Czech opposition to call no-confidence vote

By bne IntelliNews May 21, 2015

bne IntelliNews -


Czech opposition parties will call a vote of no-confidence in the centre-left government over its support for biofuels, in a bid to shine the spotlight on the conflicts of interest of billionaire Finance Minister Andrej Babis.

The move comes a day after parliament rejected a proposal to end tax advantages for biofuel producers, as part of an amendment to the excise duty law. The aim of the proposal was to harmonise Czech laws with EU legislation, as biofuel support in the EU ends as of June 30.

Babis, leader of coalition partner Ano, which is currently leading opinion polls, is owner of the country's biggest private employer, the agro-chemical Agrofert group. The company is one of the country's largest suppliers of biofuels made from rapeseed.

The opposition - and even Prime Minister Bohuslav Sobotka, leader of Social Democrats - have long questioned the conflicts of interest of the finance minister over the issue. In March, Sobotka criticised Babis for being "at constant risk of conflict of interest".

At a news conference on May 21, the leaders of the centre-right Top 09 and Civic Democratic parties, as well as the populist Dawn Movement, said they had collected signatures from all of their MPs for the petition for the vote. The signatures of at least 50 lawmakers are needed for the no-confidence motion to be submitted.

Upon receiving the petition, the Chamber of Deputies chairman calls immediately a session to debate the motion. Though the motion is highly unlikely to pass - the ruling coalition controls 111 out of the 200 seats in the lower house - it will put the spotlight on the increasingly powerful Babis. 

The Czech Republic’s second-richest man and owner of the country’s largest private employer Agrofert, Babis has come under fire for conflict of interests. He also owns two of the country’s leading newspapers. That provoked Czech legislators to propose constitutional amendments to limit Babis' powers by preventing ministers from sitting on company boards and owning enterprises.

The parliament adopted a law on biofuel support in 2010 that also increased the share of biofuel in petrol and diesel. At the time, Babis was one of the strongest lobbyists for the law as he has refineries that produce subsidised oil from his oilseed rape.

The subsidies were supposed to end this year, but the government has submitted a bill to extend the tax breaks into 2020. That would cost the budget CZK9bn. Former finance minister and deputy leader of Top 09 Miroslav Kalousek has said Agrofert stands to benefit to the tune of around CZK5bn from the extended support.

At the same time, Babis' finance ministry exercises control of a series of state-dominated companies, including fuel distribution company Cepro. That company has the responsibility for purchasing and mixing the bio-fuels going into diesel and petrol.

Agrofert-owned biofuel company Preol is the main supplier of biofuels to Cepro. Together with another Agrofert company, it supplies around 55% of Cepro’s biofuel needs. Babis has tightened his ministry's grip on Cepro, altering the board and changing senior management.


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