By Robert Muller
PRAGUE (Reuters) - The Czech president re-appointed Andrej Babis as prime minister on Wednesday, endorsing a coalition-in-waiting that would give the anti-NATO Communists a say in policymaking for the first time since the country's 1989 revolution.
Czech politics have been in deadlock since January when the minority government of Babis' anti-establishment ANO party lost a parliamentary confidence vote.
The billionaire businessman, who is under police investigation over corruption allegations that he denies, has governed in a caretaker capacity since then.
News last week that President Milos Zeman planned to reappoint him triggered the latest in a series of street protests that have echoed some voters' unease over signs of backsliding on democracy in other eastern EU states.
Zeman said on Wednesday a new government could be appointed by the end of June, but the coalition that Babis hopes to form with the Social Democrats remains subject to a vote by members of that party, whose results are expected on June 15.
The ANO won national elections in October, but other parties have so far been reluctant to support Babis due to the allegations he illegally gained European Union subsidies meant for small businesses a decade ago - which he has called a political ploy.
"I ask you to present me your proposed government in reasonable time," Zeman told Babis after Wednesday's ceremony.
Babis was first appointed prime minister in late 2017 on campaign pledges to clean up corruption, cut taxes and limit migration.
A 'BAD' PRIME MINISTER?
The ANO and Social Democrats would hold just 93 of the lower house's 200 seats, meaning they would need parliamentary backing from the far-left Communists - their first chance to influence national policy since they fell in the Velvet Revolution almost 30 years ago.
On Tuesday, thousands demonstrated in Prague and dozens of other Czech cities against the prospect of Babis governing again while under investigation as well as his courting of the Communists.
After the appointment, Babis said he would sue Slovakia in the European Court of Human Rights over allegations he had been an informer for the Communist-era secret police (StB).
A Slovak court had rejected a demand by the Slovak-born Babis to be cleared of colluding with the StB.
Some senior Social Democrats are unhappy about allying with Babis. "He is a bad prime minister," former foreign minister Lubomir Zaoralek told the Mlada Fronta Dnes newspaper in May.
However, unofficial results reported by Czech media suggest party members are opting for the coalition.
"Today's move is in a sense rather premature, we are waiting for what the Social Democrats will say. (If they reject the coalition), there would be quite interesting duel between Babis and Zeman," political analyst Petr Just said.
Czechs are watching for signs of whether the Communists can influence foreign policy. However, Babis pushed through a mandate last week increasing army deployments, including to the Baltic states, which the Communist Party strongly opposed.
ANO has led opinion polls since 2014. It held 29 percent support in a CVVM institute survey release on Monday, with the Social Democrats second on 13 percent.
($1 = 21.9200 Czech crowns)
(Reporting by Robert Muller, additional reporting by Jason Hovet; editing by David Stamp and John Stonestreet)
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Updated Date: Jun 07, 2018 00:07:04 IST