Czech Business Today

Europe Must Not Become a Continent of Imports and Overregulation

Growing regulation, ambitious climate targets, pressure on agricultural and industrial capacities, and insufficient impact assessment. According to Jiří Horecký, President of the Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic (KZPS ČR), Europe risks handing over part of its industrial production and food self-sufficiency to countries with significantly lower standards. KZPS therefore calls for a more balanced European policy that protects domestic production, energy security and the economic stability of Member States.

1. How do you assess the overall competitiveness of the EU and its ability to keep pace with the USA and Asia? Where do you see the main structural weaknesses of the European economy from the perspective of KZPS?

From the perspective of KZPS ČR, I must say that the competitiveness of the EU has been weakening for a long time, and compared to the USA and Asia we are losing momentum. Europe has strong know-how and a high-quality workforce, but it is held back by overregulation, slow decision-making, insufficient investment in digitalisation, innovation and energy infrastructure, as well as high energy prices, which weaken industry.

We consider the key structural weaknesses to be administrative burden, fragmentation of the Single Market and insufficient support for strategic technologies. If the EU wants to succeed in global competition, it must become more flexible, regulate less and significantly increase support for innovation and a modern economy.

 

2. Your position on the 2050 climate-neutrality target states that climate neutrality alone will not bring a major breakthrough and must not undermine competitiveness or increase poverty. Where do you see the biggest shortcomings of the current European approach?

I do not see achieving climate neutrality by 2050 as a goal to which all economic activity of the European Union should be subordinated. The protection of nature and natural resources is a much more complex issue, and climate neutrality itself will not deliver a fundamental breakthrough in protecting the planet.

The path to climate neutrality must not threaten or reduce the competitiveness of European companies, increase poverty in the EU or undermine social cohesion. From our perspective, this is more important than an uncritical effort to meet the 2050 climate-neutrality deadline.

The EU’s pathway to climate neutrality must go hand in hand with assessing past, current and future impacts. We consider it essential that the EU continuously evaluates the effects on competitiveness and adjusts its goals accordingly. This is currently missing in the entire process.

 

3. KZPS repeatedly calls for ongoing assessment of the real economic impacts of climate policy and for targets to be adjusted based on the results. Which impacts are missing in practice today, and why is this essential?

There is still a lack of continuous and independent assessment of the real costs of climate policy on the competitiveness of businesses, employment, energy prices and the investment attractiveness of Europe. Many regulations are created without sufficient impact analysis on industry or small and medium-sized enterprises, which leads to unexpected increases in costs.

Having this data is essential, because only then can climate targets be set in a way that is realistic, economically sustainable and does not threaten Europe’s long-term growth and prosperity.

 

4. KZPS lists a number of priorities for adjusting the Green Deal — from postponing the ban on combustion engines to rejecting ETS2 or supporting nuclear energy. Which of these priorities do you consider the most critical for the Czech economy?

It is difficult to identify just one priority, because the Green Deal consists of a very large set of measures and each of them has the potential to harm Czech business. However, two issues are truly crucial at the moment.

The first is the ban on combustion engines from 2035. This is simply absurd and economic suicide. We do not even need an impact assessment (RIA) to understand that it will send European industry into decline. In our view, this date needs to be cancelled immediately, followed by an expert — genuinely expert, not ideological — debate on the real possibilities of transitioning from combustion engines to other types of propulsion. Only then should we discuss any timelines.

The second issue concerns ETS2 emission allowances. And here our request is straightforward: completely cancel their introduction and simultaneously reassess the functioning of ETS1 — again based on expert debate and a quality economic and social impact study.

 

5. What key steps must the Czech Republic take in the energy sector over the coming years to ensure security, affordable prices and competitiveness?

It is essential to accelerate the construction of new nuclear units and secure their financing, because stable sources will determine both prices and self-sufficiency. Equally important is strengthening the transmission grid and the flexibility of the energy system, so that renewable sources can be integrated effectively.

The Czech Republic must also secure long-term, affordable and predictable gas supplies, including diversification. Furthermore, it is necessary to create a stable and predictable regulatory environment that enables companies to invest, and to reduce administrative barriers for new energy projects.

 

6. The Czech labour market faces an ageing population, very low unemployment, high labour costs and heavy administrative burdens. What steps are essential to ensure labour-market stability in the coming years?

We need to prepare for an ageing workforce and the necessity of keeping people on the labour market for as long as possible. We must significantly increase participation in lifelong learning, support career changes not only in older age and strengthen the retraining system. It is also important to increase labour-market flexibility and labour migration, including accelerating and digitalising processes related to qualified foreign workers.

For companies, reducing administrative and payroll burdens is essential, as well as supporting automation and digitalisation to increase productivity. Overall, we must create an environment that motivates people to work, enables better work–life balance and increases both flexibility and stability in the labour market.

 

7. Healthcare and long-term care face rising costs, workforce shortages and demographic pressures. Which reforms does KZPS consider key for the sustainability of these systems?

Our aim is not a broad societal debate on a complete reform of the Czech healthcare system. Our goal is to set up the optimal involvement of employers and private resources, especially in the area of preventive healthcare, which has a direct impact on improving employee health, reducing illness and lowering expenditure from public health insurance. Effective prevention can reduce the need for primary care and limit the incidence of lifestyle diseases.

Our position from the employers’ perspective therefore focuses on all issues related to the role and interests of employers in the health of their employees, as well as on ensuring sustainable financing of Czech healthcare that does not require increasing health-insurance contributions and thereby raising labour costs.

Healthcare expenditure is rising, the Public Health Insurance Fund is running a deficit and if nothing changes, it will become financially unsustainable in the future. One way to improve this situation is higher efficiency, effective prevention and an increased share of private resources in the system. Employers know very well the risks and needs of employees in the area of care, intervention and prevention.

 

8. KZPS is a founding member of CEBRE and actively participates in European advisory structures. What role does KZPS play in the European debate today, and where do you see room for strengthening the voice of Czech employers?

KZPS is involved in the European social dialogue in several sectors. We also communicate with Czech Members of the European Parliament and social partners in other countries.

I see room for strengthening the voice of Czech employers in even more intensive coordination between Czech companies and European partners, more active participation in the early phases of legislative preparation and stronger promotion of pragmatic, economically realistic solutions. And for this, CEBRE is a key partner for us.

About:

Jiří Horecký

Jiří Horecký is President of the Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic, President of the Union of Employers’ Associations of the Czech Republic and Vice-President of the European Federation of Social Employers. He has long been involved in labour-market and social-policy issues, business competitiveness and the impacts of European legislation. Under his leadership, KZPS is actively engaged in debates on energy policy, the labour market, healthcare, long-term care and European economic policy.

KZPS ČR in numbers

12 member associations

140 professional associations, unions and organisations

more than 23,000 member entities

1.8 million employees represented

founding member of CEBRE

recognised social partner of the Government within the Tripartite and official commenting body

active participation in more than 15 expert working teams