PRAGUE (Reuters) - The ruling Czech ANO party expects a deal on a coalition with the Social Democrats (CSSD) by Friday, ANO chairman and Prime Minister Andrej Babis said on Monday.

FILE PHOTO: The leader of ANO party Andrej Babis speaks to the media at Prague Castle after a meeting with President Milos Zeman in Prague, Czech Republic November 28, 2017. REUTERS/David W Cerny/File Photo

The ANO won elections last October but fell short of a parliamentary majority and since then most parties have refused to cooperate with it because Babis faces fraud charges. An ANO minority cabinet lost a vote of confidence in January and has since ruled as a caretaker.

“(The agenda) is in the final stages, I believe it will be absolutely clear by Friday and then we will only wait for the (CSSD) referendum,” Babis told reporters after the meeting.

He referred to an internal vote among CSSD members, which the party leadership may launch as soon as Friday. The result is expected in early June. Babis said he planned to have a confidence vote in the parliament by the end of June.

Neither Babis, nor Social Democratic chairman Jan Hamacek would comment on specific items on the new government’s agenda such as a special tax on banks the Social Democrats want or steeper progression of income tax for the highest earners.

Notes from previous meetings of the ANO and CSSD seen by Reuters showed that the ANO would reject both ideas.

CSSD chairman Hamacek said that the agreement should be acceptable to his party colleagues.

“Speaking for myself, the text which we have, is acceptable ... all problems are solved. I regard the coalition agreement as solved,” he said.

The parties also agreed that if all CSSD ministers resigned, the whole government would follow suit, Hamacek said.

The leaders declined to comment on the other key CSSD demand: that Babis resign if found guilty in an investigation into charges of illegally tapping EU subsidies. He denies the police charges and the case is yet to go to trial.

If the agreement holds, the two parties would still need a support from a third party, the Communists, to win a confidence vote. It would be the first participation of the Communists on power, however indirect, since their totalitarian rule fell during the Velvet Revolution in 1989.

Their limited role, with no cabinet seats, would not bring the kind of policy changes that have sparked conflict between the EU and Hungary and Poland. But it would still anger many Czechs who suffered under their rule.

ANO has also cooperated with the far-right, anti-EU and anti-NATO SPD party in parliament, even considering leaning on it for support for a minority government. That helped the SPD to fill the post of the deputy speaker and chair some committees.

The Social Democrats have demanded SPD officials be ousted from these positions to prevent the ANO seeking support from the anti-Islam party in case of coalition squabbles. Both Babis and Hamacek declined to comment.