The European Commission will investigate whether the conflict of interest rules have been regularly violated in Czechia, mainly due to the EC final report by the European auditors released earlier stating that Czech Prime Minister Andrej Babis (ANO) has been definitively found to be in a conflict of interest, said Czech EC Vice-President Vera Jourova (ANO) for daily Hospodarske Noviny (HN). 

As with Hungary and Poland, the EC may apply a new mechanism attached to the disbursement of the EU seven-year budget and recovery fund, conditioning it on respect for the rule of law. If the investigation finds that the PM´s conflict is part of a larger systemic problem in the country, Czechia might lose access to all EU Funds. 

The MEPs from European People's Party Group (EPP) have called for the EC to trigger the new EU budget protection conditionality for the Czech government. “All open questions have now been answered. The final and public conclusion of the Commission is that Andrej Babis has been breaching both EU and Czech legislation,” said Chairwoman of the Budgetary Control Committee of the European Parliament and MEP Monika Hohlmeier. 

“By not preventing and sanctioning the conflicts of interest of the Czech PM, the Czech Republic is failing to comply with EU legislation and the conditionality for the protection of the Union’s budget. To shield the budget, the Commission should trigger the mechanism now,” she added. 

Czechia's billionaire populist has denied still controlling his agro-chemical conglomerate Agrofert and his government’s ministries – particularly those run by his ANO party – have fought the Commission's investigation every step of the way until the publication of the final report. Even now, Babis is threatening to use the state to challenge the audit decision at the European Court of Justice.

He told the Czech News Agency that this is a "purposeful and manipulated audit artificially caused by professional informants from the ranks of the Pirates [party]". He said that the Czech Republic will not return anything. “The Czech Republic has to defend itself, it’s not possible that some mid-level bureaucrat is interpreting our law. We are not a colony of Brussels,” Babis told the Prima television channel on Saturday.

According to a report by Czech public radio iROZHLAS.cz, the Czech state paid about CZK 155 million (€6mn) in subsidies for the selection of projects investigated by the European Commission. These have not yet been forwarded to Brussels for reimbursement. Agrofert is now blocked from receiving EU investment subsidies, while a separate EC investigation is looking at its eligibility for agricultural subsidies, given the premier's conflict of interest.

An Agrofert spokesperson said the holding did not have to pay anything back but opposition parties are demanding that the prime minister's conglomerate now reimburse the state for the domestic payments.

“Mr Babis, the game is over. If you do not resolve your conflict of interest by either resigning or by selling Agrofert, the whole of the Czech Republic might pay the price of blocked EU funds. We also expect you to immediately return over €6mn unlawfully paid to Agrofert from Czech taxpayers’ pockets,” said opposition Czech MEP Tomas Zdechovsky, the EPP Group’s spokesman for budgetary control.