PRAGUE (Reuters) - Czech Prime Minister Andrej Babis said on Monday he would step down from a government council dealing with European Union subsidies to avert any suspicion of conflict of interest over funds for his former business group.
The Agrofert group receives EU subsidies in a combination of non-discretionary direct payments for farming and for business, environmental and other projects. Babis put the group into trusts in 2017.
However, his critics say he is still in control as the trusts are managed by his wife and lawyers.
The European Parliament called on the European Commission on Thursday to suspend EU funding to Agrofert until a full investigation into the suspected conflict of interest had been carried out.
Gunther Oettinger, the EU commissioner for budget and human resources, sent a letter setting out options for Babis to avoid conflict of interests, one of which was to exclude himself from decisions affecting his business interests.
Babis, the second-richest Czech, said on Monday he would choose this option. The others were either for him to cut all ties to Agrofert or for subsidies to the group to be halted.
"We have agreed at the government today that I will resign from the Council for Structural and Investment Funds (ESIF) ... effective immediately," Babis said after a regular government meeting.
He added he would also take no part in government decisions on EU funds.
"We are acting according to the points which the commissioner states as possibilities," Babis told reporters.
"Although we don't agree (that there is a conflict of interest)."
Agrofert, the biggest private employer in the country, earned 4.8 billion crowns ($211 million) in profit in 2017. It said last week its Czech-based operations had received 10.24 billion crowns in subsidies in the period 2006-2017.
(Reporting by Robert Muller; editing by Andrew Roche)