European Commission says Czech PM should pay back subsidies

4 Jun 19

The European Commission has called for Czech prime minister Andrej Babiš to repay millions of euros in subsidies after finding him to be in conflict of interest, according to reports of a draft document.

Brussels has halted subsidies to Agrofert - a food, chemicals and media conglomerate - founded by the billionaire, and wants his government to return €17.4m in subsidies, according to AFP.

Babis transferred Agrofert to two trust funds months before he became prime minister in December 2017 in order to comply with regulations. But the Commission said “Mr Babiš is the settlor and the sole beneficiary of these trust funds” in a leaked draft seen by the news agency on Saturday.

“The two main objectives of the trust funds are the administration of the Agrofert group and the protection of the interests of Mr Babiš,” reads the document. Babiš “therefore has a direct economic interest in the success of the Agrofert group” and failed to maintain impartiality as a politician, it added. 

The findings must be confirmed in further proceedings, according to Czech daily Hospodarske.

The Times has reported Babiš could face a vote of no confidence over the EU auditors report, and two separate criminal prosecutions as police have recommended he be charged for an alleged £2m fraud relating to his country estate.

Agrofert receives tens of millions of euros annually in EU funding, according to Reuters, most of it in the form of farm subsidies not covered by Brussels’ audit.

Transparency International chief David Ondracka told reporters the conglomerate could be barred from future Czech and EU development funding, investment incentives and public contracts - possibly amounting to €150-230m per year.

A steadily-growing series of protests have been held across the country over the past six weeks demanding the resignations of the prime minister and justice minister Marie Benešová, a close ally.

Benešová was appointed by Babiš after her predecessor resigned following a police recommendation to charge the prime minister over subsidy fraud allegations.

Protesters are expected to fill Prague’s Wenceslas Square this evening to call for Babiš’ resignation. Organisers estimate a 100,000-strong crowd will turn out, which, if correct, would be the largest demonstration in the country since 1989’s Velvet Revolution.

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