Officially, the EU’s Mercosur trade deal is a defeat for Europe’s farmers. In reality, farm lobbies just can’t stop winning. EU countries endorsed the bloc’s long-delayed agreement with South American nations on Friday, clearing the way for European Commission President Ursula von der Leyen to fly to Paraguay later this week and close a deal that has haunted Brussels for more than two decades. The agreement is going through despite tractor protests, border blockades and fierce opposition from farm groups and capitals including Paris and Warsaw. But the price of getting Mercosur over the line was steep. In the run-up to the endorsement, Brussels quietly stacked the deck in farmers’ favor. Import safeguards were hardened. Controls tightened. And last week, the Commission unveiled a €45 billion budget maneuver allowing governments to shift more money to farmers under the EU’s next long-term budget. Taken together, the concessions mean Mercosur will enter into force wrapped in protections and paired with a farm budget settlement that leaves the sector stronger than before. “Other sectors complain,” said one Commission official involved in agricultural policy. “Farmers block roads.” The official, like others in this story, was granted anonymity to speak freely. The blunt assessment captures a familiar reality inside the EU institutions. Farmers may represent a shrinking share of Europe’s economy, but they remain one of its most powerful political constituencies, capable of reshaping trade deals, budgets and reform agendas even when they fail to block them outright. Ultimately, to get Mercosur over the line, Brussels had to back away from plans to loosen farmers’ grip on the EU budget and shift money to other priorities. PRESSURE THAT WORKS The leverage farm leaders wield rests on more than theatrics. Few officials in Brussels dispute that large parts of the sector are under real strain. Farm incomes are volatile. Costs for fuel, fertilizer and feed have surged. Weather has become harder to predict. Working days are long and isolation is common in hollowing rural communities. “I understand the anger,” Agriculture Commissioner Christophe Hansen told POLITICO in an interview last month, as Brussels prepared for tractors to roll into the EU quarter. Christophe Hansen said the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” | Photo by Omar Havana/Getty Images Sympathy for farmers runs high across much of Europe, tied not just to economics but to culture, place and identity. That has always made farm subsidies one of the most politically sensitive lines in the EU budget — and one the Commission knew would be hardest to touch. That sensitivity was on display again last week, when agriculture ministers traveled to Brussels for a hastily convened meeting outside the formal calendar, called in response to farmer protests only weeks earlier. Inside, the language was ritualistic. Praise for farmers. Assurances they were being listened to. Repeated references to unprecedented safeguards and financial backing. Hansen summed it up afterward, saying the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” REFORM MEETS REALITY This outcome marks a sharp reversal of earlier ambitions inside the Commission. It’s also a reminder of just how high the stakes are when farm subsidies are in play. The Common Agricultural Policy remains the single largest line in the EU budget, absorbing roughly a third of total spending and anchoring a political contract that dates back to the bloc’s postwar foundations. Public money, in exchange for food security and rural stability, has long been one of Europe’s core bargains. That bargain has survived decades of reform. The CAP has been trimmed, greened and made more market-oriented. But its central promise — that farming would be protected — has never disappeared. After von der Leyen’s re-election in 2024, officials quietly explored loosening how tightly farm spending is locked into the EU budget. Draft ideas for the post-2027 budget would have made farm funds more flexible and easier to redirect to priorities such as defense, climate transition or industrial policy. It was a technocrat’s answer to a crowded budget. It did not survive contact with politics. The proposal landed as farm incomes came under pressure from rising costs, climate volatility and disease outbreaks. Tractors returned to Europe’s streets. Agriculture ministers closed ranks, warning of political fallout in rural heartlands. Farm lobbies mobilized in force. Hansen spent much of his first year in office traveling to farms and meeting unions, describing agriculture as a strategic asset and warning of a “convergence of pressures” hitting the sector. Behind closed doors, he fought to keep large chunks of farm funding protected. Tractors park in front of the Arc de Triomphe during a demonstration of the French agricultural union Coordination Rurale (CR) in Paris, France, on January 8, 2026. | Jerome Gilles/NurPhoto via Getty Images Those efforts didn’t calm farmers’ anger. Instead, pressure became constant, feeding into a series of concessions that steadily narrowed the scope for reform. First came assurances that most farm spending would remain ring-fenced in the post-2027 budget. Then came a new rural spending target, designed to funnel more money back into countryside projects. Last week, to get the Mercosur deal over the line, the Commission went further, proposing that farmers get early access to up to €45 billion from a broader cash pot the EU would have been saving for a rainy day. In effect, much of the post-2027 EU farm budget is on track to be sealed at levels approaching today’s, before negotiations have even begun in earnest. LOSING THE TRADE FIGHT, WINNING THE POLITICS The €45 billion now being front-loaded was originally conceived as crisis insurance. After the Covid-19 pandemic and Russia’s invasion of Ukraine, Brussels concluded that future EU budgets needed more flexibility to respond quickly to shocks. Money reserved for incremental spending reviews was meant to be the first line of defense in the next crisis. If national capitals embrace the Commission’s proposal, much of that money would be locked in for farmers before the cycle even starts, leaving less for other priority areas. Mercosur became the perfect vehicle for that pressure. Long championed by industrial exporters, the deal turned into shorthand for everything farmers fear about global competition and loss of control. The reality is more uneven. Some EU farmers, particularly in high-end food, wine and dairy, stand to gain from better access to Mercosur markets. Others, especially in beef and poultry, face tougher competition. Yet even there, trade analysts have long dismissed fears of South American goods flooding the EU as exaggerated. But nuance rarely survives a protest banner, and even the unprecedented concessions haven’t stopped farmers from protesting. The EU’s largest farm lobby, Copa-Cogeca, said Friday that the process of getting the Mercosur deal across the line “erodes trust in European governance, democratic processes and parliamentary scrutiny at a time when institutional credibility is already under strain.” The group said it would continue mobilizing farmers. Privately, Commission officials express frustration about the farm lobbies’ hardening demands.  One said that even though Brussels bends over backwards to meet farmers’ demands, every concession still falls short for farm leaders. Another pointed to Commissioner Hansen’s efforts to engage in direct dialogue with farmers across the EU. “And still, they talk as if we had done nothing,” the official said, referring directly to Copa-Cogeca. For now, farm leaders are winning.  Von der Leyen might be boarding that plane to South America. But when she returns to Brussels, they will already be gearing up for the next fight, confident they can lose the trade battle and still bend Europe’s policy in their favor.

BRUSSELS — Ursula von der Leyen wanted her next EU budget to have a rainy-day fund in case of war, pandemic or competition from other world powers. Instead, the European Commission president is already raiding it to pay off farmers and nail down the Mercosur trade deal. National leaders — including those of Mercosur holdouts France and Italy — have rushed to claim credit for the offer to free up €45 billion for Common Agricultural Policy spending years ahead of schedule. Budget analysts and diplomats, however, called it a major step back from the Commission chief’s initial ambition to help the bloc spend more nimbly in response to global chaos. The concession is part of an attempt to make the EU-Mercosur deal palatable for the bloc’s farmers, who fear their products will be undercut by Latin American exports. The sense of urgency was on full display Wednesday as agriculture ministers made their way to Brussels through snowfall and travel disruption for an extraordinary meeting called in response to last month’s farmer protest in the EU capital. Inside, the exchanges followed a familiar script. Praise for farmers was paired with assurances they had been heard, alongside repeated references to safeguards, support measures and flexibility built into the EU’s draft budget. Yet farmers, in early reactions, seemed less than impressed. In a statement, the Irish Farmers Association said von der Leyen’s proposal “smacks of desperation.” TRADING AWAY THE BUDGET The European Commission’s additional money for farmers isn’t new — it’s been brought forward from an existing rainy day fund in the EU budget proposal, which is still being negotiated and will only come into force in 2028. The Commission set aside a financial buffer to tackle unforeseen emergencies during the mid-term review of the budget in 2030 in an attempt to make the EU’s common cash pot less rigid than it currently is. In order to lock in France and Italy’s support for the Mercosur trade deal, the Commission on Tuesday offered countries the possibility of immediately handing over €45 billion from that cash pot to farmers. Trade Commissioner Maroš Šefčovič said after the ministers’ meeting that the concessions were part of a broader effort to secure backing for the Mercosur deal, which he described as “the biggest free-trade agreement we have negotiated.” Brussels, he added, had gone “further than ever before” with safeguards to address agriculture fears. “We listened to the concerns of farmers and rural communities, and we acted,” Agriculture Commissioner Christophe Hansen said, arguing that the proposed €45 billion could be mobilized as soon as the next EU budget begins in 2028. While this will significantly increase the EU’s agricultural funding in the short term, it will empty the EU’s crisis fund further down the line. “Farmers are taking all the remaining flexibility in the budget,” said Eulalia Rubio, a senior fellow at the Jacques Delors Center think tank, noting that it will eat up EU spending on other areas.  The Commission is showing “its willingness to accept that member states use all flexibility in favor of agriculture [and] not in favor of cohesion [funding to poorer regions]” or other priorities, she said. In a further concession to farmers, the Commission also pointed to a vaguely defined “rural target” worth €48 billion, floated late last year to keep the European Parliament on side during budget talks, as a pot that could be used first and foremost for agriculture. “This comes at the expense of one of the key features of the reform — flexibility,” said an EU diplomat.  Ultimately, without new funding pots, farmers don’t see much to cheer at this point. | Tobias Canales/Hans Lucas/AFP via Getty Images CLAMORING FOR CREDIT Von der Leyen could be encouraged by the initial reactions from capitals: National leaders claimed victory, presenting it as a trophy they had personally scored for their farmers. French President Emmanuel Macron credited his “constant commitment to [France’s] farmers” for the win, while Greek Prime Minister Kyriakos Mitsotakis said it “shows Greece’s voice in Europe is heard more loudly and more clearly.”  And with Rome set to cast the tie-breaking vote on a Mercosur measure Friday, Italian Agriculture Minister Francesco Lollobrigida called the “good news” evidence of “the seriousness of the work carried out by Italy.” Not all ministers were quite so quick to celebrate. Speaking after the extraordinary meeting, Spanish Agriculture Minister Luis Planas described the €45 billion offer as “an interesting and important step forward,” but added that, evidently, discussions on the future CAP were far from over.  Farm lobbyists were more guarded in their praise, however. For Luc Vernet, secretary-general at Farm Europe, the move is “potentially an improvement.”  Vernet zeroed in on the fact that von der Leyen’s offers are merely optional for capitals, “not an obligation” to hand over the cash to farmers. In his view that could lead to disparate outcomes around the bloc, depending on the success that farmers enjoy in negotiating with their governments, “further undermining the C [Common] of the CAP.” Ultimately, without new funding pots, farmers don’t see much to cheer at this point.  “Bringing forward €45bn that has already been promised to Member States isn’t the same as an additional €45bn,” said the Irish Farmers Association. Nektaria Stamouli contributed reporting from Athens.  This article has been updated.

Europe’s populist worries will intensify when right-wing billionaire Andrej Babiš becomes Czech prime minister today. Czech President Petr Pavel is set to appoint Babiš to the position after resolving longstanding conflict-of-interest issues related to the PM-elect’s conglomerate, Agrofert. Babiš and his future government have sparked fears in Brussels, where his opponents worry that alliances he could form at the European level may tilt Central Europe in an anti-establishment direction. Combined with Hungary’s Viktor Orbán and Slovakia’s Robert Fico, Babiš has the potential to jam up the legislative machinery in Brussels as it works on key files. Babiš regularly speaks of reviving the so-called Visegrád Four group, something both Orbán and Fico hope for, after it became largely dormant following Russia’s invasion of Ukraine. A new Visegrád grouping would likely count three rather than the four members it had after being founded as a cultural and political alliance in the 1990s. Poland’s current center-right prime minister, Donald Tusk, is staunchly pro-Ukraine and is thus unlikely to enter any entente with Orbán. Polish President Karol Nawrocki of the right-wing populist Law and Justice (PiS) party, though, has been talking up the prospects for Visegrád. Babiš’ government — his Patriots for Europe-aligned ANO party is in a coalition with the far-right Freedom and Direct Democracy and right-wing Motorists for Themselves parties — is also likely to fight against EU-level pro-environment initiatives. That could cause issues for climate files like ETS2, the Emissions Trading System for road and buildings, and Brussels’ bid to ban combustion engines. Czech President Petr Pavel is set to appoint Andrej Babiš to the position after resolving longstanding conflict-of-interest issues related to the PM-elect’s conglomerate, Agrofert. | Martin Divisek/EPA Following his decisive victory in the Czech election Oct. 3-4, however, Babiš has toned down his previous remarks about canceling the Czech ammunition initiative in support of Ukraine, raising questions about whether the campaign rhetoric will translate into actual policy reversals. The extent to which Czechia becomes another EU disrupter might become clearer later this week as Babiš travels to Brussels to take part in the European Council — assuming the rest of his cabinet is appointed by then.

Czech right-wing billionaire Andrej Babiš will be the new prime minister in Prague after announcing Thursday evening that he would dispose of a potential conflict of interest. Babiš’ ANO party won the Czech parliamentary election in October and formed a coalition with the far-right Freedom and Direct Democracy and right-wing Motorists for Themselves parties. But the proposed prime minister and coalition ministers must be green-lit by Czech President Petr Pavel before taking office. Babiš has been entangled in legal woes, both at home and abroad, concerning his agriculture business empire Agrofert, which is a major recipient of EU subsidies. “Of course, I could have left politics after winning the election and had a comfortable life, or ANO could have appointed someone else as prime minister,” Babiš said Thursday night in a video address to voters. “But I am convinced that you would perceive it as a betrayal,” he added. “That is why I have decided to irrevocably give up the Agrofert company, with which I will no longer have anything to do, I will never own it, I will not have any economic relations with it, and I will not be in any contact with it.” Babiš’ ascension to the Czech premiership further tilts Central Europe in an anti-establishment direction, as the populist tycoon joins Hungary’s Viktor Orbán and Slovakia’s Robert Fico as potential thorns in Brussels’ side on key EU files. In stepping back from Agrofert, however, Babiš made clear the importance of retaking the prime ministerial role. The holding’s shares will now be managed through a trust structure by an independent administrator. “This step, which goes far beyond the requirements of the law, was not easy for me. I have been building my company for almost half my life and I am very sorry that I will also have to step down as chairman of the Agrofert Foundation,” Babiš said. “My children will only get Agrofert after my death,” he added. In response, Pavel announced that he would appoint Babiš as prime minister on Dec. 9. Andrej Babiš has been entangled in legal woes, both at home and abroad, concerning his agriculture business empire Agrofert, which is a major recipient of EU subsidies. | Gabriel Kuchta/Getty Images “I appreciate the clear and understandable manner in which Andrej Babiš has fulfilled our agreement and publicly announced how he will resolve his conflict of interest,” Pavel said. Pavel previously noted that strong pro-NATO and pro-EU stances, along with safeguarding the country’s democratic institutions, will be key factors in his decision-making regarding the proposed Cabinet. Czech conflict of interest law bars officials (or their close relatives) from owning or controlling a business that would create a conflict with their governing function. This doesn’t mean ministers can’t own businesses, just that they must prioritize the public interest over their own. Similar rules exist at the EU level. When he was prime minister the first time round, from 2017 to 2021, Babiš placed Agrofert — which consists of more than 250 companies — in trust funds, but the Czech courts as well as the European Commission in 2021 concluded that he still retained influence over them and was therefore in violation of EU conflict-of-interest rules.

ATHENS — Greek authorities made dozens of arrests on Wednesday related to Greece’s spiraling farm fraud case, in an investigation led by European prosecutors. Some 37 people suspected of being members of an organized criminal group involved in large-scale agricultural funding fraud and money laundering activities were arrested, and searches were carried out throughout the country, according to a statement by the European Public Prosecutor’s Office. In a snowballing scandal, the EPPO is pursuing dozens of cases in which Greeks allegedly received agricultural funds from the European Union for pastureland they did not own or lease, or for agricultural work they did not perform, depriving legitimate farmers of the funds they deserved. POLITICO first reported on the scheme in February. Several ministers and deputy ministers have resigned over their alleged involvement in the scandal. The EU has already fined Athens €400 million after finding evidence of systemic failings in the handling of farm subsidies from 2016 through to 2023. Greece also risks losing its EU farm subsidies unless it provides an improved action plan on how it will stop funds being siphoned off into corruption. The original deadline was Oct. 2, but this has now been pushed back to Nov. 4. “The Commission is awaiting the submission of the revised action plan and in the meantime, it continues to be in contact with the Greek authorities,” a European Commission spokesperson told POLITICO earlier this month. Wednesday’s operation centered on a criminal network accused of illegally obtaining EU farm subsidies through false declarations submitted to the organization in charge of distributing EU farm funds in Greece, OPEKEPE. According to the EPPO, in the course of the preliminary investigation, 324 individuals were identified as subsidy recipients, causing an estimated cost of more than €19.6 million to the EU budget. Of these, 42 are believed to be involved in this case and are considered current members of the criminal group, says the EPPO. Most of them appear to have no actual connection to farming or producing, according to the Greek and EU authorities. The EPPO said that, at least since 2018, the group “allegedly exploited procedural gaps” in the submission of applications using falsified or misleading documents to claim agricultural subsidies from OPEKEPE. They are suspected of fraudulently declaring pastureland that did not belong to them or did not meet eligibility criteria. They allegedly inflated livestock numbers to increase their subsidy entitlements. To conceal the illicit origin of the proceeds, they are believed to have issued fictitious invoices, routed the funds through multiple bank accounts, and mixed them with legitimate income. Part of the misappropriated money was allegedly spent on luxury goods, travel and vehicles, to disguise the funds as lawful assets. Greece’s anti-money laundering authority is investigating Giorgos Xylouris, a farmer from Crete and until recently member of ruling New Democracy. Xylouris is one of the key characters mentioned in EPPO case files, under the nickname Frappé (“Iced Coffee”), regarding the OPEKEPE scandal. Some €2.5 million was discovered in his bank accounts during a random inspection, the Greek officials said. Authorities found that Xylouris had failed to submit the required financial documentation and could not justify the large sum. Eight vehicles were also identified in his possession, including a Jaguar luxury car. The case file has been sent to the prosecutors to examine possible violations of anti-bribery laws and an investigation is ongoing regarding whether money laundering has occurred.

BRUSSELS — Europe’s food system depends on an endangered species: its farmers. Every year, thousands of them retire and fewer take their place. Across the countryside, barns are shuttered, land is leased to ever-larger holdings and rural schools quietly close. The result is fewer people growing food, more imports filling supermarket shelves and a profession slipping into decline. That’s the slow-moving crisis Brussels is set to confront on Tuesday, when Agriculture Commissioner Christophe Hansen unveils the EU’s Strategy for Generational Renewal in Agriculture — a plan to keep the next generation of food producers from giving up before they’ve begun. Young farmers have been asking lawmakers to act for well over a decade, said Peter Meedendorp, the 25-year-old president of the European Council of Young Farmers, or CEJA, speaking by phone as he rushed back from his tractor on the Dutch farm he runs with his father and brothers. In the run-up to the strategy’s release, Meedendorp has been splitting his time between the fields and Brussels. While he’s eager to see what Hansen delivers, he’s also wary: “To what extent can we make all the nice recommendations reality in the field if no finance is attached?”  The European Commission wants member countries to spend 6 percent of their Common Agricultural Policy money on generational renewal — double the current level. If countries make good on that target, CEJA’s cause could be on the receiving end of over €17 billion between 2028 and 2034, a budgetary boost compared with recent years. The question is whether the plan can actually stop Europe’s farms from disappearing. PRICED OUT Over a third of farm managers in Europe are over 65, while less than one in eight are under the age of 40.  “It’s not that young people don’t want to farm — it’s that it’s nearly impossible to start,” said Sara Thill, the 21-year-old vice president of Luxembourg’s young farmers group LLJ, in an interview in Brussels last week.  Young farmers struggle to find available and affordable land to start working. One hectare of arable land in the EU costs almost €12,000. That price rises to over €90,000 on average in Meedendorp’s native Netherlands, up from €56,000 a decade ago.  “When you start, the banks ask for guarantees your parents can’t give — it’s a vicious circle,” said Florian Poncelet, a 29-year-old beef farmer who heads Belgian regional young farmers’ association FJA. Roy Meijer, chair of the Dutch young farmers farmers’ group NAJK, put it bluntly: “Banks look at young farmers as risk. If you’re 25 and want to buy land, forget it.” Across Europe, young farmers sound more impatient than nostalgic. They see agriculture not as a tradition to protect but a business to reinvent. “Young farmers aren’t waiting for subsidies,” Meijer said, pushing back against the idea that they expect easy money from Brussels. What they want, he argued, is predictability — rules that don’t change with every new reform, and recognition that they’re entrepreneurs like any others. “People my age aren’t afraid of innovation,” he added. “We want to use drones, data, AI. But to invest, we need clear, long-term rules. You can’t build a business on shifting ground.” UPPING THE ANTE Brussels has been trying to lure new farmers for decades through its CAP, with mixed results. Member countries currently dedicate 3 percent of their EU-funded farm payments to young farmer schemes — about €6.8 billion between 2023 and 2027. Now Hansen wants to up the ante. A recent draft of the strategy, obtained by POLITICO, sets a goal to double the share of EU farmers under 40 to nearly a quarter by 2040. To get there, the Commission wants countries to spend 6 percent of their CAP budgets on young farmers, limit payments to retirees and offer loans of up to €300,000 for new entrants. It also urges capitals to use tax reform and land-use policies as tools to make farming more attractive, while touting the Commission’s own plans to publish a bioeconomy strategy next month. Young farmers’ groups worry the ambition may outstrip the means. Unlike the current farm budget, which enforces the 3 percent minimum, the 6 percent target is only aspirational. That has left CEJA concerned that some governments could spend even less. Young farmers fear that generational renewal will struggle to compete against other funding priorities, and that the new strategy’s fate may hinge less on good intentions than on the next CAP itself — a reform already under fire from both farm lobbies and lawmakers. Commission officials have pushed back on those criticisms, pointing to the various funding streams young farmers could access through the new “starter pack” in the future CAP and the upcoming generational renewal strategy. The Commission has also suggested restructuring CAP payments to divert funding from large farmers to smaller — and younger — ones.  Nonetheless, “not earmarking any money for a specific group of young farmers is a signal,” Meedendorp insisted. “We have a commissioner who bills himself as a young farmer commissioner, who is also the one proposing a CAP without any earmarking for young farmers.”

First Greece. Now Slovakia.  Slovak officials face allegations of having used European funds to build fake guesthouses that only privileged insiders can stay in.  On paper, the guesthouses were intended to support rural tourism. In reality some have served as luxury villas for officials and their friends — with some even living in them permanently.  The so-called Hacienda case has been in the Slovak spotlight for months, with the opposition calling for answers and accountability and the ruling party trying to ignore it.   At the center of it all sits the national Agricultural Payment Agency (PPA), an official body under the Ministry of Agriculture responsible for distributing payments under the Common Agricultural Policy (CAP), which accounts for a third of the European Union budget. The equivalent agency in Greece was the vehicle for a fraud scandal this year that forced several top officials to resign and resulted in a €400 million EU fine.  Zuzana Šubová, who headed the PPA’s anti-corruption department for several months during Eduard Heger’s 2021-2023 government, is currently one of the agency’s leading critics. “From the very start of our work, we uncovered fatal systemic failures and a deeply corrupt and opaque environment,” Šubová told POLITICO. The agency, she added, had relied on employees hiding evidence of wrongdoing ever since it was founded in 2003.  “This system, run through these powerful staff networks, which I call an organized criminal group, lasted 20 years, and no one managed to break it. It was our department, under my leadership, that finally did,” she said.  Šubová left the agency amid controversy after she failed to win a tender to keep her job, saying in a Facebook post at the time that the contest had been rigged in order to remove her. She now chairs the Pirate Party — Slovakia, an extra-parliamentary opposition group.   “We simply need to shut the whole thing down and start from scratch — create a clean, transparent agency,” she said.  Michal Šimečka the liberal Progressive Slovakia, has alleged that tens of millions of euros intended to help people in Slovakia “were misused by Robert Fico’s government and his oligarchs.” | Jakub Gavlak/EPA In a statement to POLITICO, the PPA objected to Šubová’s remarks and said it was taking legal action “to protect its good name.”  “The PPA views the ongoing efforts by a non-parliamentary party together with Ms. Šubová — concerning calls for proposals and projects from over 10 years ago — as an insult to the hundreds of colleagues who work daily to develop Slovak agriculture and ensure the country’s food self-sufficiency,” the PPA said.  A former senior official at the agriculture ministry, who spoke to POLITICO on condition of anonymity, said however that the PPA was “rotten” and “nothing other than a bank for oligarchs.”  THE HACIENDA CASE  Nitrianske Hrnčiarovce, a small town in western Slovakia with around 2,000 inhabitants, is home to an opulent villa that cost European taxpayers €550,000. But booking a stay here requires extra steps: You won’t find it on booking.com or Airbnb, and you can only make a reservation via a form on the villa’s own website. Journalists from the Slovak news outlet 360sk tried and failed to make a reservation. The property is secured behind a locked gate.  Meanwhile, in the southwestern Slovak village of Vrčún, a house that received €220,000 in EU funds to be turned into a tourism facility has instead served as a family residence for the past five years.  In another case, a senior PPA official used EU funds to help their daughter build a family residence, according to an anti-corruption foundation. A whistleblower, who says he was fired for raising the alarm on that case, recently spoke out in Slovak media. The PPA said in response that the whistleblower had retired and his contract couldn’t be extended due to budget cuts.  “The Agricultural Payment Agency strongly refutes several false claims made by a former employee. With these statements, the individual not only misleads the public but also damages the good reputation of the PPA,” the agency said in a statement.  These are just some examples of guesthouses or buildings awarded subsidies intended for rural tourism under dubious circumstances from 2015 to 2016 under Prime Minister Robert Fico’s second government. Hacienda is a political hot-button issue. Michal Šimečka, leader of Slovakia’s largest opposition party, the liberal Progressive Slovakia, has alleged that tens of millions of euros intended to help people in Slovakia “were misused by Fico’s government and his oligarchs.” Freedom and Solidarity (SaS), another opposition party, has compiled a list of all the guesthouses in question. The properties share a common pattern: difficult to locate, barely any online presence, challenging to book, gated off, or serving as private residences. Yet according to the rules, recipients of EU subsidies are required to keep such businesses running and open to the public for at least five years after getting the money.  Moreover, several of the projects are connected to allies of Fico’s ruling Smer (Direction) party. The former senior Slovak official cited above told POLITICO he had encountered several corruption cases during his time at the institution and had filed fraud reports.  He and his colleagues were pushed to leave their jobs by mutual agreement after the department was moved to a city far from where they lived, the official said. He no longer has any information on what happened with the cases he flagged.  “We were already aware of the issues surrounding the haciendas back in 2020 and sounded the alarm. I believe that’s part of the reason we were forced to leave the ministry,” he said, adding that while many of these issues had been reported in the media, the authorities had ignored the matter.  LACK OF TRANSPARENCY  Over the years, the PPA has been repeatedly investigated by both local and European authorities.  In March the national Supreme Audit Office found that while the PPA had formally adopted anti-corruption measures, their implementation was “hampered by personnel and professional limits, weak control mechanisms and a low level of transparency.”   Last year, the EU’s OLAF anti-fraud office closed the last of six investigations into the Dobytkár (Stock Breeder) case, one of the largest corruption scandals in Slovakia’s history. The case came to light in connection with the 2018 murder of investigative journalist Ján Kuciak, who had been working on a story related to agricultural fraud. In its final probe, OLAF found that farmers had paid around €10 million in bribes to Slovak officials to secure illegitimate access to EU rural development funds distributed under the CAP. OLAF, which has no prosecutorial powers, recommended that the money be recovered and reported specific criminal acts by people involved in the scam to the Slovak authorities.  A separate Dobytkár investigation found evidence of fraud in Slovakia and resulted in criminal charges. Several individuals now on trial previously held senior positions at the PPA, including former director Juraj Kožuch. Like others in the case he stands accused of accepting bribes for approving subsidies and laundering the illicit proceeds. Kožuch, who has been released on bail, denies the charges.  Back in 2020 the European Commission froze 25 percent of reimbursements to the PPA over earlier fraud issues, demanding an external audit, a management overhaul and improved transparency. Although the agency later regained its accreditation, Šubová argues these reforms were only implemented on paper, not in practice, echoing the assessment of Slovakia’s Supreme Audit Office.  Tomáš Zdechovský, a Czech member of the European Parliament who led a Committee on Budgetary Control mission to Bratislava in May and spent months gathering evidence on suspicious cases. | Thierry Monasse/Getty Images Asked for comment, the European Commission said the PPA had been the subject of several audits over the past five years. “Those audits identified deficiencies in the proper functioning of its CAP governance systems. Therefore, DG AGRI applied financial corrections for the financial years 2019 to 2021 to protect the Union’s financial interests. DG AGRI also asked the Slovak authorities to address the root causes of those deficiencies and continues to follow the situation closely,” it said in a statement.  EUROPEAN INTEREST  Tomáš Zdechovský, a Czech member of the European Parliament who led a Committee on Budgetary Control mission to Bratislava in May and spent months gathering evidence on suspicious cases, said the embezzlement of EU funds in Slovakia was “systematic.”  “We’ve collected over 300 examples from Slovakia that show how, over the past 10 years, EU money has been consistently funneled to certain groups of people. These groups inflate the prices of all the contracts to enrich themselves,” the conservative lawmaker said, adding he had reported those 300 cases to the European Public Prosecutor’s Office (EPPO), OLAF and the European Commission.  “They draw the funds not for public benefit, but for private use. Like renovating their own homes or buying trucks and other things that have nothing to do with what the money was meant for,” Zdechovský said.  The PPA responded that it has “established control mechanisms” and that the right of every current or former employee to report corruption “is in no way restricted and can be exercised with full confidence.”  “PPA guarantees that any beneficiary who does not comply with the conditions of any project will be obliged to return the financial resources,” the agency added.    EPPO, which spearheaded the probe into the Greek farm fraud, said it was “in the process of verifying numerous allegations with a view to determine if it can exercise its competence in these cases under the applicable legal framework.” It added that it was “still too soon to share any more information.”  EPPO’s prosecutor for Slovakia, Juraj Novocký, told the Denník N daily paper last month that the office has been investigating dozens of cases related to the PPA and that in some cases, criminal prosecutions are already underway. “In specific cases, charges have already been brought against certain individuals. I firmly believe that we will be able to review and investigate the package of several dozen cases we received within a reasonable timeframe, and once we have our findings, we will certainly inform the public,” Novocký said. WHAT DOES THE GOVERNMENT SAY?  Fico’s government, faced with accusations from the opposition and the media, has attempted to downplay the saga.  Agriculture Minister Richard Takáč has called the Hacienda case a “made-up scandal” and insisted that all internal controls at the PPA are working properly. He accused the opposition of trying to topple the government and harm Slovakia’s image in a way that risks depriving it of access to EU funds.  Fico, now serving his fourth term as prime minister, has called Zdechovský, the Czech MEP, “a hired killer doing dirty opposition work.” He denied that his government was corrupt, and has blocked an opposition attempt to hold an extraordinary session of parliament to debate the matter.  Local journalists reporting on the scandal complain that the government won’t take their findings seriously.  Robert Fico, now serving his fourth term as prime minister, has called Tomáš Zdechovský, the Czech MEP, “a hired killer doing dirty opposition work.” | Pool Photo by Vladimir Smirnov via EPA “You can’t shake off the feeling that things aren’t being properly investigated. The problem lies in the leadership heading key departments, who remain in high-level positions [at the PPA],” said Xenia Makarová from the Zastavme korupciu (Let’s Stop Corruption) NGO.  According to Makarová, people who follow the rules and work to expose shady practices are systematically removed through internal restructuring, keeping the wheels of grift oiled.  “Meanwhile, the minister, and also other members of the government and parliament, attack those who are uncovering these scandals, particularly journalists,” she added.  Attacks against journalists and attempts to control independent media have sparked concern in Brussels over democratic backsliding in Slovakia.  Since Fico returned to power in October 2023 his ruling coalition has taken a leaf out of Hungarian premier Viktor Orbán’s illiberal playbook. It has abolished the special prosecutor’s office and disbanded the national crime agency atop the police force — both of which had been at the forefront of major corruption investigations and previously handled cases linked to officials from Fico’s ruling Smer party.  The agriculture ministry did not respond to a request for a comment. 

The Czech government is demanding that the business owned by former Prime Minister and election favorite Andrej Babiš return more than €200 million in farm subsidy payments, raising the stakes ahead of a national vote in October. Giving an overall figure for the first time, Agriculture Minister Marek Výborný said that the Agrofert conglomerate should repay 5.1 billion koruny (€208 million) — of which 4.24 billion koruny were EU direct payments, with the remaining 860 million koruny made up of national subsidies. The decision follows a series of court defeats suffered by Agrofert in recent months, relating to subsidies the conglomerate received back when Babiš was prime minister from 2017 to 2021. Despite putting Agrofert into two trusts, the courts found that he continued to control the business, meaning that the company was not eligible for the subsidies. “Based on the facts known to me and the Supreme Administrative Court’s decision, which was confirmed by the Constitutional Court at the end of April, we are moving forward with proceedings to reclaim payments made during that period to companies ultimately owned by Andrej Babiš,” said Výborný. Babiš accused the center-right government, which polls show faces defeat in the Oct. 3-4 polls, of pursuing a political vendetta. “Minister Výborný has been abusing his position and officials for political battles and only wants to gain visibility before the elections. The whole coalition is obsessed with Babiš and Agrofert,” said Babiš. Babiš’s populist ANO party has long been the election front-runner, with support reaching 33 percent this week, despite a dog-slaying hitman scandal that rocked his party. The tycoon campaigns on messaging often associated with the far right and has vowed to scrap ammunition deliveries to Ukraine — but has not unveiled the official election program yet. His main opponent, the Spolu coalition, which includes three out of four governing parties, lags on 20 percent. The bloc’s ratings have suffered from unpopular decisions such as a pensions reform, poor communication and internal friction — along with factors like high inflation and energy costs. In a separate but related ruling, Prague’s High Court has overturned an earlier decision clearing Babiš of wrongdoing in a €2 million EU subsidy fraud. That case is now with the same Prague District Court that in February 2024 acquitted Babiš and his former adviser and current Patriots for Europe Member of the European Parliament Jana Nagyová of fiddling ownership documents so the former leader’s agriculture holding qualified for the subsidies. The High Court said the lower court had not evaluated the evidence properly — and obliged it to follow its legal opinion. That essentially means that the lower court cannot acquit Babiš again unless new evidence is found. If he takes power after the elections, the court will need to ask the newly elected deputies to waive his immunity. Both Babiš and Nagyová have pleaded not guilty on numerous occasions, claiming the case is politically motivated.

BRUSSELS — Faced with a €30 billion-a-year repayment bill from Covid-era borrowing, the European Commission briefly considered the unthinkable — tapping into the EU’s most sacred cow, farm subsidies. For a few tense months, Brussels flirted with folding the Common Agricultural Policy and cohesion funds into broader national envelopes, a so-called national partnership plan modeled on the pandemic-era Recovery and Resilience Facility. Under the proposal, national governments would have more control over how EU money was spent, allowing for faster shifts toward priorities like defense, competitiveness and climate. Officials pitched the system as flexible and streamlined. Critics saw it as a power grab — and a stealth attempt to hollow out the CAP. As budget talks ramped up, so did the resistance. Farm lobbyists mobilized. Agriculture ministers revolted. The Commission’s own agriculture chief, Christophe Hansen, began pushing back internally. Germany’s governing Christian Democrats wrote to Commission President Ursula von der Leyen, who hails from the party,  urging their “Dear Ursula” not to fold the farm budget into broader spending plans.  “Cuts to the Common Agricultural Policy would send out completely the wrong signal,” Johannes Steiniger, one of the authors of the letter, told POLITICO. “The CAP must continue to have an independent and reliable budget.” The goal had been to fundamentally reshape how the farm budget worked. But in the end, the next CAP will look much like the current one, with its basic structure left intact. By June, the Commission had quietly shelved the restructuring plan. Jan Olbrycht, a special adviser to Budget Commissioner Piotr Serafin, said the CAP would remain as a separate pillar in the EU’s 2028-2034 budget. Rural development funding would stay within the CAP’s two-pillar structure. Earlier ideas to shift that money to the cohesion rubric were, Olbrycht said, “over, finished.” That marked a major retreat before the official unveiling of the Commission’s budget proposal on July 16. And it has underscored the raw political power the farm lobby can still exert in Brussels, even as the number of farmers declines and the EU faces growing calls to redirect money toward strategic challenges. STRUCTURE SAVED, BUT CUTS STILL STING For Europe’s farmers, the victory is bittersweet. With pressure mounting to repay the Covid debt and finance new priorities, Brussels is trying to stretch a budget that is unlikely to grow. The Commission is still expected to propose significant cuts to overall CAP funding. Early estimates suggest a reduction of between 15 percent and 25 percent compared to current levels. While the structure of the CAP may be safe, the size of the pot is not. At nearly €400 billion, the CAP currently accounts for almost a third of the EU’s entire seven-year budget. Created in 1962, it is the bloc’s oldest common policy — and is fiercely defended by the vested interests that have benefited from it for so long. European Commissioner for Agriculture and Food Christophe Hansen. | Olivier Hoslet/EFE via EPA In practice, however, farmers will still lose money. Top-ups to direct payments, the backbone of the CAP, are likely to shrink. That could be enough to rekindle the protests that swept across Europe last year, especially if farmers feel they’ve been strung along with structural protections but no financial ones. “If the Commission is serious about its vision for agriculture and wants to strengthen European agriculture and make it fit for the future, rumors of a drastic budget cut cannot be a serious option,” Bernhard Krüsken, general secretary of the German Farmers’ Association, told POLITICO.  “Anything other than an increased and earmarked agricultural budget will not do justice to the challenges of the time.” The failed attempt to restructure the CAP also reveals how hard it is to shift money in Brussels. Even as EU officials argue for a more strategic budget, the traditional alliance of farm groups, conservative MEPs, and agriculture ministries continues to defend the CAP with almost religious fervor. The political compromise leaves both sides unsatisfied. For farm groups, structural survival without financial security is little comfort. For budget hawks and modernizers, keeping the CAP intact looks like a missed opportunity. But it also illustrates a deeper truth about Brussels: Power in EU budget politics isn’t just about the numbers. It’s about the coalitions that can be mobilized, and the red lines drawn early and loudly. And this time, the farmers shouted loudest. Bartosz Brzeziński reported from Brussels. Oliver Noyan reported from Berlin. Gregorio Sorgi contributed reporting.

ATHENS — Greece’s center-right New Democracy government announced Cabinet changes on Saturday following a wave of resignations in a massive scheme to defraud the EU’s farm budget. Thanos Plevris, a hardline MP with the nationalist Laos party, was appointed migration minister. He succeeds Makis Voridis, the highest profile official to resign on Friday after the European prosecutor implicated Greek ministers in the multimillion-euro scam involving EU agricultural funds. Other changes in the government of Greek Prime Minister Kyriakos Mitsotakis include the appointments of Haris Theocharis as deputy foreign minister; Yiannis Andrianos as deputy minister for rural development and food; and Christos Dermentzopoulos as deputy minister of digital governance. Opposition parties were quick to criticize the appointment of Plevris. “The far-right line of Mitsotakis continues unabated with the choice of Thanos Plevris, an inhumane, dead-end and frightening line overall for the refugee issue and the image of the country,” the Syriza party said in a statement. The New Left party called his appointment “a message of hatred, racism, authoritarianism.” In a statement, the party recalled comments by Plevris in the past that “border security cannot exist if there are no casualties and, to be clear, if there are no deaths.” The European Public Prosecutor’s Office (EPPO) is pursuing dozens of cases in which Greeks received EU agricultural funds for pastureland they did not own or lease, or for agricultural work they did not perform, thereby depriving legitimate farmers of the funds they deserved. The fraud was the subject of a POLITICO investigation earlier this year. The hefty case file was referred to the Greek parliament as it included information regarding the alleged involvement “in criminal offenses” of two former ministers overseeing the rural development and food portfolio. According to Greek law, only the national parliament has the authority to investigate and prosecute current or former members of the Greek government. This means that, despite its broad mandate to investigate the misuse of EU funds, the EPPO lacks the power to pursue such cases in Greece. The agency has called this a violation of its founding EU regulation. Earlier Saturday, two more New Democracy officials stepped down after their names appeared in the case file. Andreas Karasarinis, secretary of the ruling party’s agricultural organizations, and Yiannis Troullinos, a member of its political committee, submitted their resignations.