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EU to Suspend Some of the Funding to Czech Republic Following the Prime Minister Scandal

by in Economy

The EU is threatening to suspend funding to the Czech Republic. This follows a letter sent last Thursday by the Commission to three Czech government ministries and published by Czech news server iRozhlas.cz on Monday. The Commission warned that the Czech Republic has still not taken enough action to meet EU standards on the prevention of conflicts of interest at the highest levels of government and that if more were not done to address the issue, the Czech Republic would risk the suspension of some of its EU subsidies.

According to the European Commission, the suspension of funding is connected with the scandal surrounding Czech Prime Minister Andrej Babiš.

The European Commission claims that Babi misused EU funding and illegally benefited from certain agreements, which is a conflict of interest.

With this in mind, the European Commission was forced to publish a recommendation calling for systemic changes in the management of EU funding by the Czech Republic.

In 2017, the Prime Minister of the Czech Republic handed over his agricultural and chemical conglomerate Agrofert to two trust funds. However, an investigation conducted in 2019 found that Babi retains leverage over these funds. As a result, all grants awarded by the European Union to Agrofert are illegally awarded because of a conflict of interest. 

Brussels is disappointed that not enough action has been taken since then to tighten the prevention of conflict of interest in the Czech Republic. Although payments to Agrofert are already suspended, according to an EU official the Commission is concerned that the risks that existed in the case of Agrofert may be replicated with other companies. Also, the Commission is asking Czech authorities to maintain a register of which public officials have financial interests in which companies, and provide this information to Brussels.

Thus, the EU calls on the Czech authorities to change the mechanisms for managing EU funding, otherwise, funding will not be restored.