Page 53 - bne Magazine February 2023

bne February 2023 Central Europe I 53
a vital new tool against rogue EU states such as Hungary.
The Commission waited until after the Hungarian elections in April 2022 to trigger the mechanism, which is aimed at ensuring that EU countries adhere to the bloc's general principles as well as safeguarding the EU's budget.
In September, the European Commission proposed freezing €7.5bn from the EU budget for 2021-2027 to Hungary, covering three Cohesion funds, as well as the €5.8bn RRF money, over concerns about the rule of law, despite Budapest's pledges to implement reforms.
Hungary had until November 19 to approve a set of laws but the EC’s assessment deemed Hungary’s efforts to tackle corruption and improve the rule of law as insufficient and set 27 essential milestones to meet.
Efforts by Budapest in recent months to tackle corruption and improve the rule of law with the aim of appeasing Brussels were not sufficient to unblock the money, the Commission declared in a statement on November 30.
The Commission in a recent report found that systemic irregularities, deficiencies and weaknesses in public procurement still exist, there are limitations to effective investigation and prosecution of alleged criminal activity. The government had set up an anti-corruption working group and the Integrity Authority, a state administrative body, autonomous
of the government, but there is lack
of a comprehensive anti-corruption strategy covering also the most relevant corruption prevention areas. Public interest trusts remain outside the scope of EU public procurement directives, the EC said.
To suspend the funds to Hungary, approval by a qualified majority of EU countries is needed, meaning at least 15 of the 27 EU states, which together must make up at least 65% of the total population of the EU.
Czech populist leader Andrej Babis found not guilty in EU subsidy fraud trial
Albin Sybera
Former Czech premier Andrej Babis was pronounced not guilty in his long awaited trial in Prague over the alleged €2mn Stork's Nest subsidy fraud. The verdict comes only a few days ahead of the first round of the presidential election, where the opposition leader is one of the favourites, and could give his campaign a fillip.
“INNOCENT” tweeted the billionaire populist leader from the court room as Judge Jan Sott read out the justification for his verdict. “I am very happy that we have independent justice and that the court confirmed what I have been saying and that I have done nothing illegal.”
The judge said the prosecution had not proved intent to defraud. The state prosecutor has said he will consider whether to launch an appeal against the verdict once he has read it.
Babis has accused the country's legal and political establishment of mounting a witch hunt against him over the case, which dates back 15 years, from before he entered politics. The billionaire has fought to stop the case from coming to trial since 2017, which only happened after he lost the October 2021 election in which current Prime Minister Petr Fiala rode a wave of discontent over Babis' business links to victory.
Babis leads the most recent opinion poll for voting in the first round on Saturday with 27.9%, with his most likely challenger, General Peter Pavel, just behind at 26.7%. The two highest polling candidates will go through to a run-off on January 27, a contest that Pavel is favourite to win.
In the Stork’s Nest case, Babis and his former manager Jana Nagyova – who was also cleared – were accused of trying to conceal the conference centre’s ties to Babis’ large food, chemical, and agricultural conglomerate Agrofert in order to claim an EU subsidy designed for small and medium-sized enterprises.
Anti-corruption NGOs such as Transparency International have been ringing alarm bells about the case since Babis entered politics at the national elections in 2013. The centre had originally been owned by Agrofert but was then transferred to a new company, owned by Babis' family members, with his estranged son testifying that he was never the owner and his signature was most likely forged. The judge accepted that this was probably the case but said this had no bearing on Babis' guilt or otherwise over the subsidy.
UK bank HSBC also provided a loan to this new unknown company because of its links to Agrofert, and Agrofert advertised heavily at the conference centre. In 2015 Babis was even caught on camera boasting that Stork’s Nest was his idea and was one of his best projects. Babis refused to answer police or the court's questions over the case.
The case was embarrassing for the billionaire as his main pitch when he entered politics was as an anti-corruption tribune against the country's traditional parties. But once in office Babis and his party did little to fight corruption and have also been plagued by their own series of scandals.
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