Country Specific Recommendations Should Serve as a Guide; The Implementation of Reforms Depends on the Czech Republic

In the context of the European Semester, Member States deepened coordination of their economic policies, partially as a reaction to the economic and financial crisis. Based on the European Commission’s Country Specific Recommendations endorsed by the European Council, the Council formally adopted a set of recommendations to each of the Member States.

According to the Commission recommendations draft from 2nd June the Czech Republic should keep the government deficit below 3 % of GDP, implement measures to strengthen the fiscal framework, ensure sustainable public pension system, reduce the high level of taxation on labour, improve the functioning of public employment services, increase quality of the education system and energy efficiency, and adopt Public Service Act. According to Jan Michal, Head of the European Commission Representation to the Czech Republic, it is essential to deal with the issue of high level of taxation on labour and to accelerate the increase of statutory retirement age. “Most of the Commission recommendations, such as those focused on simplifying the tax system, improving the public employment service or promoting employment of young people and mothers are in line with the plans of the current Czech government and National Reform Programme 2014”, added Marek Svoboda from the Office of the Government of the Czech Republic.

Although the Czech government also agrees with the general objective of long-term sustainability of the pension scheme, increasing the retirement age is considered unacceptable. Radek Špicar from the Confederation of Industry of the Czech Republic sees education and balance between supply and demand in the labour market as key driver for growth, but he stresses the need of effective state investment as well. “Future growth will mainly depend on how well prepared the Czech workforce will be”, agrees Jan Bureš from Era Poštovní spořitelna. The potential of the recommendations to contribute to the growth of the Czech economy was discussed during the debate co-organized by CEBRE on 19th June 2014 in the European House in Prague.