Road to recovery: Czech Republic’s post-Covid economic blueprint approved by Brussels

A major step forward has been taken on the Czech Republic’s road to economic recovery. The European Union has approved the Czech National Recovery Plan for the rebuilding of the economy after the Covid crisis, with the first money from the bloc’s recovery fund set to arrive this month.

Nonetheless, the European Commission warned that the Czech Republic’s issues with conflicts of interests will have to be resolved before regular payments from the fund can begin next year.

EU finance ministers approved the Czech National Recovery Plan, making the Czech Republic eligible to receive the first instalment of the CZK 180 billion allocated to the country by the bloc’s recovery fund. This first instalment will see up to 13 percent of the total sum distributed as an advance payment, with the rest of the allocated money to arrive in future instalments in the years to come.

At a previous joint press conference on the National Recovery Plan given with European Commission President Ursula von der Leyen, Prime Minister Andrej Babiš described the intentions behind the Recovery Plan.

“This money will be invested into the much-needed restart of our economy after the coronavirus pandemic as well as into more wide-ranging industrial modernization and the improvement of quality of life for our citizens,” he said.

The approval of the Czech plan makes it the sixteenth EU nation to have its economic recovery package given the green light by Brussels. The EU’s pandemic recovery fund is intended to boost Europe’s ailing economies by facilitating accelerated investment from a total combined fund of €750 billion. The fund is intended to provide the most support to the states which were hardest hit by the pandemic; Italy and Spain are the largest beneficiaries of the fund.

The fund is also seen by Brussels as an opportunity to encourage investments which combat climate change and promote modernization. EU member states are required to devote at least 37 percent of their allocated recovery funds to climate investments and reforms, and at least 20 percent to foster and hasten their transition to digital technologies.

The EU stated that the Czech Republic meets all the criteria to gain advance money for its chosen projects. But it warned that to get all the money for which it is eligible, the country will have to resolve alleged conflicts of interest involving high-ranking politicians. These include controversies surrounding Prime Minister Andrej Babiš, whose alleged conflicts of interest were recently affirmed by an EU audit. Brussels had earlier warned that if greater controls are not implemented to safeguard against conflicts of interest, subsidies from the EU may be suspended.

With pressure from Brussels growing over conflicts of interest, the approval of the National Recovery Plan will be a significant boost for the Czech government. With the country‘s economy so far recovering from the pandemic more slowly than many European allies, it is hoped the first instalment of EU money will kick-start investments, putting the country more firmly on the road to growth.