Czech Business Today
EC Recommendations on the Czech National Reform Programme
The European Commission recommends that the Czech Republic takes action in 2018 and 2019 to improve the long-term fiscal sustainability, in particular of the pension system. It should also address weaknesses in public procurement practices, notably by enabling more quality-based competition and by implementing anti-corruption measures.
It is also important to reduce the administrative burden on investment, including by speeding up permit procedures for infrastructure work. In the area of R&D, it should remove the bottlenecks hampering research, development and innovation, in particular by increasing the innovation capacity of domestic firms. It also recommends to strengthen the capacity of the education system to deliver quality inclusive education, including by promoting the teaching profession.
The Czech Republic is experiencing strong labour market performance. Employment has risen steadily over the past six years and unemployment has fallen considerably. The potential of women, the low-skilled and disabled people remains nonetheless underutilised. Against the background of labour shortages, there is clear scope for increasing their labour market participation. All these priorities completely reflect the priorities promoted by Czech business organisations. The business also add that the process of granting work permit to third-country nationals should be eased in order to aid the flow of new workers into the Czech labour market.
The EC recommendation published on 23rd May are based on the complex analysis of the Czech economy which was published by the Commission in March and will be endorsed by the European Council and adopted by ECOFIN during the summer. In its Convergence report 2018, the Commission also evaluated the progress of the Czech Republic on its path to the introduction of euro. According to this year’s report, the Czech Republic fulfils the criterion of public finance and long-term interest rates, on the other hand it does not fulfil the criterion of price stability and the exchange rate. Its legislation is also not fully compatible with the rules of economic and monetary union.
