Reported yesterday that Central European leaders and their allies are siphoning off tens of millions of pounds a year in EU farming subsidies through “legalised corruption”, an investigation has claimed.
Hungary’s prime minister, is alleged to have abused the payments to give “patronage”. A conglomerate owned by Andrej Babis, his Czech counterpart, is said to have “earned” £32 million from the funds last year. Mr Babis is already facing prosecution over what Czech police believe was a £2 million subsidy fraud on his country estate.
Agricultural subsidies are by far the largest item in the EU budget, accounting for about £50 billion a year, or 40 per cent of the bloc’s expenditure. While the Queen and the Duke of Norfolk are beneficiaries of EU farming subsidies, taking about £550,000 a year and £470,000 annually respectively, the practice in the former eastern bloc appears to be on a different scale.
Even though the concentration of farming subsidies in the hands of oligarchs has been well documented by local media, analysis by The New York Times suggests that it has been systematically abetted by their governments.
Mr Orban, 56, is accused of reneging on a promise to lease hundreds of thousands of acres of state-owned agricultural land to small farmers. Instead, records cited by Jozsef Angyan, a former junior minister under Mr Orban, are said to suggest that the land rights were transferred to a handful of “politically connected” individuals and their associates through poorly publicised auctions. Local farmers claim to have been told not to bother bidding. The practices in which such countries are engaged are not illegal.
The beneficiaries allegedly included two of Mr Orban’s childhood friends, who are now multimillionaires, and Istvan Tiborcz, his wealthy son-in-law. Mr Angyan said that the government had torn up the lease on his farm after he resigned from Mr Orban’s front bench, and the land was handed to the prime minister’s supporters. “If you’re critical of the system, you get nothing” he said.
Gyorgy Rasko, an agricultural economist who was farming minister in the government that preceded Mr Orban’s, described the set-up as a “crony economy”. “Orban didn’t invent the system,” he said. “He’s just running it more efficiently”.
In 2015 the Hungarian news magazine Magyar Narancs found that the business empires of three of Mr Orban’s close confederates had received a total of £40 million in a year. A spokesman for Mr Orban said that Hungary had “fully satisfied” EU regulations. Last year Brussels cut off funds to Agrofert
a Czech farming and chemicals conglomerate whose sole shareholder is Mr Babis, 65, citing a possible conflict of interest. Local campaigners have calculated that Agrofert “earns” £100 million a year in state aid, including EU subsidies.
The company was founded in 1993 by Ing. Andrej Babis with only 4 employees, who focused company´s business on fertilizers trading. Since that time, Agrofert has grown to a group with more than 33,000 employees, 250 subsidiaries of several lines: chemical industry, agriculture, food processing, forestry and timbering, ground-technologies, technology and transportation, renewable energy sources and media as well.
In June a leaked EU report found that Mr Babis had influenced the allocation of the money so that it would be funnelled into sectors where he had business interests. Prosecutors say this may have breached laws banning the payment of subsidies to people in public office.
Mr Babis has yet to respond to the claim that he made £32 million a year in EU farm payments. He denies the allegations of subsidy fraud relating to his estate and has insisted that no laws were broken in his government’s allocation of EU state aid.
It’s a classic example of the rotten to the core EU turning a blind eye to the corruption that’s rife and unacceptable to those of us whose taxes are paid for our membership of it.