European Commission freezes 100 billion in funds for Czech Republic
The European Commission has put on hold 100 billion crowns earmarked for two Czech operational programmes because of fears they were subject to corruption and insufficient supervision, according to the daily Mladá fronta Dnes. The Commission will not resume payments into the programmes until the Czech authorities revolve the issues.
The Czech authorities learned about the freezing of the funds last August, according to the newspaper, which is when they received a report by the European Anti-Fraud Agency, or OLAF, listing the problems in the administration and supervision of the programmes.
The paper says that in 2009, the industry and trade ministry delegated its supervision of the innovation programme to the Czech Chamber of Commerce. However, among its members are dozens of companies benefiting from the same EU funds, which are now at risk from the freeze.
Last November, the Czech government asked for the funding of the regional programme to be resumed. But the European Commission declined, and said it would not cover 300 million crowns worth projects for hospital equipment that will have to be covered from the regional or state budget. The daily also reports the programme faces a fine of another 300 million crowns over past contracts handed out in violation of Czech public procurement rules.
It’s not clear when EU funding for the two operational programmes in question could resume. Deputy regional development minister Daniel Braun told Czech Radio on Monday the freezing of the funds does not automatically mean the money is lost.
"The solution could mean that some of the projects will not be reimbursed but it’s not like that the programmes would lose the money; this could be used to cover other expenses.”
The Czech Republic has chronic issues with drawing on EU funding. Between 2007 and 2013, the Czech Republic received 260 billion crowns from the EU’s structural funds, which was only a third of the funds earmarked for the country.