Tycoon Leader Rebuked by EU Lawmakers Over Ties to Business
Billionaire Leader Rebuked by EU Lawmakers Over Ties to Business
(Bloomberg) -- European Union lawmakers censured the Czech Republic’s billionaire prime minister over allegations that he benefits from taxes paid to the bloc while also helping to decide how the money is spent.
The European Parliament approved a resolution on Friday declaring that Andrej Babis hasn’t sufficiently ceded ties to his agriculture, chemicals and media empire, despite placing it in trusts before taking power.
Conflict-of-interest probes and a fraud investigation, which Babis rejects as politically motivated, have been complicating the rule of his minority cabinet since he won elections in 2017.
The non-binding motion highlights increasing tension between the EU and countries in its eastern wing over issues ranging from respect for the bloc’s legal framework to migrant policies. Brussels has been criticizing Hungary, led by Babis’s close ally Viktor Orban, and Poland for the erosion of democratic principles and challenging the rule of law.
Lawmakers called on Babis to either resolve his alleged conflict of interest or step down.
“It’s very harmful that a member who sits on the European Council can personally stand to benefit from EU money,” Lara Wolters, a member from the Budgetary Control Committee, said before the vote.
With the battle against the coronavirus pandemic overshadowing political tussles, the parliament’s move is a reminder for Babis of the risk that his companies could potentially lose access to millions of euros in EU subsidies. Babis’s Agrofert AS is one of the Czech Republic’s largest enterprises, comprising more than 200 subsidiaries and employing about 34,000 people.
According to the EU Parliament’s budgetary control committee, Agrofert received roughly 3 billion koruna ($126 million) in EU agricultural subsidies between 2016 and 2018 and about 430 million koruna in so-called cohesion funds between 2014 and 2020.
EU Budget
As prime minister of a member state, Babis has a say, with his counterparts, on how the EU budget is spent. He’s fighting the results of audits from the European Commission that have found him in conflict of interest, portraying the cases as an attack against his country.
Babis, who has never questioned Czech membership in the bloc, on Saturday denounced the parliamentary resolution. He said it was orchestrated by the Czech members of the assembly “who are doing all they can to damage the Czech Republic in Brussels,” according to a statement to the state CTK newswire.
Despite the allegations, which last year triggered mass protests, Babis’s party has kept a wide lead in opinion polls. Its support remained around 30% during the Covid-19 pandemic, in which his government helped contain contagion with one of Europe’s earliest and strictest lockdowns.
The government has increased the budget deficit target to nearly a 10th of the economy to protect jobs and help businesses stay afloat. Babis’s critics say the stimulus program also includes discretionary spending that isn’t related to the crisis but is designed to preserve his popularity ahead of elections next year.
The lawmakers also called on the commission to establish a mechanism to clearly identify final beneficiaries of subsidies sent to member states.
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