Czech Republic to sue Brussels for halting payments to Agrofert

Prague, Feb 5 (CTK) – The Czech Republic will file a lawsuit against the European Commission (EC) with the EU Court of Justice for suspending the subsidy payments to the Agrofert concern over PM Andrej Babiš’s suspected conflict of interest, the daily Denik N writes on its website today.

The government approved the lawsuit on Monday, based on the proposal by Agriculture Minister Miroslav Toman (for junior ruling Social Democrats, CSSD). Though the EC nodded to the subsidy payments later, this is a matter of principle for the ministry, Denik N writes.

Foreign Minister Tomáš Petříček (Social Democrats, CSSD) told CTK that the cabinet’s decision was unanimous and followed lawyers’ recommendation.

“This decision was made based on the recommendation of the lawyers who represent Czechia at the European Court of Justice. This is a step we can still take before the [EC’s] final audit is completed,” Petříček said, describing the lawsuit as a procedural matter.

“We reacted based on our opportunity to use concrete remedial measures,” he said.

Babiš owned Agrofert, a giant chemical, agricultural and food holding, until February 2017, when he placed it in trust funds to meet the amended conflict of interest law, under which the government members must not have access to public contracts, discretionary subsidies and incentives.

However, the EC says in its audit that Babiš still faces a conflict of interest as he remains the Agrofert funds’ main beneficiary.

Babiš did not attend Monday’s government debate on whether to sue the EC, he told journalists during a visit to south Moravia today.

“I did not attend the government discussion. This is a matter for our state’s lawyers,” Babiš said about the filing of the lawsuit. He reacted in the same way when asked by the media why the government did not inform them about its decision at the press conference that followed its Monday meeting.

The Agriculture Ministry says in a document the cabinet debated on Monday that it did not agree with the EC suspension of part of the subsidy payments.

This concerns the Countryside Development Programme payments in the last quarter of 2018 and the first quarter of 2019, amounting to almost 247,000 euros, an equivalent of 6.3 million crowns. The deadline for filing a lawsuit expires next Monday.

The government wants to turn to the court though the EC representatives said during the talks with the Agriculture Ministry and State Agricultural Intervention Fund (SZIF) last week that they would eventually agree with the payment for all projects of Agrofert holding’s companies, except for one worth 1.6 million crowns.

“This is a matter of principle. Even if the EC said it would pay them except for one project, we want to sue the general decision not to pay the subsidies. We do not agree with some technical details,” Denik N quotes Agriculture Ministry spokesman Vojtech Bily as saying.

The government commissioner for representing the Czech Republic before the EU Court of Justice, in cooperation with the Agriculture Ministry, should work out and file the lawsuit, demanding the invalidity of the EC decision.

The ministry said no additional costs would be connected with filing the lawsuit.

The SZIF also recommended that the ministry file a lawsuit to “examine the reasons of suspending the payments,” SZIF spokeswoman Lenka Rezkova said.

Critics claim that Babiš still controls Agrofert.

The EC legal service concluded last November that Babiš was interested in the concern’s economic profit and as the PM he also had an influence on the decision-making about the budget and subsidies, the EC auditors said.

Babiš has repeatedly denied any conflict of interest and criticises the EC for interpreting Czech law. He also dismissed that the Czech Republic would have to return any money to Brussels. Agrofert also claims it has proceeded in compliance with law.

Last November, the EC sent another audit report on Babiš’s suspected conflict of interest to Prague. The report, focused on the drawing of finances from the structural funds, concludes that Babiš violated both the Czech and European regulations on conflict of interest.

Speculations emerged saying the Czech Republic might lose subsidies worth several hundred million crowns on the basis of this audit. Babiš again denies being in a conflict of interest in this case.