Czechia doesn’t have to return any EU subsidies, EC confirms

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Based on an audit of companies from the Agrofert holding, Czechia does not have to return any money to the European Union. A spokesman for the European Commission told reporters on Monday that the Czech authorities had not asked for reimbursement of any subsidies that had been subjected to the audit.

On Friday, the Commission published a final audit report, which found that Prime Minister Andrej Babiš has a conflict of interest and that the Agrofert holding is not entitled to any subsidies from Feb. 9, 2017, when the amendment to the Czech Conflict of Interest Act came into force.

According to the audit, Czechia would have to return all EU subsidies, which Agrofert has been striving for since then.

“The Czech authorities have not declared any expenditure for any of the operations covered by the report. That is why no financial correction is necessary,“ said Commission spokesman Balázs Ujvari yesterday. According to him, the Commission will continue to address only some of the audit recommendations with the Czech Republic, which have not yet been taken into account by the Czech authorities.

Babiš rejected the conclusions of the audit claiming they were biased and manipulated, and the Czech Ministry of Regional Development also expressed its disagreement. Earlier, the prime minister himself assured that there was no danger that the Czech Republic should return the money to Brussels.

“We insist that in the area of subsidies we proceed exactly according to the law, relevant rules, and concluded contracts. All subsidy projects were approved by the Czech authorities and also inspected without finding any major defects. No subsidies can be described as unjustified,“ Agrofert commented on the audit in its statement.

The strongest MEP club of the European People’s Party called on the Commission not to reimburse the Czech Republic for money from the new EU multi-annual budget based on the audit.

Czechia does not agree with the conclusions of the audit

The Czech authorities do not agree with the conclusion of the EU audit on Babiš’ conflict of interest, and only an independent court is capable of resolving the conflict over two separate legal opinions, said Minister for Regional Development Klára Dostálová at Monday’s press conference

According to her, the Commission relied mainly on Czech law in the audit and came up with an interpretation with which the Czech authorities do not agree.

“Czechia does not have to return any subsidies to Brussels. Whoever claims the opposite is wrong,” the minister said. According to her, everyone can “get a picture” of the final legal positions of both parties from the final documents.

It follows from the judicial decision of the European Court of Justice that it is not possible to challenge an audit with an action for annulment.

“Because it does not have legal effects in itself and it cannot be considered final,” Dostálová said. Minister of Finance Alena Schillerová added that the authorities are therefore looking for another way to defend themselves in court.

“The bottom line is that there must be some decision by the European Commission or the European institutions that we could challenge,” she explained.

Subsidies for the Czech Republic

By the end of March, the European Commission had reimbursed the Czech Republic 59 percent of subsidies earmarked for the 2014 to 2020 programming period. This amounts to 367.7 billion korunas (€14.2 billion) out of a total of 622.8 billion korunas (€24 billion) allocated.

Czechia has 618.4 billion korunas (€23.9 billion), 99.3 percent, contractually secured, according to data from the Ministry of Regional Development, which is responsible for drawing on subsidies. According to analysts, the pumping rate is also improving compared to other EU countries. In the long run, however, they point out that quantity is often at the expense of quality.

According to the Ministry of Regional Development, all ten operational programs complied with the so-called N + 3 rule, which means that states must exhaust the subsidies allocated to them in a given year within three years. The current programming period will not end until 2023. Until the previous programming period, Czechia has not yet had to return any money to Brussels. In the previous period, the Czech Republic had to return 27 billion korunas (€1 billion) out of a total allocated 728.6 billion korunas (€28.1 billion).

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