This story originally appeared on Faktograf.hr , a fact-checking media outlet from Croatia and a certified signatory  of the Code of Principles of the International Fact-Checking Network . An edited version is published below based on the Creative Commons attribution license.
On October 31, the fact-checking service Faktograf reported that the Croatian Ministry of Economy, Entrepreneurship, and Crafts granted  around 13,200 euros [the equivalent of 14,500 USD] in subsidies from EU structural funds, to the portal Dnevno.hr, “one of the leading producers of disinformation in the Croatian media space.”
The money from the European fund for Regional Development was granted to Dnevno.hr to redesign their website in order to help their readers reach “information of interest” more quickly and easily, and to help the publisher increase their revenues.
Faktograf blames the Croatian Government for using EU money to help a portal known for spreading disinformation that often contains hate speech. The grant to Dnevno.hr was approved as part of a project called named “WWW vouchers for SMEs”  (Small and Medium Enterprises), launched in August 2018. The grant contract with the company Motus d.o.o., which is the publisher of portal Dnevno.hr and several other digital media, was signed in October 2018. The grant was approved during the mandate of the current minister of economy Darko Horvat , from the ranks of the ruling Croatian Democratic Union party (HDZ). Horvat was appointed a minister in May 2018, after his predecessor Martina Dalić had to resign  due to the corruption scandal known as Agrokor affair .
Inciting Croatian citizens against the EU — with EU funds
Faktograf finds it ironic that EU money has been used to finance a web portal which has been regularly and frequently deceiving the public and spreading disinformation about the EU.
Prior to the European Parliament Elections  of May 2019, Dnevno.hr served as a seeding site for disinformation which then spread on social media platforms. For example, they promoted bogus claims that the current European Commission (EC) Vice-President Frans Timmermans — who was then the lead candidate of the Party of European Socialists (PES) for the position of EC President —advocated for the “mass settlement of Muslim males” as a means “to achieve a goal of disappearance of one-nation states.” They also claimed that German Chancelor Angela Merkel  was attempting to deprive Croatia of its sovereignty, and that billionaire George Soros is to blame  for migrations from Muslim-majority countries to Europe.
None of these claims have been proven true, and they are just some of the disinformation that had been identified as untrue by Faktograf.
For instance, in October 2018, Faktograf fact-checked ten different disinformation items published by Dnevno.hr, all proven untrue. In some instances, bogus claims first published as far back as May 2017 had been recycled by repeated sharing over social networks. They range from climate crisis denial , to glorification of Russian President Vladimir Putin , and incitement against refugees and migrants  from Africa and the Middle East.
Ministry of Economy fails to answer Freedom of Information Request, European Commission is helpless
On October 18, Faktograf submitted a Freedom of Information (FOI) request to the Croatian Ministry of Economy, asking whether the jury that granted the EU money to the Dnevno.hr took into account the quality and factual accuracy of their contents. The state institution failed to answer the question and contrary to the law did not provide a copy of the contract signed with the publisher of Dnevno.hr.
The only information the ministry provided  as a response to the FOI request on 23 October, was a document with a general description of the conditions of distributing grants under the “WWW vouchers for SMEs” call. Faktograf repeated their request on the same day, asking for the actual information, but has not received a response so far.
Faktograf also wrote to the European Commission, addressing the spokespersons in charge of the allocations of funds at the European Fund for Regional Development. The fact-checking initiative asked if spending European funds on disinformation outlets is legal, and whether member states can use the funds to finance people who spread disinformation and incite hatred.
The European Commission responded that they can't comment on this specific case. Their official answer stressed that “the struggle against disinformation is a common and long-term challenge all EU institutions and member states must jointly face.”
According to unofficial information received by Faktograf from anonymous sources within EU institutions, the EU cannot do anything in this case because the initial rules for the distribution of the grants from European funds had not anticipated such a situation. Nobody thought before that the provisions would need to contain an explicit ban on spending EU funds to spread disinformation. By the logic that everything that has not been explicitly forbidden is allowed, it turns out that the Croatian government has not misused the money by giving it to the portal Dnevno.hr, with the goal of boosting revenues.
By using EU funds to spread falsehoods and conspiracy theories whose purpose, among others, includes the destabilisation of the European Union, it seems that for Dnevno.hr and its publisher, it is sometimes useful to ”bite the hand that feeds you”.
Promoting nationalism and hatred across Balkan borders
The portal Dnevno.hr is part of a media network founded by controversial businessman Michael Ljubas, known for taking over and bankrupting Elektroproment , a company from Zagreb which in its heyday had over 300 employees and almost 15 million US dollars in assets. Ljubas founded the portal's parent company Portal Dnevno d.o.o. in 2010, long before the term “fake news” became fashionable. The increasing awareness about the impact of disinformation as a major threat to democracy has not affected its business.
“Dnevno” means “daily” in Croatian, Serbian and Bosnian, and the media company owned by Ljubas also included web portals with the same name in Serbia and Bosnia and Herzegovina.
Bosnian media fact-checking service Raskrinkavanje.ba  maintains a database documenting sources of disinformation affecting the country with over 1500 entries collected since November 2017. According to this data, the Croatian (Dnevno.hr ), Bosnian ( Dnevno.ba ) and Serbian ( Dnevno.rs ) versions of Dnevno all spread disinformation about Bosnia and Herzegovina, including political manipulations, sensationalist content for click-bait to conspiracy theories and the promotion of pseudoscience. The Croatian version spread most of the disinformation spread by the different portals with 23 entries, followed the Bosnian version with 14 entries, and the Serbian version with 3 entries.
According to Faktograf, all three portals are infamous for inflaming nationalism and publishing disinformation. The Croatian version incites hatred against Serbs, while at the same time the Serbian version incites hatred against Croats, deepening the divide between the peoples whose states were involved in the bloody war following the breakup of Yugoslavia in 1992. Croatian Journalists’ Association (HND) warned in 2013 about the damage  caused by the portal Dnevno.hr to the already polarized Croatian society. HND said:
Attacks and defamation by that portal and to a lesser degree the printed weekly ‘7Dnevno’ against individuals, associations and groups who don't adhere to their conservative right-wing positions bring our society to the 1990s and often lower the culture of public communication to the level of hate speech used by tabloids Slobodni tjednik and Imperial during and after the war
The original parent company Portal Dnevno d.o.o. filed for bankruptcy and had been closed down in 2019. One of the reasons why Dnevno.hr went bankrupt was the loss of money on paying damages to people who sued it for defamation after publishing untrue and slanderous claims. However, the plaintiffs could not receive the damages because by May 2017 Ljubas had already sold the Dnevno.hr brand to Marija Dekanić, owner of digital marketing agency Logobox. She was a former member of the Croatian People's Party (HNS), a junior partner of the Croatian Democratic Union (HDZ) in the current ruling coalition. Dekanić is the owner of the company Motus d.o.o., the current publisher of the portal Dnevno.hr, which was the recipient of the resources from the European Fund for Regional Development for the redesign of the portal.