The Czech Republic will sue the European Commission for suspending subsidies for the Czech agricultural conglomerate Agrofert, which was formerly owned by Czech Prime Minister Andrej Babiš.
Although the European Commission later approved the subsidies, according to the Ministry of Agriculture, the lawsuit is about the principle of the matter as the European Commission suspended grants based on the alleged conflict of interest of Babiš, who is the founder and former owner of the holding.
“The Ministry of Agriculture disagrees with the suspension of part subsidies,” stated Minister of Agriculture Miroslav Toman in his lawsuit proposal approved by the government.
The suspended grants, worth almost €247,000, were part of the Rural Development Program in the last quarter of 2018 and the first quarter of 2019.
“It’s the principle of the matter. Although the European Commission has said that, except for one project, it will pay those subsidies, we disagree with some technical details of the decision to suspend the subsidies,” said Vojtěch Bílý, a spokesman for the Ministry of Agriculture.
Babiš owned the agri-food holding Agrofert until February 2017, when he transferred the company into a trust fund.
He decided to do so as after approval of an amendment to the Conflict of Interest Act, which stated that companies of the members of the government cannot have access to public contracts, non-claim subsidies, and investment incentives.
The European Commission Legal Service concluded that Babiš was invested in the economic success of the holding and, as prime minister, also influenced the decision-making on the state budget and subsidies.
Babiš repeatedly rejected the alleged conflict of interest, while Agrofert also claimed that the holding complied with the law.
