EU condemns "massive fraud" in Czech Republic

(Vatican Radio) European officials have accused the Czech Republic of massive fraud with subsidies of the European Union. In response the European Commission, the EU's executive branch, has cut funding to the country by hundreds of millions of euros.


The European Commission has cut EU aid to the Czech Republic by 450 million euros, ($600 million) to protest the country's revealed fraud with European subsidies.


In leaked documents, the European Commission and the EU's court of auditors conclude there were secret price deals for projects and that budgets were never respected. Public tenders were formulated in a way that only one company could benefit.


As examples auditors mentioned a tender for new trams in the country's second largest city Brno which only could go to the Skoda Holding company in the Czech Republic.

RIVER ROW

Another example involved improving the river Moldau. Authorities charged the EU 800.000 euros ($1 million) for dumping sand and gravel in the river, but a detailed bill, was never presented.


Authorities claim they take corruption seriously.


This week The Prague High Court sentenced a parliamentarian Roman Pekárek who was of the ruling Civic Democrats to five years imprisonment for bribery and abuse of office.


But he refuses to step down.


URGED TO RESIGN

Speaking on Radio Prague, the Civic Democrats deputy chairman and former Justice Minister Jiří Pospíšil
urged him to step down. “We have no influence over Mr Pekárek right now. He has suspended his membership in the Civic Democratic Party and is no longer a member of our deputies’ club. We, of course, think that under the circumstances

Pekárek should voluntarily leave the lower house,” he said.


Besides punishing the deputy, parliament also agreed overnight with controversial austerity measures aimed to bring the budget inline with EU guidelines.


But for now that has done little to ease concerns over how EU subsidies are spend in the Czech Republic which received nearly 27 billion euros ($35 billion) since 2007 and will not get less for infrastructure and the environment.


It is also seen as a warning to other Eastern European nations to stay away from fraud.

Listen to Stefan Bos' report: