Mr. Babiš’s Conflict of Interests Is Damaging to both Czechia and Europe. The Pirates’ Battle Is in the Home Stretch

MIKULÁŠ PEKSA:

It is impossible to tell whether Prime Minister Babiš promotes the interests of Czechia or of Babiš the agriculture boss. He should either sell his corporation or leave politics. Even the European Commission is running out of patience.

One of my main activities in the European Parliament, specifically in the European Parliament’s Committee on Budgetary Control (CONT) is exercising oversight over the allocation of shared EU funds. These provide an excellent opportunity for the EU’s poorer countries to catch up to their richer neighbours. Sadly, the money does not always end up in the right hands.

A typical example can be found in the Czech Prime Minister Andrej Babiš, who is also the owner of the biggest agricultural corporation in the Czech Republic – Agrofert.

Babiš the politician vs. Babiš the businessman

Andrej Babiš entered into politics in 2011. He decided to rely on professional marketing, his reputation as a successful businessman, and support from celebrities such as actors, athletes, or scholars. This combination, accompanied by massive advertising campaigns, won him a government seat in his very first elections.

We soon had to sober up. Andrej Babiš did not sell Agrofert and ended up in a typical conflict of interests. The term refers to a situation in which a politician, who is supposed to defend the interests of their citizens, directly benefits from promoting the interests of one specific company instead.

Prime Minister Babiš’s conflict of interests is visible on several levels and all of them are harmful for Czechia and the EU.

Firstly, it shows in the process adopting legislation. A nice example is the legislation on adding biofuels into all fuels. While this was meant well, it did not bring any of the intended environmental benefits. Instead, it littered Czech fields with oceans of yellow rapeseed, significantly benefiting Andrej Babiš’s companies in the process. The Czech Pirates’ proposal to abolish this obligation did not pass, since this would not be in the interests of Mr. Babiš’s corporations.

Then we have the aforementioned EU funds. Unlike for example Germany, the Czech Republic is a net beneficiary, meaning we receive more money in the form of EU subsidies than we contribute into the EU’s budget. Subsidies can be an excellent opportunity for modernizing the Czech economy and catching up with more developed countries in the West. Instead, Czechia channels over 100 million euros per year into Andrej Babiš’s companies (this sum includes public procurement; subsidies are about a third).

The EU, however, clearly forbids conflict of interests in its funding regulations. Yet Andrej Babiš used a trick to bypass this. He transferred his companies into trust funds controlled by his closest collaborators. Mr. Babiš may, however, decide to abolish these trust funds at any time and become a full owner of everything once again. It is therefore clear he is motivated to make sure his firms are well off.

The same Mr. Babiš is the head of a government, which does its best to defend every crown heading Agrofert’s way, thus blurring the line between the private and the public.

The Czech state fights for Agrofert

We find ourselves in a completely absurd situation, in which the European Commission is not willing to pay the subsidies for Agrofert, while Czechia protests against this decision. Recently, the Czech Republic even decided to bring a case against the Commission before the European Court of Justice! The Czech state is claiming that Mr. Babiš is not in a conflict of interests because of his trust fund trick.

That is unacceptable. The Czech line of argument was also clearly refuted by the European Commission’s audit. The Czech government’s approach now means that all Czech subsidies might get frozen. This way, Mr. Babiš’s mess would affect everybody who wanted to use the EU’s funds to invest into modern and sustainable technologies.

As MEP, I for example helped push through a European Parliament resolution on Mr. Babiš’s conflict of interests and I was also a member of the CONT delegation charged with reviewing this conflict of interests in Czechia.

Mr. Babiš has to choose

The problem has a simple solution. Babiš should either immediately sell all his companies (factually, not just on paper) or step down as Prime Minister. He must also not take part in any future budget negotiations where it is hard to tell whether he safeguards the interests of Czechia or of Babiš the oligarch. It is high time: the Prime Minister is once again trying to push through legislation that would cover his position some more and shamefully obfuscate his trust fund situation.

Our next hope is the October election this year. The current favourite is the Pirate coalition with the Mayors and Independents, a centrist party. After a long time, we finally have a chance for real change. Making sure that money from the EU’s budget truly help develop economies, rather than just enrich select fat cats, is in the interests of all of Europe.