Czech PM attacks EU after fraud report prompts outrage

"The Czech Republic certainly won't have to return any [EU] subsidies. There's no reason for that, because I'm not violating any Czech or European legal norms," he said.

Babis spoke as a rally by some 120,000 people in Wenceslas Square in Prague, the biggest since the country overthrew communism in the 'Velvet Revolution' in 1989, called on him to resign for the good of the country.

The protest came after a Czech newspaper, Hospodarske noviny, leaked details of the Olaf investigation into Agrofert, a Czech chemicals, farming, and media conglomerate.

Babis, its former owner, put the business into trust when he was elected in 2017.

But Olaf said he still had a direct economic interest in the company, at the same time as exercising control over Czech agricultural and industrial policy - prompting speculation it might be forced to give back about €19m of EU subsidies and be cut off from future payments worth much more.

The draft Olaf report was sent to the Czech finance ministry for comments prior to being finalised in Brussels.

"This  is a provisional finding and recommendation by the European Commission auditors, which can be changed on the basis of further information from national authorities," the finance ministry said in a statement.

"In the event that a certain expenditure is ineligible, the Czech Republic has the tools to recover it from the beneficiary," it added.

The crowd in Wenceslas Square was more outspoken, however.

"We will not act like it is normal that the prime minister of our country remains ... in such a conflict of interest that his personal problems damage the whole country," Mikulas Minar, a former theology student who organised the rally, said at the event.

"Mr Babis: You can probably buy a lot, but you cannot buy our honour, our hearts or our freedom," Jitka Cvancarova, a Czech actress who took part in the protest, also said, according to The New York Times.

Babis, whose private wealth is estimated at €3.2bn by US magazine Forbes, was originally elected on an anti-corruption ticket.

But protests broke out last November after his son, who is mentally ill, claimed his father had forced him into hiding in order to obstruct a police investigation into Agrofert.

The anti-Babis mood swelled when Czech police charged him with fraud over a €2m Agrofert subsidy in April.

It swelled again after he appointed a friendly justice minister, Marie Benesova, in what appeared to be an effort to quash the case.

The Green group in the European Parliament (EP) also urged the European Commission's anti-trust office in a letter on Tuesday to look into €10m of Czech subsidies for the conglomerate which "might lead to a distortion of competition in the EU single market", the Reuters news agency reported.

Babis, whose party, Ano, sits with the liberal Alde group in the EP, is less eurosceptic than other populist rulers in Hungary, Poland, and Romania.

But his attack on EU institutions mirrored their rhetoric and his justice ministry appointment resembled their efforts to meddle in national judiciaries.

The Czech prime minister has also used Twitter and Facebook to denounce the Olaf probe in recent days, as well as personally sending SMS messages to Reuters.

"I resolutely reject its [the report's] position and will fight for its change," he told the news agency.

The next Czech elections are not due until 2021 and Ano came out on top in the recent EP vote, even though its popularity dipped from 32 percent in April to 28 percent in May, according to the CVVM pollster.

Ongoing support by the Social Democrat party in the Ano-Led ruling coalition, as well as informal backing by far-left and far-right parties in parliament, mean that he would be unlikely to lose a no-confidence vote even if one was held.