Czechia’s access to EU money under threat as European Commission plans deeper probe into conflict of interest
The European Commission (EC) is planning to investigate whether its rules regarding conflict of interest are being regularly breached in the Czech Republic, according to EC Vice President Věra Jourová. The statement comes days after Prime Minister Andrej Babiš was definitively found to be in a conflict of interest by an EC audit, which states that he still controls Agrofert, the company he founded, via trust funds.
The European Commission is set to investigate whether the Czech prime minister’s conflict of interest is merely an individual matter, or part of a larger systemic problem in the Czech Republic, Vice President of the European Commission Věra Jourová told Hospodářské Noviny on Monday.
If such a systemic problem were to be confirmed, it could mean that the Czech Republic would lose access to all EU funds. In other words – hundreds of billions of crowns, writes the paper.
The tool that could enable this move is the still relatively new regulation on rule of law conditionality, which states that EU budget payments can be withheld from countries in which established breaches of the rule of law compromise management of the EU funds.
MEPs from the strongest faction in the European Parliament – the European People’s Party (EPP) – called for this regulation to be activated on Monday as a result of the findings of the final version of the EC audit into Mr. Babiš’s conflict of interest.
EPP’s Monika Hohlmeier, who chairs the European Parliament’s Committee on Budgetary Control, said that the “Commission should trigger the mechanism now” in order to “shield the [EU] budget”, because the “Czech Republic is failing to comply with EU legislation and the conditionality for the protection of the Union’s budget”.
For his part, Prime Minister Babiš remains adamant that he has no conflict of interest. He responded to the audit’s findings on Sunday, saying that it had been commissioned thanks to “denouncers” from the Pirate Party.
“I have already said it many times and I will say it again – neither the Czech Republic, nor anyone else, will be returning any money. It is utterly scandalous that some Brussels bureaucrat has the guile to interpret Czech laws. It is unacceptable.”
Pirate Party MEP Mikuláš Peksa, who also sits on the Committee on Budgetary Control, said that the results of the audit cannot be ignored.
“I understand that the prime minister’s lawyers and defenders will try their best to delay the results of this audit. However, there is very little left to talk about. The case is finished. Money was illegally drawn out of EU funds here and it is necessary to give it back.”
European Commission spokesman Balázs Ujvari said on Monday that the Czech Republic does not have to return any money discussed in the audit, because Czech authorities did not request these EU subsidies to be paid out.
However, subsidies for some of the affected projects have already been pre-financed by the state from the state budget. According to an analysis from Czech Radio’s iRozhlas team, this amounts to CZK 155 million crowns that were transferred to Agrofert – the company which the EC audit says that Prime Minister Babiš still controls via trust funds.
