Czech Business Today

The success of the new financial perspective lies undoubtedly in the capacity of the Member States, as well as the regions, to allocate and absorb the EU money, agreed key Czech economists, representatives of State administration and regional entities and the European Commission on a debate discussing the future of the EU budget on 20th September 2011 in Prague. 

Common concern was how the EU budget (mainly the revenue side) will be made up and spent when many EU countries are witnessing increasing debts. Participants stressed the importance of the reallocation of EU funds in favour of old Member States. According to the participants, the Connecting Europe Facility fund, supporting EU infrastructure, will be created to the prejudice of the EU money for new Member States. On the revenue side, there are two new controversial own resources such as European VAT and Financial Transaction Tax. 

According to Jan Gregor, Deputy Minister of Finance, the key and toughest negotiations will take place before the 2012 summit. For the Czech Republic, the most important area in the EU budget is the cohesion policy. During the negotiations, Czechs will advocate equal treatment between “old” and “new” EU Member States. Proposal of the new EU infrastructure fund connecting EU networks (in energy, ICT and transport field) does not appeal to the Czech Republic. Michal Mejstřík, President of ICC Czech Republic and Member of National Economic Government Council (NERV) highlighted that we have to assess the EU budget proposal within the context of economic situation in the whole EU. 

Many countries are struggling with huge debts and it is not clear how these countries will be able to contribute to the EU budget as well as comply with agreed rules. The EU Member States, and also the Czech Republic, should focus on support of competitiveness. For this purpose they should use financial engineering, on which the new MFF will focus. In any case, it is necessary to set up stable and explicit rules for granting EU money and rules regulating returnable forms of support, said Mejstřík. 

Radko Martínek, President of the Pardubice region, said that problems of many countries such as Greece, Portugal and Spain result partially from the fact that these countries became from the net beneficiaries the net contributors. The existing system of support in the Czech Republic was totally replaced by EU funding. The Czechs must create their own support infrastructure, from which will be financed areas such as investment in transport development.