The European Commission adopted today (July 19th) a positive assessment of the Czech Republic’s recovery and sustainability plan. This is an important step towards the payment of an EU grant of EUR 7 billion under the Mechanism for Reconstruction and Sustainability (RRF). This funding will support the implementation of the key investment and reform measures outlined in the Czech Republic’s recovery and sustainability plan. It will play a key role in helping the Czech Republic emerge stronger from the COVID-19 pandemic.
The RRF is at the heart of NextGenerationEU, which will provide € 800 billion (in current prices) to support investment and reform across the EU. The Czech plan is part of an unprecedented coordinated EU response to the COVID-19 crisis, to address Europe-wide challenges through green and digital transitions, to strengthen economic and social sustainability and the cohesion of the single market.
The Commission assessed the Czech plan on the basis of the criteria set out in the RRF Regulation. The Commission’s analysis examines in particular whether the investments and reforms set out in the Czech plan support green and digital transitions; contribute to effectively addressing the challenges identified in the European Semester; and strengthen its potential for growth, job creation and economic and social sustainability.
Ensuring the green and digital transition of the Czech Republic
The Commission’s assessment of the Czech Republic’s plan shows that it allocates 42% of its total allocation to measures that support climate goals. The plan includes investment in renewable energy, modernization of central heating distribution networks, replacement of coal-fired boilers and improving the energy efficiency of residential and public buildings. The plan also includes measures for nature conservation and water management, as well as investments in sustainable mobility.
The Commission’s assessment of the Czech plan found that it set aside 22% of its total allocation for measures supporting the digital transition. The plan envisions investment in digital infrastructure, digitalisation of public administration, including healthcare, justice and building permit administration. It promotes the digitalisation of business and digital projects in the cultural and creative sectors. The plan also includes measures to improve digital skills at all levels, as part of the education system and through special programs for professional development and retraining.
Strengthening the economic and social sustainability of the Czech Republic
The Commission considers that the Czech plan effectively addresses all or a significant part of the economic and social challenges outlined in the country-specific recommendations addressed to the Czech Republic by the Council in the European Semester in 2019 and 2020.
The plan provides for measures to address the need for investment in energy efficiency and renewable energy sources, sustainable transport and digital infrastructure. Several measures aim to address the need to promote digital skills, improve the quality and inclusion of education and increase the availability of childcare facilities. The plan also envisions improving the business environment, mainly through comprehensive e-government measures, reform of building permit procedures and anti-corruption measures. R&D challenges will be enhanced through investments aimed at strengthening public-private partnerships and financial and non-financial support for innovative companies.
The plan represents a comprehensive and adequately balanced response to the Czech Republic’s economic and social situation, thus contributing appropriately to all six pillars set out in the RRF Regulation.
Support for leading investments and reform projects
The Czech plan offers projects in all seven leading European areas. These are specific investment projects that address issues that are common to all Member States in areas that create jobs and growth and are necessary for the double transition. For example, the Czech Republic has proposed € 1.4 billion to support the energy efficiency of building renovations and € 500 million to improve digital skills through education and investment in training and retraining programs for the entire workforce.
The Commission’s assessment concludes that none of the measures included in the plan cause significant damage to the environment, in accordance with the requirements set out in the RRF Regulation.
The control systems proposed in the recovery and sustainability plan are adequate to prevent, detect and correct corruption, fraud and conflicts of interest related to the use of funds. The agreements are also expected to effectively avoid double funding under this Regulation and other Union programs. These control systems are complemented by additional audit and control measures contained in the Commission’s proposal for a Council Implementation Decision as key milestones. These steps must be completed before the Czech Republic submits its first request for payment to the Commission.
President Ursula von der Leyen said: “Today, the European Commission has decided to give the green light to the Czech Republic’s plan for reconstruction and resilience. This plan will play a crucial role in supporting the transition to a greener and more digital future for the Czech Republic. Measures that improve energy efficiency, digitize public administration and prevent the misuse of public funds are exactly in line with the objectives of NextGenerationEU. I also welcome the strong emphasis that the plan places on strengthening the resilience of the Czech health system in order to prepare it for future challenges. We will stand with you every step of the way to ensure that the plan is fully implemented.
Economic Commissioner Paolo Gentiloni said: “The Czech Republic’s recovery and resilience plan will give a strong impetus to the country’s efforts to get back on its feet after the economic shock caused the pandemic. The € 7 billion in NextGenerationEU, which will flow to the Czech Republic over the next five years, will support a comprehensive reform and investment program to build a more sustainable and competitive economy. These include very significant investments in building renovation, clean energy and sustainable mobility, as well as measures to increase digital infrastructure and skills and the digitalisation of public services. The business environment will benefit from the promotion of e-government and anti-corruption measures. The plan will also support improvements in health care, including enhanced prevention and rehabilitation care. “
The Commission today adopted a proposal for a Council implementing decision on a grant of EUR 7 billion for the Czech Republic under the RRF. The Council will now have four weeks to adopt the Commission proposal.
Approval of the plan by the Council would allow the disbursement of EUR 910 million to the Czech Republic as pre-financing. This represents 13% of the total amount allocated to the Czech Republic.
An economy that works for the people Executive Vice President Valdis Dombrovskis said: “This plan will put the Czech Republic on the road to recovery and accelerate its economic growth as Europe prepares for green and digital transitions. The Czech Republic intends to invest in renewable energy and sustainable transport, while improving the energy efficiency of buildings. Its goal is to deploy greater digital connectivity across the country, promote digital education and skills, and digitize many of its public services. And it places a welcome emphasis on improving the business environment and the justice system, supported by measures to fight corruption and promote e-government – all in a balanced response to the Czech economic and social situation. Once properly put into practice, this plan will help put the Czech Republic on a solid footing for the future. “
The Commission will authorize additional payments based on the satisfactory implementation of the stages and objectives set out in the Council Implementing Decision, reflecting progress in the implementation of investments and reforms.