Debate: The conflict of interest of the Prime Minister of the Czech Republic
Date: WEDNESDAY, 19 MAY 2021
Speaker: Johannes Hahn
Language: EN

The Commission services have recently published a final audit report for the European Regional Development Fund and the European Social Fund. This is not something we usually do, but we took into account the great public interest in this method, the request by the European Parliament and the European Ombudsman’s recommendation. The Czech authorities have implemented the majority of the audit recommendations contained in this report, improving the management and control system in preventing conflicts of interest. The follow-up procedure is ongoing for the remaining open issues and the next steps will depend on the progress the national authorities are making in addressing the remaining recommendations.  In the meantime what is important, and I would like to underline this, is that no expenditure was so far declared for any of the operations affected by this audit, therefore the Union budget has been and remains fully protected. When it comes to the audit of the European Agricultural Fund for Rural Development, the procedure is still ongoing. In the latest step the Member State authorities have requested a conciliation procedure. The aim is to establish the financial consequences of the audit findings and to agree as far as possible on the corrective measures that need to be implemented.  Reimbursements from the European Agricultural Fund for Rural Development requested by the Czech authorities for the projects concerned were suspended. Also in this case the budget of the European Union has been and remains fully protected.  The Czech authorities have challenged the Commission’s suspension decision before the General Court of the European Union and that procedure is following its own course. The Commission action to protect the Union budget is more than preventing conflict of interest and performing audits. Let me quickly mention a few other lines of work which are relevant and apply to mainstream programmes as well as to the Recovery and Resilience Facility.  The Commission is committed to accompanying and guiding the Member States in applying the conflict-of-interest rules. Therefore it published in April 2021 a detailed guidance document on avoidance and management of conflict and perceived conflict of interest. One of the key developments of the new period concerned the collection of data on beneficiaries and beneficial owners. This ensures access to data for audit and control purposes and helps develop a single data-mining and risk-scoring tool. These reinforced provisions are an important step in the right direction. Therefore I would like to thank many in the European Parliament for their support in this matter and I look forward to your cooperation on agreeing comparable rules for the common agricultural policy. As you know, a breach of conflict-of-interest rules can be much more than a breach of the Financial Regulation. It can also be a matter of respecting the rule of law and possible application of the conditionality regime, especially if shared management rules and financial corrections are not able to adequately protect the Union budget. This is something we will reflect upon in the guidelines for the application of the conditionality regime.  The Commission is also considering other ways to improve the protection of the Union’s financial interests. One way of doing this is to be able to exclude from European funding those economic operators benefiting from conflicts of interest. We will present such measures in the context of the forthcoming alignment of the Financial Regulation to the rules for the multiannual financial framework.  The Commission takes conflicts of interest affecting the Union budget very seriously. Unresolved conflicts of interest affect the credibility of the Union and this is why we have taken and have planned a number of measures to deal with this. So let me assure you that the Commission’s top priority is to protect taxpayers’ money and it will take all possible measures to do so.