Czech Govt under Babiš transferred EU funds intended for social projects to other purposes, nonprofits want that money back
Organizations aiding people in need have called once again on the leaders of the parties in the current coalition Government of the Czech Republic to come to an agreement on how to return money from various EU funds back to the European Social Fund Plus (ESF+). The organizations are warning that the resulting lack of financing is limiting support services provided to families with children in need, to senior citizens, to people living with disabilities, to those managing debt and to the influx of refugees from ongoing wars.
Representatives of the Initiative for Equality, Justice and Human Rights, an umbrella organization of more than 30 nonprofits, made the announcement at a press conference. They have long been striving for the return of approximately EUR 270 million to ESF+.
Part of the money intended for social projects was redirected from ESF+ to other funds during the previous administration of Andrej Babiš (Association of Dissatisfied Citizens – ANO). During his administration, significant financial resources were transferred from ESF+ to the Cohesion Fund.
The move sparked concern among nonprofit organizations, who warn that it could endanger the financing of important social services. Money intended to support social projects was used to finance infrastructure projects instead, which the nonprofits criticize as incorrect use of the funds.
Calls from nonprofit organizations to a non-responsive Government
The current administration has not yet sufficiently responded to this problem. Nonprofit organizations have repeatedly called on cabinet members to arrange for the amount of resources in the ESF+ to be increased, as they are essential to projects targeting support for combating poverty and increasing both employment and social inclusion.
If that money isn’t quickly topped up, there is a danger that the ESF+ will not have enough financing, which could seriously threaten important social services.
Demands for the resources to be transferred and the legal framework
EU Member States have the right to decide on transfers of resources between funds, but such transfers must be in accordance with EU Directive 2021/1060. That directive establishes that resource transfers must be properly justified and approved by the relevant authorities, including the European Commission.
An initial transfer of up to 5 % of the original domestic allocation can be made from each fund, with the option of making subsequent transfers of up to 20 % of the original allocation between the Cohesion Fund, the European Regional Development Fund, and ESF+.
The impact of the EUR 270 million transfer
According to the available information, EUR 270 million was transferred from ESF+ to the Cohesion Fund. That move was meant to be properly justified and approved by the relevant authorities.
The transfers involved:
- From ESF+ in the more developed regions: EUR 1,678,433
- From ESF+ in the transitional regions: EUR 126,929,094
- From ESF+ in the less developed regions: EUR 141,492,736
Nonprofit organizations such as the For Housing (Za bydlení) initiative are pointing out that these resources are essential for projects targeting debt counseling, the integration of foreign nationals, support for children spending time in nature, support for convict re-entry into society, and work with addicted persons. The Monitoring Committee for the Operational Programme Employment (Operační program Zaměstnanost – OPZ) also emphasizes that ESF+ resources are crucial to the employment field and that transferring them to the Cohesion Fund had consequences that were negative and serious.
Accordance with the aims of the EU and criticism from nonprofits
According to EU Directive 2021/1060, resource transfers must be properly justified and approved by the relevant authorities, including the European Commission. In the Czech Republic, the transfer of resources from ESF+ to the Cohesion Fund was not sufficiently justified by any specific needs or impacts on the aims of ESF+.
How the transfer would support the wider aims of the EU without endangering the original aims of ESF+, focused on support for employment and social inclusion, was never proven. Nonprofit organizations’ reactions to the transfer were unequivocally negative.
The organizations warn that the transfer of EUR 270 million was insufficiently justified and directly endangers the financing of crucial social services. Limiting the financing of the ESF+ has already currently negatively influenced the ability to finance projects targeting support for the most vulnerable groups in the population.
Recommendations to the Government
We are recommending the Government of the Czech Republic reassess this transfer and undertake steps to return the resources back to the ESF+ to finance essential social services. This move is necessary to renew the continuity and stability of crucial projects improving the quality of life of the most vulnerable groups in the population and supporting social cohesion.
Returning these resources to ESF+ is crucial not just when it comes to upholding the Czech Republic’s obligations vis-à-vis the European Union, but also for ensuring the effective use of financial resources to achieve the country’s stated aims in the field of social policy.
