head of State's Requirement

The head of state, Petr Pavel, announced that the 71-year-old populist must clarify openly how he will eliminate ethical conflicts arising from his business activities before being appointed prime minister.

The Czech constitution “clearly mandates the president to consider the possible emergence of a ethical issue and the possibilities for its resolution” when selecting cabinet members, Pavel's office explained.

The president “expects clarity in what precise manner Andrej Babiš will fulfil his constitutional and legal obligations”, the announcement added, noting that Pavel was ready to appoint Babiš as prime minister “immediately” once the issue was settled.

Business Operations and Regulatory Concerns

Babiš's numerous companies, primarily under the Agrofert umbrella, function in the Czech Republic and other central European countries, benefiting from substantial funds in national and EU agricultural and other grants, as well as government deals.

Under Czech law, government ministers are barred from receiving public aid or agreements. The anti-corruption watchdog Transparency International has stated that to prevent a ethical breach, Babiš must either sell, refuse government deals, or not enter government.

Previous Tenure and Current Intentions

Babiš said he would “abide by the laws” if appointed as premier, but declined to detail how in beforehand because the issue was “an extremely sensitive and private affair for me, and the media will invariably criticise me anyway”.

During his first term as prime minister, from 2017 to 2021, Babiš encountered multiple court cases and an EU investigation over potential ethical issues. He temporarily moved his assets into trust funds, while keeping certain control over them.

A court and the European Commission both ruled that this did not suffice. Babiš stated recently that he was again the exclusive proprietor of Agrofert and insisted he was “taking steps” to avoid a conflict of interest, but refused to reveal specifics.

Governing Agreement and Foreign Policy Implications

The wealthy politician has concluded a coalition agreement with two minor right-leaning groups, the ultra-conservative, Russia-friendly SPD, which has advocated a referendum on leaving the EU, and the Motorists for Themselves, which has mainly opposed the EU’s environmental policy.

The new government, if confirmed, is likely to bolster the populist movement in central and eastern Europe and might strain western support for Ukraine – although Babiš has called Ukraine’s president, Volodymyr Zelenskyy, to assure him of the nation's backing.

Pavel, who as president has a role for foreign policy, also demanded that the coalition’s programme add a declaration on the government’s position on Russia’s war in Ukraine, with a commitment to fulfilling alliance duties.

The head of state has previously stated he would not approve any cabinet candidates who might doubt the Czech Republic’s international alliances, a condition that the far-right SPD has said it will satisfy by nominating independent technocrats.