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NextGenerationEU: President von der Leyen in Czechia to present the Commission's assessment of the national recovery plan

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Today (19 July), Commission President Ursula von der Leyen (pictured) will be in Czechia to present the Commission's assessment on the national recovery and resilience plan under NextGenerationEU. On Monday morning, President von der Leyen will travel to Prague to meet Prime Minister Andrej Babiš, together with Vice-President Věra Jourová. She will also visit the Prague State Opera and the State Opera and National Museum, and discuss investments in energy efficiency. 

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NextGenerationEU: European Commission endorses Czechia's €7 billion recovery and resilience plan

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The European Commission has today (19 July) adopted a positive assessment of Czechia's recovery and resilience plan. This is an important step towards the EU disbursing €7 billion in grants under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Czechia's recovery and resilience plan. It will play a key role in helping Czechia emerge stronger from the COVID-19 pandemic.

The RRF is at the heart of NextGenerationEU which will provide €800bn (in current prices) to support investments and reforms across the EU. The Czech plan forms part of an unprecedented co-ordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Czechia's plan based on the criteria set out in the RRF Regulation. The Commission's analysis considered, in particular, whether the investments and reforms set out in Czechia's plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

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Securing Czechia's green and digital transition  

The Commission's assessment of Czechia's plan finds that it devotes 42% of its total allocation to measures that support climate objectives. The plan includes investments in renewable energy, the modernisation of district heating distribution networks, the replacement of coal-fired boilers and improving the energy efficiency of residential and public buildings. The plan also includes measures for nature protection and water management as well as investment in sustainable mobility.

The Commission's assessment of Czechia's plan finds that it devotes 22% of its total allocation to measures that support the digital transition. The plan provides for investments in digital infrastructure, the digitalization of public administration, including the areas of health, justice and the administration of construction permits. It promotes the digitalisation of businesses and digital projects in the cultural and creative sectors. The plan also includes measures to improve digital skills at all levels, as part of the education system and through dedicated upskilling and reskilling programmes.

Reinforcing Czechia's economic and social resilience

The Commission considers that Czechia's plan effectively addresses all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Czechia by the Council in the European Semester in 2019 and in 2020.

The plan provides for measures to tackle the need for investment in energy efficiency and renewable energy sources, sustainable transport and digital infrastructure. Several measures aim at addressing the need to foster digital skills, improve the quality and inclusiveness of education, and to increase the availability of childcare facilities. The plan also provides for improving the business environment, mainly through extensive e-government measures, a reform of the procedures of granting construction permits and anti-corruption measures. Challenges in the area of R&D shall be improved by investment geared at strengthening public-private cooperation and financial and non-financial support to innovative firms.

The plan represents a comprehensive and adequately balanced response to Czechia's economic and social situation, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.

Supporting flagship investments and reform projects

The Czech plan proposes projects in all seven European flagship areas. These are specific investment projects which address issues that are common to all member states in areas that create jobs and growth and are needed for the twin transition. For instance, Czechia has proposed €1.4bn to support the energy efficiency renovation of buildings and €500 million to boost digital skills through education and investments in upskilling and reskilling programmes for the entire labour force.  

The Commission's assessment finds that no measure included in the plan does any significant harm to the environment, in line with the requirements laid out in the RRF Regulation.

The arrangements proposed in the recovery and resilience plan in relation to control systems are adequate to prevent, detect and correct corruption, fraud and conflicts of interests relating to the use of funds. The arrangements are also expected to effectively avoid double funding under that Regulation and other Union programmes. These control systems are complemented by additional audit and control measures contained in the Commission's proposal for a Council Implementing Decision as milestones. These milestones must be fulfilled before Czechia presents its first payment request to the Commission.

President Ursula von der Leyen said: “Today, the European Commission has decided to give its green light to Czechia's recovery and resilience plan. This plan will play a crucial role in supporting a shift towards a greener and more digital future for Czechia. Measures that improve energy efficiency, digitalize public administration and deter the misuse of public funds are exactly in line with the objectives of NextGenerationEU. I also welcome the strong emphasis the plan places on strengthening the resilience of Czechia's health-care system to prepare it for future challenges. We will stand with you every step of the way to ensure that the plan is fully implemented.

Economy Commissioner Paolo Gentiloni said: “Czechia's recovery and resilience plan will provide a strong boost to the country's efforts to get back its feet after the economic shock caused the pandemic. The €7bn in NextGenerationEU funds that will flow to Czechia over the next five years will support a wide-ranging programme of reforms and investments to build a more sustainable and competitive economy. They include very sizeable investments in building renovation, clean energy and sustainable mobility, as well as measures to boost digital infrastructure and skills and the digitalisation of public services. The business environment will benefit from the promotion of e-government and anti-corruption measures. The plan will also support improvements in healthcare, including reinforced cancer prevention and rehabilitation care.”

Next steps

The Commission has today adopted a proposal for a Council Implementing Decision to provide €7bn in grants to Czechia under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission's proposal.

The Council's approval of the plan would allow for the disbursement of €910m to Czechia in pre-financing. This represents 13% of the total amount allocated to Czechia.

An Economy that Works for People Executive Vice President Valdis Dombrovskis said: “This plan will put Czechia on the path to recovery and boost its economic growth as Europe gears up for the green and digital transitions. Czechia intends to invest in renewable energy and sustainable transport, while improving the energy efficiency of buildings. It aims to roll out greater digital connectivity across the country, promote digital education and skills, and digitalize many of its public services. And it places a welcome focus on improving the business environment and justice system, backed by measures to fight corruption and promote e-government – all in a balanced response to the Czech economic and social situation. Once put properly into practice, this plan will help to put Czechia on a sound footing for the future.”

The Commission will authorize further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms. 

More information

Questions and answers: European Commission endorses Czechia's recovery and resilience plan

Recovery and Resilience Facility: Questions and answers

Factsheet on Czechia's recovery and resilience plan

Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Czechia

Annex to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Czechia

Staff-working document accompanying the proposal for a Council Implementing Decision

Recovery and Resilience Facility

Recovery and Resilience Facility Regulation

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Parliament vote on Andrej Babiš shows conflict of interest threat to EU decision making

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Today (9 June), MEPs will vote on the conflict of interest of Czech Prime Minister Andrej Babiš (pictured). The vote, which was called for by the Greens/EFA Group, calls for action from both the Commission and Council on the on-going conflict of interest surrounding the Czech Prime Minister and his Agrofert group of companies. The Commission recently released its first audit into PM Babiš' finances; a second audit looking into conflict around EU agricultural funds, is ongoing and has yet to be published.
Mikuláš Peksa, Pirate Party MEP and Greens/EFA Coordinator in the Budgetary Control Committee, said: "Agrofert is the biggest recipient of Common Agricultural Policy funds of any company in Europe and it's owned by a sitting EU Prime Minister, Andrej Babiš. This is not only a Czech problem, but a massive problem for the whole European Union. The Prime Minister's conflict of interest undermines EU decision making and weakens trust in our institutions. Today's vote is shows that the Parliament is acutely aware of the seriousness of this situation and the urgent need to build a systematic approach in both Czechia and Brussels to stop this kind of damaging situation from occurring again.

"It's very welcome that one of the first acts of the new European Public Prosecutor was to open an investigation into Prime Minister Babiš. Particularly, when in Czechia the public prosecutor was forced to resign under political pressure, in a worrying attack on the rule of law. It's good to see our Renew colleagues so wholeheartedly support the rule of law mechanism this week, but we hope that they also support this motion calling out the conflict of interest around their ally Babiš. Upholding ethics, trust and democratic principles must transcend party politics.

"Agrofert's recent PR push claims that this conflict of interest is a merely a 'political issue' but the reality is far more severe. It is a serious issue for all Czech and EU citizens when the rule of law is under threat; when a sitting member of the EU Council is negotiating funds can benefit him personally; and when taxpayers end up having to pay for this conflict. The Commission needs to finalise and publish the next audit into Babiš and outline how it intends to protect EU funds and the rule of law going forward."
Viola von Cramon MEP, Greens/EFA Coordinator in the Budgetary Control Committee, said:
 "Prime Minister Babiš is in conflict of interest and the Council is doing nothing to stop this from affecting decisions made at the highest level. In the current negotiations around the new Common Agricultural Policy, Mr Babiš argued against and opposes any substantial reform of the CAP - the capping of agricultural payments to large recipients included. The Czech Prime Minister must no longer be allowed to negotiate funds and policies that he could benefit from personally. EU Citizens need to be able to trust that their decision makers are acting in the interest of the people they are supposed to represent and not their own pockets. The Council must set out how it intends to protect the negotiations around the MFF and Next Generation EU from this ongoing conflict of interest.
 
"As we're witnessing in Hungary and Poland, democratic institutions are fragile and can be dismantled quickly. This cannot be allowed to happen in Czechia as well, where political interference and media ownership are creating a dangerous precedent. What is happening in Czechia today is akin to what we call 'state capture' in other countries. We must not let this affect EU decision making. There is ample scope for the Commission to look at using the new rule of law mechanism, based on threats to both European values and the EU's budget. Czech and European citizens need to know that the Commission is on their side and not powerful business elites."
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The debate ahead of this resolution took place last plenary session. The vote will take place around lunchtime, with results expected this evening. The vote is expected to pass with a majority.
The European Commission has clearly shown that the Prime Minister Babiš has breached conflict of interest rules over his control of trust funds linked to his Agrofert group of companies. All EU subsidies, as well as any funds that were awarded from the Czech national budget to his company Agrofert since February 2017 (when a local conflict of interest law came into force) are irregular and should be returned. The Greens/EFA Group were the first to call on the Commission to investigate this conflict back in September 2018.

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'Silliness': Czech president chides Russia for listing his nation as unfriendly

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Russia's decision to put the Czech Republic on a list of "unfriendly" states is silly, Czech President Milos Zeman (pictured) said on Sunday (16 May), following a chill in ties between the two countries as a result of an intelligence dispute.

Relations deteriorated sharply last month after the Czech government accused Russian military intelligence of causing a 2014 blast at an ammunition depot which killed two people, and expelled dozens of Russian diplomats from Prague.

Russia denied the allegations and retaliated by expelling Czech diplomats, and by putting the country on the "unfriendly" list on Friday alongside the United States, limiting the number of staff those governments can employ in Moscow. read more

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"It is always wrong to be an enemy," Zeman said in a live interview on radio Frekvence 1.

"It is silliness from the Russian side, because making enemies from former friends is a mistake. If there cannot be friendship, then there should at least be correct relations."

Zeman has for years favoured friendly relations with Russia, backed Russian participation in building a new nuclear power plant in his country and has also urged Czech authorities to buy the Russian Sputnik V COVID-19 vaccine.

He has also veered from the official government line by saying there were was another possible version of what caused the ammunition explosion, a view he reiterated on Sunday.

But the president, who does not have executive powers to direct government policy, also backed the government's expulsions of Russian diplomats.

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