European Structural and Investment Funds in Czech Republic

Excerpt from the COM(2015) 639 final, ANNEX II: Country fiches:

1. ESIFs in the Czech Republic

Economic and social challenges in the ESIF context

Current macroeconomic trends are positive: the Czech economy returned to growth in 2014, following two years of contraction. Nevertheless, negative demographic trends are expected to lead to increases in both pension and healthcare spending in the long term. The economy currently belongs to the group of ‘moderate innovators’ and is expected to move up in the added-value chain. Unemployment has been on the decline, but the labour market is characterised by low participation of certain groups and a mismatch between skills supply and demand.

Analysis of Europe 2020 strategy targets for the Czech Republic shows significant gaps at national and regional level on increasing R&I spending (especially private investment), improving energy efficiency, reforming tertiary education, fighting corruption and proper application of public procurement rules. EU policy recommendations as part of the European Semester propose establishing a central register of public contracts, proper implementation of an anti-corruption plan, adopting higher education reform and increasing the participation in education of disadvantaged (particularly Roma) children.

Main priorities and results

In the 2014-2020 period, the ESIF will be used to make the Czech economy more competitive and innovative by investing EUR 2.5 billion in research, technological development and innovation. The country has been catching up on its R&D investment lag following increased allocations from ESIF and is expected to increase spending on R&D as a percentage of GDP to 2.97 % in 2020. The investment will be used to boost R&I structures and capacity and improve cooperation between the research sector, businesses and tertiary education.

More than EUR 2 billion (1.4 % of GDP) will be used as the main source of funding to support the shift to a low-carbon economy. The energy and resource intensity of Czech industry (mainly from coal) is one of the highest in the EU. The main achievements in this area are expected to be an increase in the production of energy from renewable resources (by 83 MW) and a reduction in the level of greenhouse gases (by 920 000 tonnes CO2/year).

The ESIF will contribute EUR 2.8 billion to environmental protection and the efficient use of resources. The investment will be spent on: improving water quality (e.g. 150 000 additional people served by improved water supply), waste management (e.g. an annual increase of 700 000 tonnes in waste recycling capacity), air quality, improving biodiversity, bringing 400 000 ha of land into the organic farming circuit and helping farmers to meet agri-environmental and climate-related commitments relating to 870 000 ha of land. The EMFF will make the Czech fisheries and aquaculture sector more sustainable by using more efficient and environmentally friendly production methods.

On transport, an allocation of EUR 6.2 billion will support sustainable transport and help to remove bottlenecks in key network infrastructures. This will also help to close gaps in the TEN-T networks and improve the interoperability of the rail network. 140 km of railway lines will be rebuilt or upgraded, contributing to a major shift to sustainable mobility. The improvement of infrastructure will make the country’s regions more accessible and result in more people using public transport in cities. The ESIF funding of EUR 200 million have been earmarked for upgrading and securing high-voltage transmission grids.

Almost EUR 1.4 billion will be dedicated to promoting sustainable and quality employment and supporting labour mobility, with a particular focus on disadvantaged groups such as low-skilled, older and young people (support for 585 000 people, 230 000 of whom are expected to gain a new qualification). The ESIF will also be spent on social inclusion and education, with allocations of EUR 2 billion each going towards helping people in difficulties and disadvantaged people, to improving the quality of social and health services and investing in education. On public services, 30 new mobile healthcare teams and 83 healthcare institutions will be set up and education will be supported at all levels, providing equal access to high-quality pre-school, elementary and secondary schools. ESIF will be used also to develop universities by improving their human resources management and facilitating access to tertiary education (869 students in new bachelor study programmes).

About EUR 180 million will be spent on making public administration and the justice system more effective and transparent, reducing administrative burdens, improving the skills of staff in public administration and making human resources management more efficient.

Use of financial instruments and territorial tools

Around EUR 763 million under cohesion policy programmes are planned to be channelled through financial instruments. This more than doubles the amounts in the previous programming period. The main areas of intervention are support for SMEs, transport infrastructure, investment in energy efficiency and, to a lesser extent, resource efficiency.

The regulatory requirement of 5 % of the ERDF to be spent on sustainable urban development will be met by investments from the Prague growth pole programme and seven integrated territorial investments (ITIs) in the largest metropolitan areas. The total ITI allocation is EUR 1 billion from the ERDF and EUR 223 million from the Cohesion fund.

The Community-led local development will be particularly important for the development of rural areas through the ‘multi-fund’ approach. This will involve funding from the ERDF (EUR 418 million), the EAFRD (EUR 115 million) and the ESF (EUR 64 million) which can be used in integrated, multi-sectoral local development strategies by local communities, organised in around 160 local action groups covering 55 % of the population.

Key information

2. Pre-conditions for effective and efficient use of ESIFs

Strategic frameworks for certain areas of investment (i.e. R&D, ICT) have not been completed. Action plans have been adopted for 11 thematic and three general ex ante conditionalities (EACs).

3. ESIF management

The Czech Republic has streamlined the way it manages the ESIF and centralised it more by reducing the number of programmes (from 17 in 2007-2013 to 8 cohesion policy programmes) and intermediate bodies. The Ministry for Regional Development is the national coordination authority. Additional coordination between funds is ensured through monitoring committees, coordinated calls for proposals and working groups. The 2014 Civil Service Act shall contribute to improvement of the administrative capacity.

4. Simplification for beneficiaries

The Czech Republic aims to reduce the administrative burden for beneficiaries and public administration by reducing the number of programmes and intermediate bodies, creating a new monitoring system for the entire implementation structure and establishing a single methodological environment for all programmes. Financial instruments and options such as advance payments and simplified costs will be used more widely. 

Source: COM(2015) 639 final, ANNEX II: Country fiches to the Communication from the Commission Investing in jobs and growth - maximising the contribution of European Structural and Investment Funds, Brussels, 14.12.2015