Press Advisories

8. 2. 2013 20:59

Government succeeds in EU budget negotiations

The European Council has agreed to a new multiannual financial framework that meets most of the Czech Republic's requirements.

Prime Minister Petr Nečas at a press conference following a meeting of the European Council

The complicated negotiations in Brussels have had a favorable outcome for the Czech Republic. "We consider the result of the negotiations a success," stressed the prime minister in a briefing to the media on 8 February. The Czech government had sought a budget that would promote competitiveness, reflect modern trends, and be fair to all Member States.

Compared to past financial frameworks, the current budget deal reduces spending, which means that the Czech contribution to the EU's coffers will decrease as well. "It is as if our EU membership were free in one of the upcoming seven years," explained the premier.

Cohesion and Agriculture

The negotiations resulted in lower cuts in cohesion policy funding and, conversely, higher cutbacks in the agricultural sector, which was one of the Czech priorities. The increase in funds allocated to the cohesion policy translates into more than 20 billion euros in additional revenues for the Czech budget. The Czech Republic also helped push through VAT deductibility for cohesion policy projects. Another benefit is that funding from cohesion funds will be disbursed over a longer period of time (N+3 rule).

The Czech Republic will receive 5.4 billion euros in direct payments for agriculture and 1.9 billion for rural development. The government succeeded in its demands that any capping of direct payments to large national farms be voluntary.

Overall, the Czech Republic's status of net recipient has strengthened, as the difference between the country's contributions and receipts increased. According to the prime minister, "the rise in receipts is one the largest among EU Member States". The Czech Republic has now moved to the fourth place as regards national per capita allocation.

Increased Competitiveness and Efficiency

The budget's only problem from the Czech viewpoint is the fact that competitiveness as well as research and development remain relatively underfinanced. According to the government, this is an area where cuts do not make sense.

However, the main responsibility now lies with national administrations. "The biggest problem is not the overall amount of funds, but making sure that we use the money effectively and transparently at home," said Prime Minister Nečas, appealing to everyone's responsibility.

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