Andrej Babis

Matt Atlas

Brussels Moves To Safeguard Funds Against Conflicts Of Interest

The European Commission wants to introduce new ways to protect EU funds from conflicts of interest, Budget Commissioner Johannes Hahn said during the European Parliament’s debate on the results of the audit on the conflict of interests of the Czech Prime Minister Andrej Babiš on Wednesday. According to him, a rule combining the drawing of EU money with respect for the rule of law could be used. Another planned adjustment could also help. A majority of MEPs called on the commission to be more active, and some also spoke of the suspension of agricultural subsidies, which Agrofert continues to receive.

MEPs initiated Wednesday’s debate in response to the April publication of an audit by the European Commission, according to which the Czech Prime Minister is in conflict of interest, as he continues to control the Agrofert holding through trust funds. Therefore, according to Brussels, companies connected with it are not entitled to subsidies from the structural funds. However, despite the audit’s findings, Babiš refuses to do so, claiming that he has complied with Czech law by transferring assets to trust funds. His government has a similar attitude.

“Conflicts of interest and the European budget are very serious issues, because any conflict of interest undermines the credibility of our policies. That is why we have also planned further measures, “said Commissioner Hahn at the plenary. “The highest priority of the European Commission is to protect taxpayers’ money. He will take all available steps to do so, “he added.

He emphasized that the institution had not reimbursed the Czech Republic in the cases covered by the audit and that the EU budget had therefore not been misused. He admitted that the domestic authorities accepted most of the proposals contained in the audit. “They have improved the conflict of interest control mechanism,” he told MEPs.

According to Hahn, the EU executive could use new instruments to protect mutual funds in the new seven-year budget period. One of them is the combination of money from the budget and the rule of law in the recipient country approved last year. According to the Commissioner for Budgets, the European Commission will recommend using this in cases where current instruments are not sufficiently effective against conflicts of interest.

It is the consistent application of the new rule that some MEPs, headed by Monika Hohlmeier, head of the Committee on Budgetary Control, demand. “It is completely unacceptable how strongly oligarchic structures are spreading in the Czech Republic, how they have strengthened. How boldly and rudely they are working to continue to enrich themselves with European or national subsidies, “pointed out the German member of the largest people’s faction in the EP, which led a parliamentary inspection mission to the Czech Republic last year.

According to her, the Commission and the Member States should find a more effective way to protect the budget and prevent subsidies from being paid by national taxpayers if they are taken away by Brussels. Hohlmeier emphasized the lack of clear rules in the area. “So that it is not possible that those who negotiate themselves were the ones who receive the most money, because they, their family or friends own the biggest businesses,” she told MEPs.

“This laziness and cooperation with the oligarch is worth more than just money. In addition to money, the Union also lost the most valuable currency: trust, “criticized pirate MEP Mikuláš Peksa for publishing the commission’s audit report a year and a half after its completion and justifying the delay in ongoing negotiations with the Czech authorities.

However, according to a member of Babiš’s YES movement, Ondřej Knotek, the current criticism of the Czech Republic is out of place, as the situation is no longer as problematic as when it was examined by auditors. “The Czech Republic is implementing the recommended measures from the audit report, strengthening the conflict of interest prevention mechanism,” said a Czech member of the Liberal Group. However, a similar understanding of subsidy conditions in the Czech Republic was expressed by only a few legislators.

“Of course, the Czechia must respect European legislation and regulations, but I consider it extremely unfortunate that some colleagues call for the launch of a mechanism that would lead to a halt to the drawing of all European money for the whole of the Czechia. In the political game, all beneficiaries would thus become hostages, “said MEP Dita Charanzová (for YES).

On the other hand, most MEPs in the debate called on the Commission not to hesitate to use the new rule of law rule in the Czech case. However, according to them, the Czech authorities, which do not effectively prevent opportunities for conflicts of interest, should also be more active. MEPs want to call for these steps in a resolution whose text they will approve at the June meeting.

In a debate on Wednesday, some politicians noted that while Agrofert does not currently receive subsidies from the EU structural funds, direct agricultural payments still do. The audit of Agrofert’s agricultural subsidies has not yet been completed by the Commission.

“You have cut off several million to fund projects, but all direct subsidies are still flowing. So (Babiš) is still one of the largest recipients of EU funds with an unresolved conflict of interest, which is unacceptable, “said German Green MEP Daniel Freund. According to his People’s Colleague Michaela Šojdrová, it would be appropriate for the Member States to decide on the capping of agricultural subsidies, so that large companies in particular do not benefit from them.

The Brussels-based correspondent of the Czech Television, Lukáš Dolanský, points out that for many countries, conflicts of interest are unacceptable because they pay more into the common European budget than they receive from it. “They know that the money will eventually end up in the countries of Central and Eastern Europe. And they want the money to help them go to projects so that it doesn’t end up in the pockets of individual politicians, “explains the rapporteur.