Andrej Babis and MIlos Zeman at Capi Hnzido


EU Demands Kc7.5 Billion For Mishandling Agriculture Subsidies

Andrej Babiš, Capi hnizdo, EU Subsidy Fraud, Stork Nest

Prague, June 12 (CTK) – The European Union wants the Czech Republic to pay some Kc7.5bn for mistakes in farmers’ subsidies, business daily Hospodarske noviny (HN) said today referring to a statement by the Agriculture Ministry.


According to the European Commission, the Czech Republic failed to check properly whether recipients of subsidies were actively involved in agricultural production.


The ministry does not agree with the EC’s sanction and will try to overrule the decision within proceedings that will apparently take a couple of months.


In 2015, the EU members introduced conditions under which subsidies should only go to entrepreneurs involved in agricultural production. In order to get a subsidy, groups of firms were to prove that at least a third of their income was generated in agriculture, but the Czech Republic failed to check the applicants for subsidies as to whether they were part of groups doing business in different areas or not. A regulation to order such checks does not exist, the ministry said.


The EU auditors found the mistakes last September. The EC wants to impose the sanction for 2015-2017 when Marian Jurecka was agriculture minister, the paper said. Jurecka told HN that legislation was ambiguous in cases for which the country is reprimanded.


The condition under which only an entrepreneur actively involved in agriculture can get a subsidy was declared invalid starting this year because of farmers’ complaints about a big bureaucratic burden, the ministry said.


In 2014-2020, Czech agriculture may get up to EUR8.2bn (over Kc210bn at current exchange rate) in European funding.


The Czech Republic’s mistakes were behind the Commission’s decision to suspend the Operational Programme Enterprise and Innovation for Competitiveness worth Kc114bn as, according to media, an audit at the end of last year detected a 14 percent error rate of the subsidised projects.