PRAGUE, Dec 9 (Reuters) - Czech President Petr Pavel appointed the billionaire leader of the populist ANO party, Andrej Babis, as prime minister on Tuesday, a key step in the formation of a government after ANO won an October parliamentary election.
Babis will take power from a strongly pro-Ukrainian centre-right administration after his full cabinet is appointed, which is expected next week.
Babis, 71, returns to power after four years in opposition, during which he shifted from the liberal centre toward European fringe right forces, joining the Patriots for Europe in the European Parliament.
His cabinet will include the far-right, anti-EU and pro-Russian SPD party and the Motorists for Themselves party, whose main agenda is opposing the EU's climate policies.
Pavel appealed to Babis during the ceremony to maintain strong relations with the EU and NATO in the current security environment.
"We have to resolve a number of issues, which will not be pleasant for the public, will require not only vision but also courage, will require not putting in doubt our attachments in the EU and NATO, and a constructive approach," he said.
BABIS HITS OUT AT BRUSSELS, PLANS LESS UKRAINE SUPPORT
Babis said he wanted to defend Czech interests at home and abroad and his cabinet to be appointed in time for him to take part at an EU leaders' summit on December 18-19.
"We will be proposing the EU also should resolve other things, not only aid for Ukraine but also issues around energy, value-added tax and tariff leaks," Babis said. "The EU too much ... takes care about spending and too little about revenue."
Babis has repeatedly criticised EU institutions and prefers dealing with national leaders in the European Council. He has vowed to reject the EU's migration policies and a plan to widen payments for carbon emissions to household heating and car fuels.
He has pledged to cut military aid to Ukraine from the national budget and has said the new government may end the Czech-run ammunition initiative which procures large-calibre ammunition for Ukraine from around the world.
Babis has said the scheme was not transparent and overpriced but has not taken a clear stance on the future of the project, which has strong backing from the president.
Pavel appointed the new prime minister after Babis said last week he would shift his main asset Agrofert, a group of over 200 companies in chemicals, food, farming and other businesses, to a trust structure to resolve a conflict of interest he would have in office.
Babis also faces accusations over receiving a 2 million euro EU subsidy to help build a conference and entertainment centre outside of Prague, which prosecutors say was claimed fraudulently.
Babis has returned the amount but denies any wrongdoing. An appeals court struck down his acquittal in the case and ordered a retrial, but Babis may avoid a rerun if parliament, controlled by his allies, votes not to lift his immunity.
(Reporting by Jan Lopatka; Editing by Frances Kerry and Hugh Lawson)
