NextGenerationEU: European Commission endorses Czechias €7 billion recovery and resilience plan

The RRF is at the heart of NextGenerationEU which will provide €800 billion (in current prices) to support investments and reforms across the EU. The Czech plan forms part of an unprecedented coordinated 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.

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 digitalisation 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 €1.4 billion 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.

Members of the College said:

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, digitalise 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 healthcare 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.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, 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 digitalise 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.”

Paolo Gentiloni, Commissioner for Economy, 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 €7 billion 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 €7 billion 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 €910 million to Czechia in pre-financing. This represents 13% of the total amount allocated to Czechia.

The Commission will authorise 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.