Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Czechia and delivering a Council opinion on the 2020 Convergence Programme of Czechia
Date: 2020-05-20
Institutions: European Commission, Secretariat-General
Subjects: Czechia, aid to undertakings, economic policy, economic recovery, economic reform, epidemic, health policy, infectious disease, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 20.5.2020  COM(2020) 503 final  Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Czechia and delivering a Council opinion on the 2020 Convergence Programme of Czechia  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2020 National Reform Programme of Czechia and delivering a Council opinion 
on the 2020 Convergence Programme of Czechia 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 9(2) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

On  17  December  2019,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Strategy,  marking  the  start  of  the  2020  European  Semester  for  economic  policy 
coordination. It took due account of the European Pillar of Social Rights, proclaimed 
by the European Parliament, the Council and the Commission on 17 November 2017. 
On  17  December  2019,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the 
Commission  also  adopted  the  Alert  Mechanism  Report,  in  which  it  did  not  identify 
Czechia as one of the Member States for which an in-depth review would be carried 
out. 
The 2020 country report for Czechia2 was published on 26 February 2020. It assessed 
Czechia’s  progress  in  addressing  the  country-specific  recommendations  adopted  by 
the Council on 9 July 20193, the follow-up given to the recommendations adopted in 
previous years and Czechia's progress towards its national Europe 2020 targets.  

(3) 

On 11 March 2020, the World Health Organization officially declared the COVID-19 
outbreak  a  global  pandemic.  It  is  a  severe  public  health  emergency  for  citizens, 

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OJ L 209, 2.8.1997, p. 1. 
SWD(2020) 502 final. 
OJ C 301, 5.9.2019, p. 117. 

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societies  and  economies.  It  is  putting  national  health  systems  under  severe  strain, 
disrupting  global  supply  chains,  causing  volatility  in  financial  markets,  triggering 
consumer  demand  shocks  and  having  negative  effects  across  various  sectors.  It  is 
threatening  people’s  jobs,  their  incomes  and  companies’  business.  It  has  delivered  a 
major  economic  shock  that  is  already  having  serious  repercussions  in  the  European 
Union. On 13 March 2020, the Commission adopted a Communication4 calling for a 
coordinated economic response to the crisis, involving all actors at national and Union 
level. 

Several  Member States have declared a state of  emergency or introduced emergency 
measures.  Any  emergency  measures  should  be  strictly  proportionate,  necessary, 
limited in time, and in line with European and international standards. They should be 
subject to democratic oversight and independent judicial review. 

On  20  March  2020,  the  Commission  adopted  a  Communication  on  the  activation  of 
the general escape clause of the Stability and Growth Pact5. The clause, as set out in 
Articles 5(1), 6(3), 9(1) and 10(3) of Regulation  (EC) 1466/97 and Articles 3(5) and 
5(2) of Regulation (EC) 1467/97, facilitates the coordination of budgetary policies in 
times  of  severe  economic  downturn.  In  its  Communication,  the  Commission  shared 
with the Council its view that, given the expected severe economic downturn resulting 
from  the COVID-19 outbreak, the  current  conditions  permit  activation of the clause. 
On  23  March  2020,  the  Ministers  of  Finance  of  the  Member  States  agreed  with  the 
assessment of the Commission. The activation of the general escape clause allows for 
a temporary departure from the adjustment path  towards the medium-term budgetary 
objective,  provided  that  this  does  not  endanger  fiscal  sustainability  in  the  medium 
term. For the corrective arm, the Council may also decide, on a recommendation from 
the Commission,  to  adopt  a revised  fiscal  trajectory. The  general  escape  clause does 
not suspend the procedures of the Stability and Growth Pact. It allows Member States 
to depart from the budgetary requirements that would normally apply while enabling 
the  Commission  and  the  Council  to  undertake  the  necessary  policy  coordination 
measures within the framework of the Pact. 

Continued  action  is  required  to  limit  and  control  the  spread  of  the  pandemic, 
strengthen  the  resilience  of  the  national  health  systems,  mitigate  the  socio-economic 
consequences through supportive measures for business and households and to ensure 
adequate  health  and  safety  conditions  at  the  workplace  with  a  view  to  resuming 
economic  activity.  The  Union  should  fully  use  the  various  tools  at  its  disposal  to 
support  Member  States’  efforts  in  those  areas.  In  parallel,  Member  States  and  the 
Union should work together to prepare the measures necessary to get back to a normal 
functioning of our societies and economies and to sustainable growth, integrating inter 
alia  the  green  transition  and  the  digital  transformation,  and  drawing  all  lessons  from 
the crisis. 

The  COVID-19  crisis  has  highlighted  the  flexibility  that  the  single  market  offers  to 
adapt  to  extraordinary  situations.  However,  in  order  to  ensure  a  swift  and  smooth 
transition to the recovery phase and the free movement of goods, services and workers, 
exceptional  measures that prevent  the single market  from  functioning  normally must 
be removed as soon as they are no longer indispensable. The current crisis has shown 
the need for crisis preparedness plans in the health sector, which include in particular 

(4) 

(5) 

(6) 

(7) 

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COM(2020) 112 final. 
COM(2020) 123 final. 

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(8) 

(9) 

improved  purchasing  strategies,  diversified  supply  chains  and  strategic  reserves  of 
essential  supplies.  They  are  key  elements  for  developing  broader  crisis  preparedness 
plans.  
The  Union  legislator  has  already  amended  the  relevant  legislative  frameworks6  to 
allow  Member  States  to  mobilise  all  unused  resources  from  the  European  Structural 
and  Investment  Funds  so  they  can  address  the  exceptional  effects  of  the  COVID-19 
pandemic. Those amendments will provide additional flexibility, as well as simplified 
and streamlined procedures. To alleviate cash flow pressures, Member States can also 
benefit  from  a  100%  co-financing  rate  from  the  Union  budget  in  the  2020-2021 
accounting year. Czechia is encouraged to make full use of those possibilities to help 
the individuals and sectors most affected by the challenges. 

The  socio-economic  consequences  of  the  pandemic  are  likely  to  be  unevenly 
distributed  across  regions  due  to  different  specialisation  patterns.  Therefore,  the 
current  situation  entails  a  substantial  risk  of  widening  regional  and  territorial 
disparities within Czechia, or creating new territorial disparities at sub-regional level, 
aggravating  also  the  already  observed  trend  of  widening  disparities  between  the 
Karlovarský and Ústecký regions and the rest of the country. Combined with the risk 
of  a  temporary  unravelling  of  the  convergence  process  between  Member  States,  the 
current situation calls for targeted policy responses. 

(10)  On 7 May 2020, Czechia submitted its 2020 National Reform Programme and, on 30 
April  2020,  its  2020  Convergence  Programme.  In  order  to  take  account  of  their 
interlinkages, the two programmes have been assessed at the same time. 

(11)  Czechia is currently in the preventive arm of the Stability and Growth Pact.  

(12) 

(13) 

In  its  2020  Convergence  Programme,  the  government  plans  the  headline  balance  to 
deteriorate  from  a  surplus  of  0,3%  of  gross  domestic  product  (GDP)  in  2019  to  a 
deficit of 5,1% of GDP in 2020. The deficit is projected to decline to 4,1% of GDP in 
2021.  After  decreasing  to  30,8%  of  GDP  in  2019,  the  general  government  debt-to-
GDP ratio is expected to increase to 37% in 2020 according to the 2020 Convergence 
Programme.  The  macroeconomic  and  fiscal  outlook  are  affected  by  high  uncertainty 
related to the COVID-19 pandemic. 

In response to the COVID-19 pandemic, and as part of a coordinated Union approach, 
Czechia has adopted budgetary measures to increase the capacity of its health system, 
contain  the  pandemic,  and  provide  relief  to  those  individuals  and  sectors  that  have 
been  particularly  affected.  According  to  the  2020  Convergence  Programme,  those 
budgetary measures amount  to  4% of GDP. The  measures  include  compensatory  tax 
bonuses and remission of social and health insurance obligations for six months for the 
self-employed (1% of GDP), a short-term working scheme (1% of GDP), remission of 
personal and corporate income tax advance payments due in June 2020 (0,8% of GDP) 
and  health-related  measures  (0,7%  of  GDP).  In  addition,  Czechia  has  announced 

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Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending 
Regulations  (EU)  No  1301/2013,  (EU)  No  1303/2013  and  (EU)  No  508/2014  as  regards  specific  measures  to 
mobilise  investments  in  the  healthcare  systems  of  Member  States  and  in  other  sectors  of  their  economies  in 
response to the COVID-19 outbreak (Coronavirus Response Investment Initiative) (OJ L 99, 31.3.2020, p. 5) and 
Regulation  (EU)  2020/558  of  the  European  Parliament  and  of  the  Council  of  23  April  2020  amending 
Regulations  (EU)  No  1301/2013  and  (EU)  No  1303/2013 as  regards  specific  measures  to  provide  exceptional 
flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak 
(OJ L 130, 24.4.2020, p. 1). 

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measures that, while not having an immediate direct budgetary impact, will contribute 
to support liquidity to businesses. They include mostly guarantee schemes to provide 
loans to SMEs and large enterprises. However, the Convergence Programme does not 
quantify the contingent liabilities linked to those new measures. Most of the measures 
underpinning  the  Programme  were  also  included  in  the  Commission  2020  spring 
forecast. A few measures which could not be quantified or were extended beyond the 
cut-off date could not be included. Overall, the measures taken by Czechia are in line 
with  the  guidelines  set  out  in  the  Commission  Communication  on  a  coordinated 
economic  response  to  the  COVID-19  outbreak.  The  full  implementation  of  those 
measures,  followed  by  a  refocusing  of  fiscal  policies  towards  achieving  prudent 
medium-term  fiscal  positions  when  economic  conditions  allow,  will  contribute  to 
preserving fiscal sustainability in the medium term. 

(14)  Based  on  the  Commission  2020  spring  forecast  under  unchanged  policies,  Czechia’s 
general government balance is forecast at -6,7% of GDP in 2020 and -4,0% in 2021. 
The general government debt ratio is projected to remain below 60% of GDP in 2020 
and 2021. 

(15)  On 20 May 2020, the Commission issued a report prepared in accordance with Article 
126(3)  of  the  Treaty  due  to  Czechia’s  planned  breach  of  the  3%  of  GDP  deficit 
threshold in 2020. Overall, the analysis suggests that the deficit criterion as defined in 
the Treaty and in Regulation (EC) No 1467/1997 is not fulfilled.   

(16)  Czechia declared a state of emergency between 12 March 2020 and 17 May 2020 to 
curb the impact of the COVID-19 pandemic, closing schools, restricting events and the 
operation of shops, and significantly limiting gathering of people. Between 15 March 
2020  and  17  May  2020  land  borders  were  also  partially  closed.  This  has  limited 
outgoing  Czech  workers  and  incoming  foreign  workers,  creating  local  labour 
bottlenecks  notably  in  manufacturing  and  seasonal  works,  and  impacted  essential 
supply  chains.  To  help  households  and  firms  through  the  crisis,  the  government 
announced  a  stimulus  package  involving  direct  support  measures  and  public 
guarantees. While this may provide temporary relief, the economy is still expected to 
be  badly  hit  in  2020,  as  external  demand  drops  and  lockdown  measures  disrupt 
economic  activity.  Real  GDP  is  expected  to  recover  gradually  in  2021,  but  it  is 
unlikely  to  rebound  to  2019  values  over  the  forecast  period.  The  impact  on  sectors 
such as transport, hospitality and tourism is expected to be significant. Unemployment 
will rise but  this  will  be cushioned by  a previously tight  labour market,  the stimulus 
package,  and  the  low  share  of  temporary  contracts.  To  ensure  liquidity  support,  the 
authorities  launched  a  number  of  schemes  of  state  guarantees  for  enterprises  of  all 
sizes. There is also a deferral of consumer loan and mortgage repayments for three or 
six months for households and firms affected by the crisis. In the process of designing 
and  implementing  these  measures  the  resilience  of  the  banking  sector  needs  to  be 
taken  into  account.  The  Czech  National  Bank  has  also  adopted  various  measures  to 
cushion the impact of the crisis on the financial sector. 

(17)  Early  COVID-19  health-related  mitigation  efforts  have  helped  to  slow  the  spread  of 
the  virus  in  Czechia.  Measures  have  been  taken  to  increase  the  supply  of  medical 
equipment and ensure the necessary infrastructure and thus prepare the health system 
to  cope  with  the  increased  demand.  The  health  status  of  the  Czech  population  had 
improved  significantly  in  recent  years,  getting  closer  to  the  EU  average.  However, 
there  are  substantial  regional  differences  in  life  expectancy,  partly  determined  by 
socio-economic and behavioural factors. While the overall level of self-reported unmet 
needs for medical  care is  among  the lowest  in  the EU,  regional disparities persist as 

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regards  the  distribution  of  health  care  resources  and  personnel,  who  have  faced 
increased strains. A substantial proportion of the health workforce is expected to retire 
in the coming years. To mitigate the impact of COVID-19, going forward will require  
improving  the  resilience  and  the  crisis  preparedness  of  the  health  system,  while 
supporting equal access to increased provision of primary care and integrated care to 
reduce  avoidable  hospitalisations.  This  may  also  improve  prevention  and  mitigate 
other  health  conditions.  E-health  solutions  are  still  limited  despite  the  existence  of  a 
2016-2020 National e-Health Strategy. 

(18)  Throughout 2019 and early 2020, Czechia’s labour market remained robust, with most 
indicators  showing  positive  outcomes.  The  employment  rate  continued  to  rise  and 
unemployment fell to its lowest rate ever. Yet, according to the Commission forecast, 
the  latter  is  expected  to  rise  to  5.0%  in  2020  and  slighlty  decrease  to  4.2%  in  2021. 
The government responded promptly to the COVID-19 outbreak by introducing many 
measures  to  protect  incomes  and  employment,  with  a  particular  focus  on  entreprises 
and  the  self-employed.  However,  some  vulnerable  groups  in  the  labour  market 
(workers in short-term contracts, those hired through temporary work agencies) are not 
fully  protected  by  the  proposed  mitigating  measures.  The  closure  of  childcare  and 
schools  during  the  lockdown  may  have  particularly  affected  women  with  significant 
caring responsibilites. Promoting investment in childcare and long-term care coupled 
with flexible working arrangements, such as teleworking, should smooth the transition 
from  the  crisis.  More  targeted  active  labour  market  policies  and  skills  provision,  in 
consultation  with  social  partners,  support  both  the  retention  of  employees  and  job 
transitions.  Outreach  actions  by  the  public  employment  services  can  also  facilitate  a 
successful re-entry in the labour market, in particular for vulnerable groups. Easier and 
faster  access  to  social  protection  would  help  avoid  poverty  traps  and  housing 
evictions.  Education  outcomes  continue  to  be  strongly  affected  by  socioeconomic 
inequalities and low investment. Ensuring equal access to inclusive quality education 
and training, including in the digital context, can help improve skills levels and expand 
digital  learning.  Fostering  digital  skills,  including  through  support  and  continuous 
training for teachers and trainers, is particularly crucial. Public spending per student at 
all  educational  levels  remains  comparatively  low.  Shortages  of  qualified  teachers 
indicate the need to raise the attractiveness of the profession, in particular for talented 
young people.  

(19)  Czechia  is  among  the  countries  that  could  be  particularly  affected  by  technological 
change  and  that  need  significant  investment  in  this  area.  Digital  transformation  will 
require support, including in industry and service sectors, through targeted investment 
in  smart  solutions  and  skills.  The  target  for  full  fixed  broadband  coverage  has  been 
reached  but  mobile  broadband  remains  relatively  expensive.  Delays  to  infrastructure 
development could particularly affect vulnerable groups and structurally weak regions 
at  greater  risk  of  being  isolated.  This  might  have  also  negative  consequences  in  the 
epidemic monitoring and control. To address connectivity needs, investment is needed 
in  very  high  capacity  networks,  fixed  and  mobile  and  appropriate  demand-side 
measures.  The  timely  assignment  of  5G  spectrum  under  predictable  conditions 
conducive  to  investment  will  be  essential  to  achieve  this.    Take-up  of  ultra-fast 
broadband services is curbed by low demand resulting from multiple variables such as 
subscription  price  as  well  as  population  purchasing  power,  age  and  education.  The 
authorities  are  committed  to  the  development  and  integration  of  new  digital 
technologies, but this is hampered by persistently low skills levels. The authorities are 
commited to encourage solutions based on artificial intelligence but Czechia still lags 
behind frontier Member States in terms of research and patent activities in this area. 

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(20)  To  foster  the  economic  recovery,  it  will  be  important  to  front-load  mature  public 
investment  projects  and  promote  private  investment,  including  through  relevant 
reforms.  Czechia’s  National  Energy  and  Climate  Plan  reports  important  investment 
needs  to  tackle  successfully  the  climate  and  energy  transition  and  move  towards 
climate neutrality. This is particularly the case for the promotion of renewable energy 
resources,  energy  efficiency,  infrastructure  and  parts  of  the  transmission  system. 
Climate change effects are already visible in the form of droughts and floods, causing 
significant  economic  losses.  Air  pollution  is  also  a  perennial  problem.  At  the  same 
time, pollution taxes are very low. Coal continues to dominate the power sector and it 
remains  an  important  driver  of  economic  activity  in  three  Czech  regions.  The 
constrained  development  capacity  of  project  promoters  and  the  limited  advisory 
support  provided  by  authorities  remain  a  significant  bottleneck  for  developping  a 
robust  pipeline  of  projects  implementing  the  twin  climate  and  digital  transitions  in 
these  regions.  Overall,  the  transition  away  from  coal  is  expected  to  have  significant 
socio-economic  consequences  and  there  appear  to  be  little  appetite  to  date  for 
investment  in  zero-  and  low-  greenhouse  gas  technologies.  The  production  of 
renewable energy is below the EU average. The sector lacks financial incentives and 
an  appropriate  legal  and  institutional  framework  to  support  its  further  development. 
There also seems to be a low awareness about the wider benefits of energy efficiency. 
The shift to electromobility has been rather slow and road transport is becoming one of 
the  main  consumers  of  energy.  Transport  taxes  are  low  and  not  based  on  the  CO2 
emissions. The electric vehicle charging infrastructure is still embryonic. Performance 
in  waste  management  remains  moderate  in  view  of  more  ambitious  targets.  A 
comprehensive strategy to develop  the circularity potential of the economy is missing. 
The  programming  of  the  Just  Transition  Fund  for  the  period  2021-2027  could  help 
Czechia to address some of the challenges posed by the transition to a climate neutral 
economy,  in  particular  in  the  territories  covered  by  Annex  D  to  the  country  report7. 
This would allow Czechia to make the best use of that fund. 

(21)  Access  to  conventional  finance  is  above  the  EU  average,  but  risk  financing  is  less 
developed.  Funding  for  high-risk  domestic  enterprises,  especially  at  seed  and  later 
development stage remains scarce. While some successful innovative initiatives have 
been  brought  to  market,  venture  and  equity  capital  financing  remain  very  low. 
Research  and  innovation  in  Czechia  are  hampered  by  a  need  for  systemic  reform. 
Although the steady growth of private investment in research and development (R&D) 
continues,  large,  mostly  foreign-owned  firms,  invest  noticeably  more  into  intangible 
assets like R&D, than small and medium domestic firms. The medium- and high-tech 
industry  suffers  from  skills  shortages  due  to  low  numbers  of  science,  technology, 
engineering and mathematics (STEM) graduates and inadequate graduate training. At 
the  same  time,  the  promotion  of  and  support  for  entrepreneurship  remains  low, 
hampering productivity growth. A high degree of fragmentation in the research sector 
results in R&D funding being spread too thinly. Public-private cooperation is hindered 
by  the  current  researchers’  career  assessment  practices.  Closer  cooperation  between 
academia and business, in particular via spin-offs, could accelerate technology transfer 
and the diffusion of innovation. 

(22)  The  COVID-19  lockdown  measures  have  put  a  strain  on  supply  chains  and  many 
businesses  have  been  unable  to  operate,  while  also  lacking  liquidity  reserves.  The 
automotive  and  the  services  sectors  have  been  affected  most.  Market  surveillance 

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SWD(2020) 502 final. 

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activities  are  spread  over  too  many  authorities  and  cooperation  and  coordination  are 
not optimal. Official schemes to provide firms with state guarantees have been quickly 
oversubscribed. There is scope for better coordination and faster processes to channel 
support to companies. Some stakeholders see the measures adopted by the authorities 
to ease the impact of the COVID-19 crisis as bureaucratic and  slow to roll-out in the 
real  economy.  There  is  scope  for  a  better  analysis  of  data  necessary  for  taking  fast, 
informed  and  optimal  decisions  on  targeted  economic  recovery  strategies  and 
measures. In general, fast-changing legislation and complex administrative procedures 
are  seen  by  the  business  sector  as  obstacles  to  investment.  Administrative  burden  is 
particularly problematic for start-ups in terms of licences and permits. The lengthy and 
heavy procedures to obtain a construction permit is an important barrier. The proposed 
new construction legislation is facing criticism. Czechia is among the least advanced 
Member States in terms of using digital public services. The number of e-government 
users  remains  far  below  the  EU  average.  The  country  is  implementing  its  e-
government  plan.  As  of  2020  the  country  has  a  new  ‘digital  constitution’  that  gives 
right,  as  of  2025  at  the  latest,  to  receive  nearly  all  public  services  electronically. 
Nonetheless, only around 10% of municipalities offer online solutions. The parliament 
is  currently  discussing  a  change  of  the  tax  code,  which  aims  at increasing  the 
digitalisation of the tax system as  the rate of electronic filing remains  rather low for 
certain taxes.  

to  address  medium- 

(23)  While the present recommendations focus on tackling the socio-economic impacts of 
the  pandemic  and  facilitating  the  economic  recovery,  the  2019  country-specific 
recommendations adopted by the Council on 9 July 2019 also covered reforms that are 
essential 
structural  challenges.  Those 
recommendations remain pertinent and will continue to be monitored throughout next 
year’s  European  Semester  annual  cycle.  That  also  applies  to  recommendations 
regarding investment-related economic policies. The latter recommendations should be 
taken  into  account  for  the  strategic  programming  of  cohesion  policy  funding  post-
2020, including for mitigating measures and exit strategies with regard to the current 
crisis. 

long-term 

to 

(24)  Czechia’s public sector performance and government effectiveness rank below the EU 
average. According to international indicators, it performs relatively well on access to 
government information in policymaking. It performs less well on the professionalism 
of  the  civil  service,  transparency  of  government  and  control  of  corruption.  Better 
strategic  planning  and  inter-ministerial  coordination,  and  less  fragmentation  in  local 
government would improve the efficiency of public administration. The procurement 
framework  has  improved  but  may  warrant  further  fine-tuning.  Despite  slight 
improvements,  corruption  remains  a  concern  for  businesses  and  may  further  hinder 
economic  activity.  Adoption  of  several  anti-corruption  measures  like  the  bill  on 
lobbying or on whistleblower protection is still pending. 

(25)  The  European  Semester  provides  the  framework  for  continuous  economic  and 
employment  policy  coordination  in  the  Union,  which  can  contribute  to  a  sustainable 
economy.  Member  States  have  taken  stock  of  progress  regarding United  Nations’ 
Sustainable  Development  Goals  (SDGs)  implementation  in  their  2020  National 
Reform  Programmes.  By  ensuring  the  full  implementation  of  the  recommendations 
below, Czechia will contribute to  the progress  towards the SDGs and to  the common 
effort of ensuring competitive sustainability in the Union.  

(26) 

In  the  context  of  the  2020  European  Semester,  the  Commission  has  carried  out  a 
comprehensive  analysis  of  Czechia’s  economic  policy  and  published  it  in  the  2020 

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country  report.  It  has  also  assessed  the  2020  Convergence  Programme  and  the  2020 
National  Reform  Programme  and  the  follow-up  given  to  the  recommendations 
addressed  to  Czechia  in  previous  years.  It  has  taken  into  account  not  only  their 
relevance  for  sustainable  fiscal  and  socioeconomic  policy  in  Czechia,  but  also  their 
compliance with Union rules and guidance, given the need to strengthen the Union’s 
overall  economic  governance  by  providing  Union-level  input  into  future  national 
decisions.  

(27) 

In  the  light  of  that  assessment,  the  Council  has  examined  the  2020  Convergence 
Programme and its opinion8 is reflected in particular in recommendation (1) below, 

HEREBY RECOMMENDS that Czechia take action in 2020 and 2021 to: 

1. 

2. 

3. 

In  line  with  the  general  escape  clause,  take  all  necessary  measures  to  effectively 
address the pandemic, sustain the economy and support the ensuing recovery. When 
economic  conditions  allow,  pursue  fiscal  policies aimed  at  achieving  prudent 
medium-term  fiscal  positions  and  ensuring  debt  sustainability, while  enhancing 
investment. Ensure the resilience of the health system, strengthen the availability of 
health workers, primary care and the integration of care, and deployment of e-health 
services. 

Support  employment  through  active  labour  market  policies,  the  provision  of  skills, 
including digital skills, and access to digital learning.  

Support  small  and  medium-sized  enterprises  by  making  greater  use  of  financial 
instruments  to  ensure  liquidity  support,  reducing  the  administrative  burden  and 
improving e-government. Front-load mature public investment projects and promote 
private  investment  to  foster  the  economic  recovery.  Focus  investment  on  the  green 
and  digital  transition,  in  particular  on  high-capacity  digital  infrastructure  and 
technologies,  clean  and  efficient  production  and  use  of  energy,  and  sustainable 
transport  infrastructure,  including  in  the  coal  regions.  Ensure  access  to  finance  for 
in  research  and 
innovative  firms  and 
development.  

improve  public-private  cooperation 

Done at Brussels, 

For the Council 
The President 

8 

Under Article 5(2) of Council Regulation (EC) No 1466/97. 

EN 

8 

  EN