COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Czechia Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Czechia
Date: 2021-07-19
Institutions: European Commission, Secretariat-General
Subjects: Czechia, EU aid, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.7.2021  SWD(2021) 211 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Czechia Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Czechia {COM(2021) 431 final}  
 
 
Table of contents 

1.  EXECUTIVE SUMMARY 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2 

6 

2.1.  Macroeconomic outlook and developments since the 2020 country report ........................... 6 

2.2.  Challenges related to sustainable growth, cohesion, resilience, and policies for the next 
generation ................................................................................................................................................ 9 

2.3.  Challenges related to the green and digital transition ........................................................... 12 

3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

20 

3.1.  Overall strategy of the plan ...................................................................................................... 20 

3.2. 

Implementation aspects of the plan ......................................................................................... 22 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

27 

4.1.  Comprehensive and adequately balanced response to the economic and social situation . 27 

4.2.  Link with country-specific recommendations and the European Semester ........................ 35 

4.3.  Growth potential, job creation, economic, institutional, and social resilience, European 
Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion and 
convergence ........................................................................................................................................... 46 

4.4.  The principle of ‘do no significant harm’ ............................................................................... 54 

4.5.  Green transition ........................................................................................................................ 55 

4.6.  Digital transition ....................................................................................................................... 61 

4.7.  Lasting impact of the plan ........................................................................................................ 65 

4.8.  Milestones, targets, monitoring and implementation ............................................................ 67 

4.9.  Costing ....................................................................................................................................... 68 

4.10  Controls and audit .................................................................................................................... 71 

4.11  Coherence .................................................................................................................................. 76 

ANNEX: TAGGING / COSTING 

79 

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1.  EXECUTIVE SUMMARY 

The COVID-19 pandemic pushed Czechia’s economy into a deep recession in 2020, with 
GDP  declining  by  5.6%  and  the  unemployment  rate  rising  to  2.6%.  As  containment 
measures have been eased, a swift recovery is expected with 3.9% growth in 2021 and 4.5% 
growth  in  2022,  driven  by  both  domestic  spending  and  foreign  demand.  At  the  same  time, 
some worsening in unemployment figures is expected – from 2.6% in 2020 to 3.8% in 2021 
and  3.5%  in  2022,  with  the  most  negative  effects  on  vulnerable  groups.  Investments  and 
reforms financed from the Recovery and Resilience Facility (RRF) should help the recovery 
particularly from 2022 onwards. The government budget deficit is expected to deepen further 
to 8.5% in 2021 due to sustained fiscal support. 

Czechia has made fast progress in catching up with the EU average in many areas in the 
years  following  EU  accession,  but  population  ageing,  climate  change  and  the  digital 
transformation  pose  long-term  structural  challenges  to  the  country’s  economy  and 
society. Maintaining productivity growth, the backbone of Czechia’s economic convergence, 
will  require  sustained  structural  reforms  of  education  and  training  systems,  innovation 
ecosystem  and  governance,  targeted  investment  into  infrastructures,  and  research  and 
development  (R&D).  Moreover,  Czechia  is  not  yet  sufficiently  prepared  for  the  green  and 
digital  transitions.  Technological  changes,  such  as  the  automation  of  production  processes, 
are likely to have a significant impact on Czechia’s economy, given the exposure of its large 
manufacturing  sector,  including  automotive  production.  In  addition,  the  pension  and  the 
healthcare systems pose long-term sustainability risks to public finances and the economy. 

With a financial contribution of EUR 7.036bn, the implementation of the recovery and 
resilience  plan  (RRP)  is  expected  to  contribute  significantly  to  the  recovery,  economic 
growth, and job creation in Czechia. All six pillars of the RRF are covered. Even though 
the  plan  focuses  mostly  on  investments,  the  balance  of  the  response  appears  broadly 
transport,  energy,  building 
guaranteed.  Investments  are  geared 
renovation, digitalisation of public services and businesses, digital skills, childcare and social 
infrastructure  and  healthcare.  The  plan  also  includes  a  number  of  reforms  which  can  help 
advance policies towards more efficient public administration, stronger competitiveness and 
cohesion.  These  reforms  include  streamlining  and  full  digitalisation  of  procedures  for 
granting  construction  permits,  strengthening  cancer  screening  programmes,  digitalisation  of 
education, strengthening support of disadvantaged schools, legislative changes to focus active 
labour  market  policies  on  the  most  vulnerable  groups  or  long-term  care  reform  including  a 
deinstitutionalisation strategy. 

towards  sustainable 

The  Czech  plan  can  be  considered  a  comprehensive  and  adequate  response  to  the 
structural challenges identified in the country-specific recommendations (CSRs) of 2019 
and 2020. In the area of energy, Czechia plans to benefit from the RRF support to expand the 
use  of  renewable  energy  sources,  in  particular  photovoltaics,  improve  energy  efficiency  in 
residential and public buildings and support replacement of coal-fired boilers in households. 
Sustainable transport shall be promoted by investment in railway infrastructure, clean urban 
transport and promotion of the use of low-emission mobility. Recommendations in the area of 
R&D shall be addressed by investment geared at strengthening public-private cooperation as 
well  as  innovation  ecosystem  and  financial  and  non-financial  support  to  innovative  firms. 
Business environment should be improved by ample e-government measures, anti-corruption 

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reforms  and  notably  a  comprehensive  reform  of  the  procedure  for  granting  construction 
permits,  which  currently  represent  major  obstacles  to  investment  activity  in  Czechia.  Key 
measures  to  address  the  labour  market  recommendations  include  upskilling  and  reskilling 
programmes to adjust the labour force to the needs of the industrial and digital transition, and 
construction  of  new  childcare  facilities  for  children  below  three  years  to  foster  the  labour 
market participation of women. In the area of education, the plan aims at strengthening digital 
literacy  of  pupils  and  teachers,  providing  digital  equipment  to  schools,  while  ensuring 
inclusive  education  through  support  to  disadvantaged  schools  and  tutoring  of  pupils. 
Healthcare  recommendations  are  addressed  through  reinforced  cancer  prevention  and 
rehabilitation  care,  development  of  an  e-health  portal  aimed  at  fostering  integrated  care 
practices,  and  support  to  education  in  healthcare.  Further  complementary  actions  include 
measures to improve long-term care. 

The  implementation  of  the  plan  is  expected  to  contribute  significantly  to  economic 
growth  and  job  creation  in  Czechia,  while  strengthening  economic,  social  and 
institutional resilience. It is expected to provide a boost to aggregate demand in the short to 
medium term, improving the cyclical position of the Czech economy, and thereby mitigating 
the adverse economic effects of the COVID-19 crisis. The labour market is also expected to 
benefit by 2026, compared to the scenario with the absence of RRF support. Potential growth 
is expected to be boosted significantly and in a long-lasting manner, contributing to reach and 
progress  further on the  European Social Pillar Action Plan objectives  by  2030. This  should 
facilitate  the  country’s  transition  to  an  economic  model  more  focused  on  high-value-added 
activities, and which remains competitive and fair amid automation and digital change. The 
economic impact of the RRF could lead to an increase of Czechia’s GDP of between 0.8% 
and  1.2%  by  2026.  Around  three-quarters  of  the  expected  positive  impact  on  total  factor 
productivity  growth  stem  from  human  capital  policies  such  as  education  and  training, 
research, development, and innovation.  

With  41.6%  of  its  allocation  dedicated  to  climate-related  measures,  Czechia’s  RRP 
focuses  on  climate  mitigation,  adaptation,  protection  of  biodiversity  and  natural 
resources.  Investments  in  renewable  energy  sources,  modernisation  of  district  heating 
distribution  networks,  replacement  of  coal-fired  boilers  and  improving  energy  efficiency  of 
residential  and  public  buildings  are  expected  to  help  Czechia  achieve  its  2030  energy  and 
climate objectives and to support the transition to a circular economy. The implementation of 
investments in gas and biomass are subject to specific conditions and should be guided by the 
sustainability  criteria  for  renewable  energy  sources  in  line  with  the  Renewable  Energy 
Directive  to  be  adopted  by  Czechia.  Investments  in  sustainable  transport  are  expected  to 
improve railway and clean mobility infrastructure, including electro-mobility. This  is  set  to 
boost the overall mobility ecosystem, which is key for the Czech economy. All the measures 
planned to be financed by the RRF respect the ‘do no significant harm’ principle. 

With  22.1%  of  its  allocation  dedicated  to  digital  measures,  the  plan  is  designed  to 
contribute significantly to the digital transformation of the Czech economy and society. 
Development  of  digital  skills  is  one  of  the  objectives  of  the  proposed  education  reforms, 
complemented by digital upskilling opportunities for working age adults. Moreover, the plan 
puts  strong  emphasis  on  digitalisation  of  the  public  administration,  both  as  part  of  sectoral 
reforms of justice, construction permits and spatial planning, health care, as well as through 
horizontal  measures  aiming  at  increasing  the  quality  and  accessibility  of  eGovernment 

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solutions,  improving  the  efficiency  in  the  public  use  of  IT  resources,  fostering  the  “once-
only” principle through seamless data exchange and strengthening cybersecurity. A reform of 
the  governance  model  for  the  digital  economy,  together  with  investments  into  digital 
innovation  hubs  and  excellence  centres,  top  digital  technologies  and  digital  capabilities  of 
companies  (in  particular  SMEs),  together  with  investments  in  digital  transformation  of  the 
creative  and  cultural  sectors  should  help  the  development  of  a  digital  ecosystem. 
Digitalisation of the Czech economy should be supported by investment in very high capacity 
and 5G networks.  

Czechia’s RRP entails structural changes to institutions and policies and as such can be 
expected  to  achieve  a  lasting  impact.    Digitalisation  efforts  across  a  wide  range  of 
institutions  and  public  administration  are  expected  to  structurally  enhance  efficiency  and 
improve  the  quality  of  public  services.  Streamlining  and  digitalisation  of  the  procedure  for 
granting construction permits is expected to considerably improve the business environment 
and  unblock  construction  investment  in  many  areas.  Reforms  of  the  judiciary  governance 
framework  and  in  the  fight  against  corruption  are  set  to  have  a  lasting  impact.  Revision  of 
school  curricula is  expected to  generate  a qualitative shift  in  increasing digital       literacy. 
Important legislative reforms are also foreseen in the area of employment policy, childcare, 
long-term care and cultural and creative sectors. However, substantial structural reforms have 
been omitted in other policy areas, such as energy, digital infrastructure or R&D.  

Long-term  sustainability  of  public  finances  is  not  addressed  in  the  plan.  Given  the 
medium-  to  long-term  nature  of  the  challenge,  the  urgency  to  address  it  in  the  current 
economic  situation  is  less  evident  than  for  the  other  recommendations.  However,  Czechia 
will continue to face medium-term risks for fiscal sustainability of public finances in the long 
term,  mainly  due  to  the  costs  of  an  ageing  population.  Improving  long-term  fiscal 
sustainability of the pension and health-care systems thus remains an important challenge to 
address in the coming years. In addition, the plan considers regional disparities only to some 
extent.  

The plan proposes a comprehensive, clear and realistic set of milestones and targets in 
line with the objectives of each component.  The milestones and targets  are relevant, with 
their number generally ranging between two and three per measure. In the first  years of the 
plan implementation, milestones are the predominant monitoring device, often relating to the 
entry  into force of the legal framework, launch of a support programme  or the selection of 
projects.  During  the  later  years,  the  implementation  of  the  projects  is  typically  monitored 
using final output targets. The milestones and targets represent the key steps of the measures 
and  realistically  indicate  whether  the  measures  have  been  achieved.  Hence,  the  proposed 
milestones and targets can be considered in line with the long-term objectives of the plan. 

The  Technical  Support  Instrument  (TSI)  provides  expertise  in  building  capacities  to 
implement the plan in several areas covered by the plan such as digitalisation of government, 
smart and intelligent mobility, digital infrastructure and public infrastructure investments, as 
well as for the overall implementation of the plan.  

Overall,  costing  information  and  supporting  documents  are  provided  to  a  medium 
extent and provide a sufficient basis to assess the reasonability and plausibility of cost 
estimates. At the same time, for certain measures information and supporting documents or 
other comparable data have been provided to a limited extent, which hampers the degree to 

4 

 
 
which  these  specific  cost  estimates  can  be  considered  reasonable  and  plausible.  Overall, 
synergies  with  other  EU  funding  remain  to  be  explained.  For  various  measures,  these 
synergies need to be carefully monitored at a project level.  

Provided the milestones mentioned below are met before the first payment request, the 
arrangements proposed in the recovery and resilience plan and the additional measures 
contained  in  the  proposal  for  the  Council  implementing  decision  are  adequate  to 
prevent,  detect  and  correct  corruption,  fraud  and  conflicts  of  interests,  and  the 
arrangements are expected to effectively avoid double funding. The Commission will in 
its  risk  based  audits  pay  particular  attention  to  potential  conflict  of  interest  that  may  arise 
from  the  use  of  blind  trusts.  In  general,  identification  of  the  actors  responsible  for  controls 
and audit in Czechia is explained in a sufficient way and the independence and segregation of 
functions of the audit body clearly set out, including how it is enshrined in Czech legislation. 
The national arrangement for the implementation of the recovery and resilience plan are set 
out in Government resolution No 467 of 17 May 2021. The Managing Council of the national 
recovery  and  resilience  plan  is  the  highest  decision-making  and  approval  body  with  the 
responsibility for the overall coordination and monitoring of the recovery and resilience plan. 
The  Ministry  of  Industry  and  Trade,  as  the  responsible  authority  for  the  recovery  and 
resilience  plan  and  its  implementation,  is  responsible  for  coordination,  monitoring  and 
reporting of the recovery and resilience plan and is main point of contact for the Commission. 
Following recent audits on other EU programmes, there were identified serious deficiencies 
in the prevention, detection and correction of cases of conflict of interests at the Ministry of 
Industry and Trade. 

Dedicated milestones are included in the plan to ensure that these weaknesses have been 
addressed  before  the  first  payment  request.  Additional  milestones  to  be  fulfilled  by  the 
time  of  the  first  payment  request  are  set  requiring  (i)  a  compliance  review  of  the  national 
procedures  to  ensure  that  the  application  of  beneficial  ownership  in  the  context  of  the 
Facility’s internal control system is fully aligned with the definition of ‘beneficial owners’ as 
defined by Article 3, point 6 of Directive 2015/849, as amended by Directive 2018/843, (ii) 
the audit body to adopt an audit strategy ensuring the independent and effective audit of the 
RRF implementation, (iii) the RRF Managing Council to approve and implement procedures 
for the system to collect, store and process data in relation to all final recipients, including all 
beneficial owners as established by Article 3 of the Directive (EU) 2015/849 and procedures 
with the description how the records will be kept, and (iv) a repository system for monitoring 
the  implementation  of  the  RRF  and  for  collection  and  storage  of  all  the  data  referred  to  in 
Article 22(2)(d)(i) to (iii) of the RRF regulation shall be put in place and operational. 

The plan presents a vision of a modernised Czechia centred around six key policy areas, 
which  are  implemented  through  26  components.  Synergies  are  ensured  in  thematic 
components (e.g. education and training components), as well as horizontally across several 
components  (e.g.  when  applying  energy  efficiency  requirements  for  public  buildings 
renovations, digital transition of the public administration or the focus on healthcare in higher 
education, research and infrastructure investment). 

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Assessment and rating of the Czech RRP under the criteria laid down in Article 19(3) of 
the Recovery and Resilience Facility Regulation in accordance with its Annex V. 

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2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report   

Economic  growth  in  Czechia  reversed  sharply  in  2020  as  the  pandemic  brought 
disruptions,  particularly  affecting  the  country’s  large  export-oriented  manufacturing 
industry.  Real  GDP  declined  by  5.6%  in  2020.  The  recovery  is  expected  to  take  hold  in 
spring  2021  and  GDP  is  forecast  to  reach  its  pre-crisis  level  by  the  end  of  2021.  The 
macroeconomic and fiscal outlook continue to be affected by high uncertainty related to the 
COVID-19 pandemic and its economic consequences.  

The  COVID-19  pandemic  and  the  corresponding  containment  measures  resulted  in  a 
sharp fall in real output in 2020. The economic downturn was driven by a collapse in both 
foreign and domestic demand. Despite being supported by a resilient labour market, propped 
up  by  short-term  work  scheme  “Antivirus”  programme,  as  well  as  by  other  fiscal  support 
measures, household consumption declined strongly. While the support measures cushioned 
the  fall  in  retail  sales,  services,  especially  the  hospitality  sector,  suffered  larger  losses. 
Investment  and  construction  output  also  fell  sharply  due  to  increasing  uncertainty  about 
future developments. 

Private  consumption  is  likely  to  remain  the  main  driver  of  the  economic  recovery, 
reflecting  a  stable  labour  market,  pent-up  demand,  and  a  declining  trend  of  the  high 
savings  rate  of  households.  The  cuts  in  the  personal  income  tax,  with  effect  from  the 
beginning of 2021, will also be supportive for private consumption. Due to some remaining 
disruptions  in  supply  chains,  investment  is  expected  to  recover  at  a  slower  rate.  The  trade 
balance is likely to be slightly positive both in 2021 and 2022, also reflecting the recovery of 
Czechia’s  key  trading  partners.  However,  the  negative  impact  of  the  pandemic  on  client-
facing  services  such  as  hospitality,  tourism  and  transport  may  last  longer.  While  the 
unemployment rate in Czechia is expected to remain low, the expected increase in 2021 and 
2022 may have a negative impact especially on persons in vulnerable situations. According to 
the Commission’s Summer interim 2021 Forecast, economic activity is expected to return to 
its potential growth over the forecast horizon, with GDP increasing by 4.5% in 2022. HICP 
inflation is forecast to slow to 2.7% in 2021 and to 2.3% in 2022, towards the national central 
bank’s  monetary  policy  target  of  2%.  Price  pressures  are  expected  to  ease  due  to  anti-
inflationary demand effects  from  the second wave of the pandemic amid  subdued domestic 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
economic activity. At the same time, muted wage growth is forecast to dampen increases in 
domestic labour costs.  

Income inequality in Czechia remains low relative to the EU-27 average. The income of 
the richest 20% of the population was around 3.5 times higher than the income of the poorest 
20% in  2018, significantly lower than the ratio of 5 times in  the EU. This ratio, monitored 
through the Social Scoreboard indicator accompanying the European Pillar of Social Rights, 
has remained stable since 2005, due to a relatively even increase in real disposable household 
income  across  the  different  income  groups.  Low  inequality  is  due  to  market  incomes  (i.e. 
income received by households before taxes and social transfers) being distributed relatively 
equally.  The  gap  between  market  income  inequality  and  disposable  income  inequality  (i.e. 
after taxes and transfers) is similar to the EU average, suggesting that the Czech tax-benefit 
system is in line with the EU in terms of reducing inequality. 

Czechia  deployed  extensive  fiscal  stimulus  to  cushion  the  downturn  in  2020  and  to 
support the recovery in 2021. The general government balance ended 2020 with a deficit of 
6.2%  of  GDP.  The  result  was  driven  by  higher  expenditures  due  to  several  government 
support programmes, including short-time work schemes like the ‘Antivirus’ programme and 
the ‘Compensation bonus for self-employed’, subsidies schemes for companies, as well as by 
declining  corporate  income  tax  and  VAT  collection  linked  to  the  drop  in  private 
consumption. The emergency fiscal measures to cushion the downturn in 2020, together with 
the pre-existing tax-benefit system, have absorbed about one third of the shock on household 
market incomes in Czechia, with the largest part of the effect due to monetary compensation 
schemes.1  Even  with  a  partial  economic  recovery  in  2021  and  therefore  an  increase  in  tax 
revenues,  the  budget  is  likely  to  remain  stretched  in  2021  and  2022.  New  support 
programmes  for  companies  affected  by  the  lockdown  (‘COVID-2021’  and  ‘COVID-
Uncovered costs’), as well as a cut in personal income tax could lead to a budget deficit of 
8.5%  in  2021,  according  to  the  Commission’s  Spring  2021  Forecast.  While  the  pace  of 
growth in public debt in 2020-2022 is above the EU average, the size of public debt is still 
low compared to other Member States. The public debt-to-GDP ratio, which stood at 38.1% 
in 2020, is forecast to rise to 44.3% in 2021 and 47.1% in 2022. 

The  banking  sector  before  the  crisis  was  stable,  profitable,  well  capitalised,  and  not 
directly  exposed  to  sovereign  debt.  While  banks’  profitability  might  be  impacted  by  the 
crisis, risks seem to be contained so far. The decline in economic activity and the associated 
deterioration in the financial situation of many households and companies might bring about 
an increase in the volume of non-performing loans, although for the moment the ratio of non-
performing loans with deferred instalments is lower than expected. A reduction in the quality 

1  See  Christl,  M,  De  Poli,  S.,  Figari,  F.,  Hufkens,  T.,  Leventi,  C.,  Papini,  A.  and  Tumino,  A.  (2021)  “The 
cushioning effect of fiscal policy in the EU during the COVID-19 pandemic”, JRC Working Papers on Taxation 
and Structural Reforms, 02/2021 (forthcoming); and Almeida, V., Barrios, S., Christl, M., De Poli, S., Tumino, 
A., Van der Wielen, W. (2020): ‘Households´ income and the cushioning effect of fiscal policy measures during 
the  Great  Lockdown’,  JRC  Working  Paper  on  Taxation  and  Structural  Reforms,  06/2020,  available  at 
https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf 

7 

 
 
                                                           
 
of  banks’  loan  portfolios  should  not  jeopardize  financial  stability.  Furthermore,  the  Czech 
central bank has already announced an increase in the countercyclical capital buffer, in force 
from July 2022. Around 90% of the banking system assets are foreign controlled (mostly of 
the EU origin). Current household debt is mostly in CZK, whereas one third of the corporate 
debt is in EUR. The central bank increased monitoring of subsidiaries of foreign banks and 
the  use  of  prudential  measures.  Monetary  conditions  are  accommodative.  The  insolvency 
framework  is  more  robust  compared  to  regional  peers,  but  pre-insolvency  regimes  are 
missing.  

The macroeconomic scenario underlying the RRP is based on plausible macroeconomic 
assumptions. The macroeconomic scenario is in line with the latest forecast of the Ministry 
of Finance (MoF), which is also the basis for Czechia’s 2021 Convergence Programme. The 
convergence programme contains forecast for macroeconomic and fiscal fundamentals up to 
2024.  Its  forecast  was  assessed  by  the  Budget  Forecasts  Committee,  which  considered  it 
realistic in terms of likelihood of compliance, in line with the law on budgetary responsibility 
rules.  For  the  longer  forecast  horizon  for  Czechia’s  RRP,  necessary  assumptions  on 
economic,  price  and  employment  developments  were  adopted.  Given  the  usual  absence  of 
cyclical fluctuations in the long-term, a constant growth rate was chosen for 2025 and 2026. 

Economic  growth  projections  are  slightly  more  pessimistic  both  for  2021  and  2022, 
when compared to the Commission’s Summer interim 2021 Forecast. This is mainly due 
to assuming a milder recovery in private consumption. The expected development of both the 
Czech  labour  market  outcomes  and  price  development  are  broadly  aligned  with  the 
Commission’s view. According to the Czech RRP, economic growth is expected to moderate 
towards 2% in 2023 and beyond, driven by both domestic and foreign demand. According to 
the plan and in line with the Commission’s forecast, inflation is set to remain contained but 
slightly above the central bank’s inflation target. The MoF forecasts the general government 
deficit  amounting  to  8.8%  of  GDP  in  2021  and  5.9%  of  GDP  in  2022.  In  comparison,  the 
Commission Spring 2021 Forecast envisages a budget deficit of 8.5% of GDP for 2021 and 
5.4% for 2022. 

Table 1: Comparison of macroeconomic developments and forecasts 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2019 

COM  RRP  COM  RRP  COM  RRP  RRP  RRP  RRP  RRP 

2.3 

-5.6 

-5.6 

3.9* 

3.1 

4.5* 

3.7 

1.9 

2.1 

2.0 

2.0 

2.6 

3.3 

3.3 

2.7* 

2.4 

2.3* 

2.3 

Real GDP (% 
change) 

HICP 
inflation (% 
change) 

GDP deflator 

3.9 

4.2 

4.2 

2 

1.8 

2.1 

1.7 

2.0 

1.9 

2.0 

2.0 

Employment 
(% change) 

0.3 

-1.5 

-1.5 

-1.5 

-1.1 

0.3 

0.1 

0.3 

0.1 

0 

0 

8 

 
 
  
  
  
  
  
  
Unemployme
nt rate (%) 

General 
government 
balance (% of 
GDP) 

Government 
debt (% of 
GDP) 

2.0 

2.6 

2.6 

3.8 

3.6 

3.5 

3.7 

0.3 

-6.2 

-6.2 

-8.5 

-8.8 

-5.4 

-5.9 

30.3 

38.1 

38.1 

44.3 

44.8 

47.1 

48.4 

Source: Commission’s Summer interim Forecast (2021) (COM*), Commission’s Spring Forecast (2021) 
(COM), Czechia’s Recovery and resilience plan (RRP) 

2.2. Challenges  related  to  sustainable  growth,  cohesion,  resilience,  and  policies  for 

the next generation  

Smart, sustainable and inclusive growth 

The recovery of the Czech economy will depend on its capacity to diversify and lift the 
value  added  of  its  products  and  services.  The  growth  model  driving  Czechia’s  economic 
performance over the past ten years has been based on Foreign Direct Investment (FDI) and 
to  core  EU  markets,  wage 
trade  openness,  supported  by  geographical  proximity 
competitiveness, and the inflow of EU funds. These factors have been boosting productivity 
and employment growth. However, the relatively low unemployment levels and bottlenecks 
in the labour market pushed wages upwards over the past years. Overall competitiveness and 
labour productivity have been reduced. Although the demand for labour has decreased in the 
pandemic, the structural issues remain, including those related to labour and skills shortages. 
In addition, a gap remains between large and small and between foreign-owned and domestic 
enterprises  in  terms  of  R&D  expenditures  and  international  competitiveness.  Considering 
demographic  trends,  it  will  remain  crucial  to  increase  labour  productivity,  benefitting  from 
automation, robotics, and digital technologies. As the Czech companies are highly integrated 
in global supply chains, moving to positions with higher added value is necessary for Czechia 
to remain competitive in comparison with its regional peers. 

Czechia’s  future  growth  also  depends  on  the  ability  to  remain  attractive  for 
investments. Removing barriers to investments to support local entrepreneurship and SMEs, 
especially  in  R&D  intensive  industries,  will  be  key.  This  includes  barriers  of  (i) 
administrative  nature  (such  as  lengthy  and  heavy  administrative  procedures,  issues  pending 
regarding public procurement, the lack of predictability in business regulation, administrative 
and  regulatory  burdens,  and  unclear  landscape  of  business  support  schemes),  (ii)  physical 
nature  (lacking  transport  infrastructure)  as  well  as  (iii)  labour  and  skills  shortages 
mismatches,  notably  due  to  the  too  low  number  of  graduates  in  science,  technology, 
engineering  and  mathematics  (STEM)  disciplines  and  graduates’  inadequate  training. 
Developing further the local system of entrepreneurship also needs to be supported by more 

9 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
advanced  capital  markets,  as  currently  venture  capital  remains  very  limited  and  equity 
issuance  is  negligible,  especially  for  pre-seed  and  seed  high-risk  enterprises.  This  is  a 
particular concern in a recovery context, when fast growing enterprises, which tend to need 
equity finance more than others, carry a premium.2  

The modest performance of the public science base is a key bottleneck for the country. 
Despite  an  adequate  level  of  public  R&D  funding,  the  scientific  and  technological 
performance  remains  modest.  A  key  factor  for  inefficiencies  is  the  high  degree  of 
fragmentation  of  the  public  research  sector.  It  is  essential  to  underpin  the  public  R&D 
investment  by  structural  and  comprehensive  reforms,  such  as  setting  up  an  efficient 
governance and coordination mechanism for research and innovation policy at national level, 
tackling  the  fragmentation  of  the  public  research  sector  and  simplifying  the  regulatory 
framework for public-private cooperation and commercialisation of research results. 

Given  the  importance  of  the  automotive  industry  for  the  Czech  economy,  the  highly 
cyclical nature of this sector, its focus on exports and its dependence on supply chains 
pose a risk. In the medium to long term, risks are compounded by structural changes that the 
automotive  industry  will  undergo,  as  emission  standards  are  progressively  tightened.  The 
switch  to  alternative  fuelled  vehicles  will  require  significant  investment  in  technological 
development,  in  machinery  and  equipment,  and  in  infrastructure,  with  possible  impacts  on 
employment, supply-demand relations, and energy prices. 

Social and territorial cohesion 

Czechia performs better than the EU average on the overall poverty or social exclusion 
indicators  and  the living  standards  are  increasing,  although disparities  remain  among 
groups  of  population  and  regions.  Despite  some  improvement  in  the  demand  for  low-
skilled labour, the employment rate of the low skilled is still considerably lagging behind that 
of  the  medium  and  high  skilled  and  there  is  also  further  scope  to  improve  the  employment 
outcomes of people with  disabilities. Early school-leaving is  high in  socially disadvantaged 
families. Furthermore, gender inequalities in pay and employment remain high (see Box 3). 
Women aged between 25 and 49 with small children continue to be underrepresented in the 
labour  market.  The  negative  impact  of  parenthood  on  female  labour  market  participation 
continues to be high, holding women back from  advancing their careers. More reforms  and 
investments  are  needed  in  terms  of  childcare,  long-term  care  integrating  social  and  health 
care,  development  of  equitable  education  and  training  system,  as  well  as  in  tackling  the 
challenges associated with ageing, technological change, and environmental sustainability. 

Regional differences in socio-economic indicators persist and new challenges emerge. In 
particular,  Northwest  Bohemia  and  Moravia-Silesia,  regions  historically  dependent  on  coal 
mining,  lag  behind  the  rest  of  the  country  in  terms  of  productivity,  unemployment  rate, 
educational  outcomes,  share  of  people  at  risk  of  poverty,  life  expectancy,  as  well  as  air 

2 See the CZ factsheet in: Benedetti Fasil, C., Del Rio, J.C., Domnick, C., Fako, P., Flachenecker, F., Gavigan, 
J., Janiri, M., Stamenov, B. and Testa, G., High Growth Enterprises in the COVID-19 Crisis Context, EUR 
30686 EN, Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-37269-1 (online), 
doi:10.2760/63402 (online), JRC124469 

10 

 
 
                                                           
quality. These regions also suffer from a persistent population outflow and high school drop-
out rates. The situation is particularly unfavourable in Northwest  Bohemia where the living 
standard  have  diverged  from  the  rest  of  the  country  over  the  last  two  decades.  Conversely, 
richer  regions  achieve  much  better  educational  outcomes  and  have  a  greater  innovation 
capacity, making them more attractive for private investment. 

Health, and economic, social and institutional resilience 

Czechia’s  public  sector  performance  and  government  effectiveness  need  to  be  further 
improved. Digitalisation of public services and reduced administrative burden at all levels of 
government remain key priorities. Czechia needs to increase the take-up of the digital public 
services and speed up the implementation of the national eGovernment strategy. A reform of 
the procedures to grant construction permits is necessary to shorten the length of the issuance 
of the construction permits while at the same time proper balancing of public interests needs 
to  be  safeguarded.  Several  important  reforms  of  the  Czech  justice  system  are  currently 
ongoing  or  in  preparation,  including  on  the  selection  procedure  for  judges,  disciplinary 
regime for judges and prosecutors and introduction of the e-file. These reforms could increase 
the efficiency, independence and accessibility of the judiciary. Additional improvements can 
be  brought  also  to  public  finances.  Periodic  spending  reviews  can  help  align  the  public 
expenditures  with  the  new  emerging  economic  priorities  while  the  use  of  green  budgeting 
would  help  manage  the  challenges  of  green  transition.  The  long-term  sustainability  of  the 
public finances will also need to  be addressed especially in  terms of cost of ageing.  In this 
respect, the latest measures focused more on pension adequacy while the retirement age was 
capped at 65 and it has not been increased in line with the recommendations from the latest 
report on the pension system published by the government.  

In the context of the pandemic, a special focus is warranted on the performance of the 
health  system  and  its  sustainability.  Population  health  outcomes  are  lagging  but  have 
positively  converged  toward  the  rest  of  the  EU  in  the  last  decade.  There  are  differences  in 
access to healthcare. While overall self-reported unmet needs are one of the lowest in the EU 
(Box 3), there are regional disparities regarding the distribution of health care resources and 
health care personnel. Travelling distances appear to pose a moderately elevated challenge in 
accessing  healthcare  compared  to  the  rest  of  the  EU.  In  the  medium  term,  Czechia  could 
benefit  from  pressing  ahead  with  the  reform  of  primary  care,  implementing  the  new  health 
strategy running until 2030, investing in care coordination and reduced hospitalisations, and 
further  developments  in  e-health,  including  the  enhancement  of  the  digital  competences  of 
general practitioners and interconnection of monitoring and tracing systems.  

Policies for the next generation, children and youth, including education and skills   

Policies for the next generation, children, and youth, including education  and training 
providing  relevant  skills  need  to  be  implemented  to  address  future  labour  shortages. 
Preparing  the  workforce  for  progressive  industrial  automation  and  digitalisation  of  work 
patterns  is  a  key  element  to  achieve  higher  growth  prospects,  moving  Czechia  up  in  the 
global value chain. This will require investment in a broad set of skills, not only digital and 
technical  but  also  transversal  and  non-cognitive  ones.  Efforts  should  be  strengthened  with 
respect  to  adult  learning  where  Czechia  lags  behind  in  terms  of  participation,  institutional 
infrastructure, and funding.  Inclusive quality  education and training, as of an  early  age and 
throughout  people’s  careers,  and  enhanced  education  are  essential  to  recap  all  the 

11 

 
 
transformative power of digital technologies and contribute to the European skills agenda, the 
European Pillar of Social Rights, and the European Education Area. However, participation 
in early childhood education care is low, in particular for under 3-year-olds (6.3% against the 
EU average of 35.3% in 2019). Moreover, educational outcomes are strongly influenced by 
socio-economic background and inter-school differences are pronounced. To date, education 
outcomes  for  many  Roma  continue  to  be  a  cause  for  serious  policy  concern.  The 
attractiveness of the teaching profession has been limited in Czechia, due to low salaries and 
low  prestige.  The  teaching  profession  needs  to  be  promoted  through  better  career 
development  opportunities  and  trainings.  Empowering  teachers  with  digital  skills  would 
provide support in changes brought by future digital transition. 

2.3. Challenges related to the green and digital transition  

An overarching objective of the RRF is to support the twin transition.3 Czechia is among 
the less advanced Member States in achieving carbon neutrality and in reaping the benefits of 
the  digital  transition,  as  measured  in  the  Commission’s  assessment  of  Czechia’s  2020 
National Energy and Climate Plan (NECP)4 and the 2020 Digital Economy and Society Index 
(DESI). To achieve climate neutrality and successful digitisation of the society and economy, 
Czechia  will  need  to  increase  its  ambitions.  This  section  recalls  where  Czechia  stands  in 
achieving targets related to the green and digital transitions. 

Green dimension  

The  plan  should  contribute  to  the  green  transition  and  at  least  37%  of  the  financial 
allocation  needs  to  contribute  to  climate  objectives.  The  measures  in  the  plan  shall 
contribute  to  achieving  the  2050  climate  neutrality  objective,  and  the  2030  energy  and 
climate targets, while considering Czechia’s national energy and climate plan. The measures 
should  also  contribute  to  meeting  environmental  targets  for  waste,  water,  pollution  control, 
sustainable mobility, biodiversity protection and restoration, marine and water resources, and 
support  the  transition  to  sustainable  food  systems  as  well  as  to  a  circular  economy  as 
appropriate, while ensuring that nobody is left behind. 

Although Czechia made progress in decoupling environmental pressures from economic 
activity and improving environmental infrastructure, it still has a mixed performance in 
implementing  environmental  policies  effectively.  Further  progress  towards  sustainable 

3 The Regulation stipulates that the Facility should support the green transition towards achieving the Union’s 
2030 climate targets and complying with the objective of EU climate neutrality by 2050. It should also support 
the digital transition [according to the Council mandate]. In this regard, the Regulation sets a binding target that 
the measures in the plan shall contribute for an amount of at least 37% of the plan’s total allocation to contribute 
to  climate  mainstreaming.  It  also  sets  a  binding  target  that  the  measures  in  the  plan  shall  contribute  for  an 
amount of at least 20% of the total allocation to contribute to the digital transition or the challenges resulting 
from it. 
4 Prepared based on Regulation 2018/1999 of the European Parliament and the Council on the Governance of 
the Energy Union and Climate Action. 
Economidou,  M.,  Ringel,  M.,  Valentova,  M.,  Zancanella,  P., Tsemekidi  Tzeiranak,  S.,  Zangheri,  P.,  Paci,  D., 
Ribeiro Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the 
EU Energy Union, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-
92-76-27013-3, doi:10.2760/678371, JRC122862. 

12 

 
 
                                                           
development will require implementation of a package of “green reforms” to phase out a low-
carbon economy, ensuring coherence between environmental and energy policies, and pricing 
carbon5.  There  are  currently  no  new  carbon  and  energy  tax  measures  in  place  that  would 
effectively  support  the  climate  transition.  In  terms  of  key  environmental  challenges,  the  air 
quality,  circular  economy,  and  water  management  sector  (addressing  floods  and  droughts) 
stand-out as major environmental investment needs and form the elements of a green-reform 
package (including a fiscal element).  

5 Tsemekidi-Tzeiranaki,  S., Paci, D., Cuniberti, B., Economidou, M. and Bertoldi,  P., Analysis of the  Annual 
Reports  2020  under  the  Energy  Efficiency  Directive,  EUR  30517  EN,  Publications  Office  of  the  European 
Union, Luxembourg, 2020, ISBN 978-92-76-27416-2, doi:10.2760/180952, JRC122742. 

13 

 
 
 
 
                                                           
GHG emissions 

Czechia has some of the highest greenhouse gas (GHG) emissions per capita in the EU. 
This is mostly due to significant reliance on coal, a highly industrialised economy, extensive 
transport  sector  and  rather  inefficient  use  of  energy.  Compared  to  2005,  GHG  emissions 
declined  by  4%  in  2018.  Additional  effort  is,  however,  needed  to  meet  the  2030  emission 
reduction commitments. The main objective of Czechia is to reduce the total GHG emissions 
by 14% by 2030 compared to 2005 under the Effort Sharing Regulation.  

Greenhouse  gas  emissions  could  be  significantly  reduced  by  investing  in  renewable 
energy and local energy community networks. This would also reduce air pollution which 
is above the EU average and contributes to premature deaths in the most polluted areas. The 
concentrations  of  air  pollutants  in  certain  zones,  notably  in  urban  areas,  are  continuously 
above  the  limit  values,  including  the  daily  limit  values  for  inhalable  particles  matter.  The 
level  of  air  pollution  is  influenced  mainly  by  the  combustion  of  solid  fuels  in  household 
heating facilities and traffic. 

Regarding mobility, a further upgrading of key sections of Czechia’s infrastructure can 
boost the shift towards a more climate-friendly and sustainable mode of transport and 
support  the  modal  shift.  A  modernised  passenger  rolling  stock  can  increase  the 
attractiveness  and  the  service  quality  for  citizens.  At  local  and  urban  level,  a  modern  and 
attractive  public  transport  should  help  to  reduce  emissions  and  improve  the  quality  of  life. 
The existing investment gaps are mostly linked to the infrastructure quality and standards, in 
particular  the  infrastructure  requirements  defined  in  TEN-T  Regulation.  Further  investment 
needs to be urgently provided to active mobility infrastructure, such as bike lanes, and taking 
steps to increase safety of vulnerable road users on the existing infrastructure. There is also a 
high need for clearer strategy and investment to move to zero/low emission vehicles both in 
terms  of  increase  in  the  number  of  electric  vehicles  and  publicly  available  recharging 
infrastructure.  The  shift  towards  low-emission  road  transport  should  be  supported  by 
appropriate carbon tax measures and regulatory arrangements.  

Energy efficiency 

The energy intensity of the Czech economy remains one of the highest in the EU,6 more 
than double the EU average. There is a significant potential to improve energy performance 
of the public, commercial and residential building sector. Further investments are required in 
particular  for  building  renovation,  including  thermal  retrofitting,  as  well  as  for  the 
improvement  of  thermal  performance  of  district  heating  networks.  Progress  towards  better 
energy  performance  of  buildings  is  slower  than  in  the  rest  of  the  EU.  7  Czech  authorities 

6  The  level  of  primary  energy  consumption  in  Czech  Republic  reached  39.9  Mtoe  in  2016  which  is  steadily 
around the 2020 target. The final energy consumption in 2015 reached 24.2 Mtoe. 
7 For the assessment of the Czech long term buildings renovation strategies see: Castellazzi L, Zangheri P and 
Paci  D.  Synthesis  Report  on  the  assessment  of  Member  States`  building  renovation  strategies.  EUR  27722. 
Luxembourg (Luxembourg): Publications Office of the European Union; 2016. JRC97754; and Castellazzi L., 
Zangheri,  P.,  Paci,  D.,  Economidou,  M.,  Labanca,  N.,  Ribeiro  Serrenho,  T.,  Zancanella,  P.  and  Broc,  J., 
Assessment of second long-term renovation strategies under the Energy Efficiency Directive, EUR 29605 EN, 

14 

 
 
                                                           
 
 
would  benefit  from  increasing  specific  expertise  and  ability  to  prepare  and  implement 
complex renovation projects. General awareness of the benefits of energy efficiency shall be 
targeted. Support for project preparation, flexibility of financing in particular combination of 
various  financial  instruments  and  promoting  energy  efficiency  and  renewable  energy 
financing  with  the  help  of  financial  institutions  would  increase  the  interest  into  energy 
efficiency  projects.  Investing  in  energy  efficiency  improvements  in  households  (building 
renovation  and  optimising  their  lifecycle  performance  in  line  with  circular  economy 
principles,  including  thermal  retrofitting),  private  sector  (particularly  SMEs)  and  public 
sector  would  reduce  energy  intensity,  prolong  life  expectancy  of  built  assets,  and  increase 
Czechia’s cost competitiveness. 

Renewable share  

Renewables in gross final energy consumption have been stagnating for many years as a 
large portion of electricity in Czechia is still generated from coal and gas. The share of 
renewables increased to 16.2% in 2019 (compared to the 13% target in 2020). Czechia has set 
a  20.8%  share  of  energy  from  renewable  sources  in  gross  final  consumption  of  energy  in 
2030 as a renewable      energy contribution to the EU renewable energy target for 2030. This 
level of ambition is below the share of 23% in 2030 that results from the formula contained in 
Annex II of the Energy Union Governance Regulation.8 The increase of variable renewables 
foreseen by 2030 is insignificant and Czechia is not planning measures for the integration of 
large amounts  of renewable electricity, even though the latter  could  partly replace coal  and 
gas in a cost-effective way. At the same time, the support of biomass-based renewables is not 
sustainable.  The  support  of  bioenergy,  which  implies  increased  use  of  biomass,  is 
problematic in  Czechia. Czechia does not  respect  the “no debt  rule” under  Land Use,  Land 
Use Change and Forestry  (LULUCF), while current  investment  plans are heavily  reliant  on 
future large-scale biomass heating and transport, while an assessment of the trajectories and 
sustainable supply of biomass, and its impacts on the LULUCF sinks and biodiversity as well 
as impact on air quality shall only be carried out. The infrastructure and the access rules shall 
support  an  important  development  of  decentralized  small  renewable  sources,  in  particular 
renewable  electricity  generation.  Smart  grids  would  enable  free  further  resources  by 
supporting  the  development  of  demand  response  mechanisms.  Specific  attention  should  be 
paid to stranded assets and the need to invest in a future-proof infrastructure. At component 
level, measures under Pillar 2 ‘Physical Infrastructure and Green Transition’ have the greatest 
impact on the implementation of the green transition.  

Publications Office of the European Union, Luxembourg, 2019, ISBN 978-92-79-98727-4, doi:10.2760/973672, 
JRC114200. 
8  Regulation  (EU)  2018/1999  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  on  the 
Governance of the Energy Union and Climate Action 

15 

 
 
 
 
                                                                                                                                                                                     
 
Table  2  below  gives  an  overview  of  Czechia’s  objectives,  targets  and  contributions  under 
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 
2018 on the Governance of the Energy Union and Climate Action.  

Table 2: Czechia’s national targets and contributions regarding energy and climate 

National targets and 
contributions  

Binding target for greenhouse gas 
emissions compared to 2005 under 
the Effort Sharing Regulation (%) 

National target/contribution for 
renewable energy: Share of energy 
from renewable sources in gross 
final consumption of energy (%) 

Latest 
available 
data 

2020 

2030 

Assessment 
of 2030 
ambition 
level 

4% (2018) 

9% 

-14%  As in ESR 

16.2% (2019)  13% 

22% 

Unambitious 
(23% is the 
result of RES 
formula) 

National contribution for energy efficiency: 

Primary energy consumption 
(Mtoe) 
Final energy consumption (Mtoe) 

40.4 (2018)

25.3 (2018)

43.3 

41.43  Low 

23.9 

23.65  Modest 

Level of electricity  
interconnectivity (%) 

26.6% (2018)

29.6% 

44.1
% 

N/A 

Source: Assessment of Czechia’s national energy and climate plan, SWD (2020) 902 final. 

Environmental protection and climate change  

As  regards  the  main  environmental  challenges,  Czechia  is  on  track  meeting  the  EU’s  2020 
recycling target. However, more effort is still needed to comply with the recycling targets set 
for  the  post-2020  period  as  the  landfilling  remains  a  particularly  important  waste  treatment 
option. 

Air  quality  remains  a  significant  problem.  Although  the  national  scheme  for  exchanging 
boilers  in  individual  households,  supported  by  the  Cohesion  Policy  funds  is  being 
implemented  in  all  regions,  domestic  solid  fuels  combustion  together  with  the  old  car  fleet 
remains  the  largest  source  of  air  pollution.  Particulate  matter,  nitrogen  dioxide,  ozone  and 
benzo(a)pyrene cause the main concern and health risks for the Czech citizens. 

The most significant pressure on rivers is from anthropogenic pressure and diffuse pollution 
from agriculture is the most significant pressure on groundwater bodies. The main pressures 
on nature and the Natura 2000 network remain the changes in agricultural land management 
(both the abandonment of land and intensification of farming), forestry and intense fishpond 
farming.  The  expected  progress  resulting  from  planned  measures  is  low  as  significant 
pressures such as hydromorphological pressures are not addressed.   

Due  to  anthropogenic  changes,  damage  to  the  soil  by  compaction,  water  and  wind  erosion 
and the loss of biodiversity, water retention capacity of land has been worsening in Czechia 
to  current  deficit.  Following  several  years  of  drought,  Czechia  has  been  experiencing 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
devastating  bark  beetle  calamite  since  2018.  To  ensure  flood  and  drought  prevention  and 
protection,  improving  the  water  retention  ability  of  the  landscape  is  a  key  element.  While 
Czechia  is  planning  to  apply  several  close  to  nature  measures,  a  strategy  to  systematically 
support  measures,  nature-based  solutions  in  floods  and  droughts  management  as 
priority measures through comprehensive planning are not yet implemented. 

Digital dimension 

Czechia ranks 17th in the Digital Economy and Society Index 2020 (DESI). Based on data 
prior  to  the  pandemic,  Czechia’s  strongest  dimension  was  the  integration  of  digital 
technologies. The score was high thanks to a solid performance in e-commerce. At the same 
time,  the  Czech  companies  reported  difficulties  in  finding  digital  experts.  The  government 
was rolling out fixed very high-capacity networks and new digital public services but take-up 
remained limited. 

Chart 1: Performance of Czechia in the Digital Economy and Society Index (DESI 2020)  

Note: EU aggregate corresponds to EU28, based on 2020 DESI report. 

Czechia  ranks  24th  in  the  connectivity  dimension.  Despite  a  very  high  coverage  of  fast 
internet  (97%),  fixed  very  high-capacity  networks  cover  only  33%  of  the  households.  In 
addition,  there  is  a  significant  divide  between  urban  and  rural  areas  where  the  coverage  is 
only 6% of rural households. The take-up of ultra-fast broadband services is curbed by low 
demand caused by several factors (e.g. subscription price, population purchasing power, age, 
education).  To  improve  connectivity,  more  investment  is  needed  in  very  high-capacity 
networks,  accompanied  by  appropriate  demand-side  measures.  Czechia  finalised  the  5G 
auction and awarded frequencies to 5 operators including the 3 main Czech players. 

Digital  transformation  is  on  track,  but  advanced  digital  skills  need  to  improve  to 
address  the  growing  need  of  organisations  and  companies  to  quickly  go  through  the 
digital transformation.  The role of education and training systems  at  all levels  – from  the 
primary and secondary to the tertiary – will be essential. Czechia also needs to train teachers, 

17 

 
 
 
better  equip  schools,  support  new  university  programmes  in  advanced  technologies  and 
ensure equal access to digital learning (also for disadvantaged students). The government also 
needs to stimulate adult training and encourage companies to provide on-the-job training on 
digital skills and intensive digital courses for employees to up/reskill them on the job.  

Despite some progress in terms of rolling out digital public services, Czechia ranks 22nd 
in  DESI  index  for  eGovernment.  The  COVID-19  pandemic  showed  the  government’s 
inability  to  use  the  full  potential  of  digital  technologies  to  make  the  economy  and  society 
more resilient. The quality and inter-connection between the current services remain low: the 
legislation  does  not  fully  reflect  the  shift  to  digital,  users'  interface  is  too  complex,  ICT 
procurement  is  often  overpriced,  systems  tend  to  have  cybersecurity  gaps,  and  citizens  and 
businesses are reluctant to use public services digitally. Czechia needs to increase the take-up 
by  increasing  citizens’  and  businesses’  trust  in  the  existing  and  new  eGovernment  services 
and  by  making  them  more  user  friendly  and  interoperable,  ideally  through  a  central  Public 
Administration  Portal.  Part  of  the  actions  related  to  the  improvement  of  eGovernment  are 
reflected in the plan. Linked to eGovernment, the digitalisation of and improvement of access 
to justice via electronic means constitutes a reform priority for Czechia. 

Digitisation  of  businesses  and  in  particular  SMEs  needs  support.  The  COVID-19  crisis 
showed that the ICT sector is relatively mature and the start-up scene in this field is active. 
Czechia  is  a  leader  in  the  video  gaming  or  cybersecurity  industry.  However,  traditional 
businesses struggle to embrace the digital transformation. Technologies can be a fundamental 
tool  for  economic  recovery  by  favouring  the  shift  towards  sustainable  manufacturing.  A 
major  obstacle  to  the  digitisation  of  companies  is  the  lack  of  digital  technology  experts, 
particularly  for  SMEs.  Companies  cannot  find  sufficiently  qualified  workers,  especially  in 
areas such as automation and data analytics. Czechia needs to roll out policies and initiatives 
that will help companies find and hire digital experts and support excellence centres such as 
digital  innovation  hubs  to  help  digitise  the  economy.  These  centres  should  also  offer 
sufficient  technological  capacities  such  as  supercomputers  or  cloud  infrastructure.  Czech 
businesses  would  benefit  if  the  country  would  join  digital  multi-country  projects  such  as 
potential Important Projects of Common European Interest (IPCEI) that would provide new 
digital  capacities  and  expertise  in  areas  such  as  quantum,  cybersecurity,  blockchain  or 
microelectronics.  Potential  IPCEI would also  allow to  focus investments on a few strategic 
industrial value chains to support the green and digital transition as well as an open strategic 
autonomy of the Czech economy. The authorities are committed to encourage solutions based 
on artificial intelligence.  

18 

 
 
 
 
Box 1: Progress towards the Sustainable Development Goals 

Eurostat for monitoring progress towards the SDGs in an EU 

Figure: SDGs and key dimensions of the recovery and resilience plan 

The  objectives  of  the  Sustainable  Development  Goals  (SDGs)  are  integrated  in  the 
European  Semester  since  the  2020  cycle.  This  provides  a  strong  commitment  towards 
sustainability  in  coordination  of  economic  and  employment  policies  in  the  EU.  In  that 
respect,  this  section  outlines  Czechia’s  performance  with  respect  to  SDGs  with  particular 
relevance  for  the  four  dimensions  underpinning  the  2021  Annual  Sustainable  Growth 
Strategy  and  of  relevance  to  the  RRPs  (green  transition,  fairness,  digital  transition  and 
productivity, and macroeconomic stability), indicating possible areas where investments and 
reforms in line with the objectives of the Facility could further accelerate the progress on the 

19 

 
 
 
 
SDGs. 

20 

 
 
Green transition 

Czechia’s record in green SDGs is mixed (see also Section 2.3.1). Despite recent initiatives, 
meeting  its  climate  and  environmental  targets  requires  additional  efforts.  Final  energy 
consumption remains high and energy productivity is significantly below the EU-27 average. 
While energy import dependency is below the EU-27 average, the share of renewable energy 
in gross final energy consumption remains low. Even though improvements have been made, 
the greenhouse gas emission intensity of energy consumption remains significantly above the 
EU-27 average, suggesting improvement potential on SDG 7 ‘Affordable and clean energy’ 
and SDG 13 ‘Climate action’.  

Fairness 

There has been some progress made in most fairness-related SDGs, in particular on poverty 
(SDG 1 “No poverty”), well-being (SDG 3 “Good health and well-being”) and decent work 
(SDG  8  “Decent  work  and  economic  growth”).  The  employment  rate  of  82.4%  (age  group 
20-64) in 2020 was one of the highest in the EU. Czechia performs well with respect to the 
risk of poverty or social exclusion, with only 12.5% of the population facing such a risk in 
2018, the lowest in the EU. There were clear improvements in avoidable mortality, work and 
traffic  accidents,  and  exposure  to  particulate  matter.  The  gender  pay  gap  has  decreased 
slightly  in  recent  years  but  18.9%  stood  above  the  EU-27  average  (of  14.1%)  in  2018. 
Despite recent  improvements, the employment  rate of women is significantly below that of 
men,  mainly  attributable  to  caring  responsibilities  of  women.  Challenges  persist  on  SDG  4 
‘Quality  education’,  where  post-secondary  educational  attainment  and  participation  in  adult 
learning  remain  below  the  EU  average.  It  is  estimated  that  due  to  ongoing  technological 
change,  about  37%  to  69%  of  low-skilled  jobs  could  be  automated  in  the  EU  in  the  near 
future, raising the demand for better educated and better skilled workers. Compared to other 
Member  States,  Czechia  performs  very  well  in  terms  of  the  share  of  early  leavers  from 
education and training, despite recent deterioration in the disadvantaged regions. On SDG 10 
‘Reduced  inequalities’,  there  remain  persistent  and  relatively  high  gaps  between  Czech 
nationals and non-EU citizens. Moreover, even if poverty statistics suggest improvements in 
recent years, the COVID-19 crisis is expected to have increased vulnerability and associated 
poverty  risks.  School  closures  and  the  switch  to  digital  learning  are  also  expected  to  have 
affected students coming from vulnerable backgrounds. 

Digital transition and productivity 

Czechia’s  R&D  spending  is  on  an  upward  trajectory  but  still  below  the  EU-27  average. 
Number of patent applications has also been increasing but remains much lower compared to 
the  EU-27  average.  Therefore,  performance  on  SDG  9  ‘Industry,  innovation  and 
infrastructure’ is mixed and further progress would benefit Czechia’s economic development. 
Similarly,  investments  have  been  lagging  –  accelerated  investments  in  digital  infrastructure 
would support the economic recovery and help reduce Czechia’s gap with other countries in 
the  coverage  of  very  high-capacity  networks.  While  basic  digital  and  software  skills  are 
widespread, specific, and advanced digital skills are weaker, with clear shortages in the ICT 
specialist workforce.  

Macroeconomic stability 

21 

 
 
Czechia’s  economy  performed  very  well  before  the  COVID-19  crisis,  as  reflected  by 
good outcomes for SDG 8 ‘Decent work and economic growth’. Effective justice systems 
are  essential  for  the  investment  climate  and  the  sustainability  of  long-term  growth,  and  a 
prerequisite for the fight against corruption. The perception of judicial independence among 
the  general  public  and  companies  is  average.  Overall,  51%  of  both  the  general  public  and 
companies consider that the independence of the courts and judges in Czechia is either ‘very 
good’ or ‘fairly good’ in 2021 as reported in the 2021 EU Justice Scoreboard and the 2021 
EU  Rule  of  Law  Report.  Czechia  can  rely  on  strong  institutions,  reflected  in  its  relatively 
high score for SDG 16 ‘Peace, Justice and strong institutions’. While Czechia performed very 
well  on  employment,  certain  disadvantaged  groups  could  be  better  integrated  in  the  labour 
market. Despite its slight decline, the gender pay gap remains among the highest in Europe.   

3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN  

3.1. Overall strategy of the plan  

The  recovery  and  resilience  plan  of  Czechia  is  a  comprehensive  response  to  the 
consequences  of the COVID-19 crisis,  targeting the main challenges identified  and the 
systemic  weaknesses  of  the  Czech  economy.  It  builds  on  Czechia’s  global  development 
vision “Strategic Framework 2030” based on the following pillars: 

(1) promoting entrepreneurship and innovation; 

(2)  implementing  growth-enhancing  measures  by  focusing  on  research,  development  and 
innovation and strengthening infrastructure resilience; 

(3) increasing the efficiency of the use of natural resources and preventing the damage caused 
by the consumption of natural resources and the production of pollutants. 

The Czech RRP comprises 26 components in six areas: digital transformation, physical 
infrastructure  and  green  transition,  education  and  labour  market,  institutions, 
regulation  and  business  support,  research,  development  and  innovation,  health  and 
resilience of the population.  

Czechia  requests  RRF  funding  of  almost  CZK  180  billion,  corresponding  to  EUR  7.036 
billion, which is very close to the maximum financial contribution of EUR 7.07 billion. The 
plan  also  includes  measures  worth  CZK  11.3  billion  (EUR  0.44  billion)  to  be  funded  from 
national  sources.  The  plan  envisages  forward-looking  measures  facilitating  the  digital 
transformation and green transition of the Czech economy. The plan puts forward ambitious 
measures  for  the  digital  transformation  of  the  Czech  economy  taking  a  comprehensive 
approach, which contributes to the development of the national layer of the European digital 
ecosystem. Such measures include the expansion of eGovernment and eHealth services, the 
improvement of very high capacity and 5G networks, digital innovation, digital skills, digital 
finance, and the digitalisation of industry. The plan aims at increasing the share of sustainable 
modes of transport, increasing energy saving and reducing the emission of greenhouse gases 
while  contributing  to  climate  mitigation  and  adaptation  objectives,  to  the  preservation  and 
restoration of nature and to the implementation of circular economy solutions. Investments in 
renewable  energy  sources,  modernisation  of  district  heating  distribution  networks, 
replacement of coal-fired boilers and the improvement of energy efficiency of residential and 

22 

 
 
public buildings are expected to help Czechia achieve its 2030 energy and climate objectives 
and support its transition to a circular economy. 

The plan coherently addresses several identified weaknesses of the economy, notably the 
industry’s exposure to the challenges posed by automation and the green transition, the 
low  level  of  R&D  performance  and  innovation,  skill  mismatch,  low  labour  market 
participation  of  women  and  the  low-skilled  and  inefficient  public  administration. 
Reinforced  support  of  schools  with  a  higher  share  of  pupils  with  weak  socio-economic 
background  and  IT  equipment  for  disadvantaged  pupils  and  students  shall  help  address 
inequalities  in  education  and  training.  Increasing  childcare  capacities  shall  foster  labour 
market  participation  of  women.  Healthcare  recommendations  are  addressed  through 
reinforced cancer prevention and rehabilitation care, development of an eHealth portal, which 
is expected to foster integrated care practices, and support to education in healthcare. Further 
complementary actions include measures to improve long-term care.  

These investment plans will be supported by a key reform of the procedure for granting 
construction  permits,  including  digitalisation of  the  process,  significantly  reducing  the 
length  of  the  process.  Both  the  eGovernment  and  anti-corruption  measures  are  set  to 
improve the business environment even further. Reforms of the judiciary should improve the 
efficiency and transparency in the areas of courts, judges, prosecutors and bailiffs. 

Table 3. Components and associated costs (only those financed from the RRF) 

Number 

Component  Name 

Digital transformation 

1 

2 

3 

4 

5 

6 

1.1 Digital services for citizens and businesses 

1.2 Digital government systems 

1.3 Digital high-capacity networks 

1.4 Digital economy and society, innovative start-ups and new 
technologies 

1.5 Digital transformation of enterprises 

1.6 Acceleration and digitalization of building permit process 

Physical infrastructure and green transition 

7 

8 

9 

10 

11 

2.1 Sustainable and safe transport 

2.2 Reduction of energy consumption in the public sector 

2.3 Transition to cleaner energy sources 

2.4 Developing clean mobility 

2.5 Building renovation and air protection 

23 

Cost 
EUR 
(million) 

112 

277 

227 

224 

196 

57 

943 

325 

262 

192 

632 

 
 
  
  
Cost 
EUR 
(million) 

542 

141 

131 

117 

191 

Number 

Component  Name 

12 

13 

14 

15 

2.6 Nature protection and climate change adaptation 

2.7 Circular economy and recycling and industrial water 

2.8 Brownfields 

2.9 Promotion of biodiversity and drought issues 

Education and labour market 

16 

17 

18 

23 

24 

3.1 Innovation in education in the context of digitalisation 

3.2 Adaptation of the capacity and orientation of school programmes  517 

3.3 Modernisation of employment services and labour market 
development 

886 

Institutions, regulation and business support 

19 

20 

21 

22 

4.2 New quasi-equity instruments to support entrepreneurship 

39 

4.3 Anti-corruption measures 

4.4 Enhancing the efficiency of the public administration 

4.5 Developing the cultural and creative sectors 

1 

214 

Research, development and innovation 

5.1 Excellent R&D in priority areas of public interest in health care 

196 

5.2 Support for R&D in companies and the introduction of 
innovations into business practice 

Health and resilience of population 

25 

26 

6.1 Increasing health system resilience 

6.2 National plan to strengthen oncological prevention and care 

TOTAL 

126 

153 

335 

7036 

3.2. Implementation aspects of the plan 

Consistency with other programmes  

The National Energy and Climate Plan (NECP) serves as both an analytical basis and a 
reference  framework  for  the  proposed  RRP  reforms  and  investments.  The  Czech  RRP 
explains  how  the  green  components  (2.2,  2.3  and  2.5)  are  in  line  and  contribute  to  the 
objectives  of  the  NECP.  The  RRP  mirrors  the  strong  emphasis  of  the  NECP  on  reducing 
greenhouse  gas  emissions,  especially  in  the  transport  sector,  enhancing  energy  efficiency 

24 

 
 
 
 
  
 
 
 
 
measures,  increasing  the  use  of  the  renewable  energy  sources  and  complements  these  by 
measures  fostering  climate  adaptation  through  increasing  the  resilience  of  forests  against 
climate change and enhancing the water retention of forests. The RRP measures are designed 
to contribute to ambitious targets to achieve carbon neutrality in the EU by 2050 and to the 
objective of reducing GHG emissions by 2030 by 30% compared to 2005. According to the 
NECP, the emission intensity of GDP in the Czech Republic is above EU average, due to the 
higher  share  of  industry  in  the  GDP  and  the  higher  emission  intensity  of  transport.  In 
response,  the  transport  components  of  the  RRP  aim  at  investment  in  electric  transport  and 
smart  mobility  in  both  urban  and  rural  areas.  The  NECP  priorities  of  achieving  an  optimal 
energy mix and promoting the use of Renewable Energy Sources (RES) are reflected in the 
RRP RES component 2.3, which aims at lowering the level of coal combustion for heat and 
electricity production by increasing the efficiency of district heating distribution and reducing 
greenhouse  gas  emissions  and  pollutants.  To  achieve  energy  efficiency  targets,  the  NECP 
emphasises  the  need  to  renovate  the  national  stock  of  residential  and  non-residential 
buildings,  both  public  and  private,  which  is  in  line  with  the  RRP  components  pursuing  the 
objective  of  at  least  30%  of  the  primary  energy  savings,  and  financing  large-scale 
investments  aimed  at  tackling  the  low  levels  of  energy  efficiency  of  buildings.  Based  on  a 
recent  JRC  study  across  various  European  cities,  a  renovation  rate  of  3%  in  the  residential 
sector is needed for reductions in heating and cooling energy use of up to 32.5% by 2030. 9 

The RRP is designed to be complementary to the European Structural and Investment 
Funds in the programming period (2014-2020) as well as to the Cohesion policy funds in 
the  programming  period  (2021-2027).  As  the  Partnership  Agreement  (PA)  has  not  been 
finalised, the RRP explains main synergies at the strategic level (between priority areas of the 
Cohesion  Policy  funding  and  RRP  components),  which  are  then  elaborated  in  individual 
components.  A  well  elaborated  overview  table  of  complementarities,  based  on  available 
information, is included in the RRP Annex. The RRP recognises important synergies with the 
Cohesion  policy  and  stresses  that  complementarities  and  potential  overlaps  will  be 
systematically  and  continuously  assessed  at  different  levels  of  the  implementation  (e.g. 
strategic, programme and project levels) including through a dedicated mechanism to avoid 
“double funding”). When prioritising investment for the RRF funding, the following criteria 
were used: i) meeting the RRF criteria, in particular on the green and digital targets, ii) timing 
of the measures, iii) geographical and thematic scope of the projects. 

In  view  of  the  phase-out  of  lignite  and  black  coal  in  the  Northwest  Bohemia  and 
Moravia-Silesia, Czechia will adopt a territorial Just Transition Plan (JTP) to ensure a 
just  transition  to  those  structurally  disadvantaged  regions.  Support  from  the  Just 
Transition  Mechanism  and  the  Cohesion  policy  funds  will  be  complemented  by  several 
components  under  the  RRP,  focused  notably  on  building  renovation,  replacement  of 
household  boilers,  renewable  energy  sources,  sustainable  transport  and  mobility,  climate 
adaptation,  rehabilitation  of  industrial  land,  digitisation  of  SMEs  and  RDI  supporting 

9 D.A. Pohoryles, C. Maduta, D.A. Bournas, L.A. Kouris. Energy performance of existing residential buildings 
in  Europe:  a  novel  approach  combining  energy  with  seismic  retrofitting.  Energy  Build.,  223  (2020), 
10.1016/j.enbuild.2020.110024 

25 

 
 
                                                           
economic diversification, digital infrastructure, pre-school child facilities and social services 
infrastructure.  

The  RRP  outlines  its  contribution  to  the  Youth  Guarantee  initiative.  The  highest 
contribution  to  youth  employment  is  provided  by  the  education  and  labour  market 
components.  Component  3.1  will  support  the  necessary  competences  and  skills  of  young 
people so that they are able to  respond to  the challenges  linked to  twin  transition.  Reforms 
and  investments  under  component  3.2  will  create  a  supportive  ecosystem  to  support  youth 
employment  by  better  preparing  the  universities  for  distance  learning.  Reforms  and 
investments under both components will reinforce support to schools with a higher share of 
pupils  with  weak  socio-economic  background,  and  IT  equipment  for  disadvantaged  pupils 
and students shall help address inequalities in education. Increasing childcare capacities shall 
foster labour market participation of women.  

National arrangements for the implementation of the plan   

To  ensure  effective  implementation,  a  dedicated  RRP  implementation  structure  was 
introduced, which will be supervised by the Managing Council of the national recovery 
and  resilience  plan.  The  implementation  structure  is  composed  of  the  Delivery  Unit  (DU) 
which  is  the  Department  of  Coordination  of  the  National  Recovery  Plan  at  the  Ministry  of 
Industry  and  Trade,  tasked  with  the  main  implementation  and  coordination  responsibilities, 
Component  Owners  (individual  ministries  responsible  for  implementation,  11  in  total), 
intermediaries  and  beneficiaries.  Tasks  and  competences  are  detailed  in  a  specific 
Government resolution No 467 on the RRP, which was adopted by the Czech Government on 
17  May  2021.  The  Ministry  of  Finance  will  carry  out  the  function  of  the  audit  body  being 
responsible  for  auditing  the  implementation  of  the  plan.  Administrative  capacity  will 
gradually increase in the second half of 2021 mainly by strengthening the existing structures. 

Gender equality and equal opportunities for all  

The  RRP  contains  a  series  of  measures  that  are  expected  to  address  the  country’s 
challenges in the area of gender equality and equal opportunities for all. The proposed 
measures  are  concentrated  under  pillar  3  (Education  and  Employment  components).  As 
regards gender equality, the RRP foresees to increase labour market participation of women 
with small children through ample investment in facilities for children below the age of three 
and  a  legislative  amendment  to  ensure  sustainable    financing  of  low-age  childcare  and  its 
adequate  coverage  in  the  regions.  A  legislative  reform  is  foreseen  to  better  target  active 
labour  market  policies  at  the  most  vulnerable  groups.  The  part  of  the  plan  addressing 
inequalities  in  education  includes  reinforced  support  of  schools  with  a  high  proportion  of 
children  from  disadvantaged  socio-economic  backgrounds,  training  and  mentoring  of 
teachers dealing with heterogeneous groups of pupils, and additional tutoring for children at 
risk of failure due to the prolonged school lockdown. The plan also envisages investment in 
digital  equipment  of  schools  to  ensure  access  to  learning  for  disadvantaged  pupils  and 
students. The situation and needs of people with disabilities are addressed in several parts of 
the plan, including in relation to the new construction code, renovation of buildings and their 
improved accessibility, digitalisation, eHealth and social care. The challenges faced by older 
people are also addressed, in particular through improving the quality and accessibility of the 
long-term  care,  social  and  health  systems.  Measures  addressing  the  situation  of  Roma  in 

26 

 
 
Czechia  are  largely  absent  from  the  plan,  except  for  component  3.3  (employment  services 
and  labour  market  development)  despite  the  fact  that  EU  Strategic  Framework  for  Roma 
equality, inclusion and participation identifies Czechia as one of those Member States, which 
are encouraged to ensure that the available funding effectively reaches the Roma and invited 
to  be  ambitious  in  terms  of  promoting  the  socio-economic  integration  of  marginalised 
communities such as the Roma. 

Stakeholder consultation 

The  Czech  authorities  engaged  in  a  wide  range  of  consultation  activities  in  the 
preparatory phase of the RRP. The consultation was heavily affected by the second wave 
of COVID-19 pandemic and largely organised online (virtual meetings or written comments). 
The  Ministry  of  Industry  and  Trade  organised  a  set  of  round  tables  in  November  and 
December  2020  on  the  different  pillars  of  the  plan,  involving  the  social  partners  and  local 
government  representatives.  The  draft  RRP  was  also  discussed  in  the  Government  Council 
for  Sustainable  Development  or  the  Science,  Research  and  Innovation  Council.  The  Czech 
RRP  was  subject  to  a  formal  consultation  in  April  2021,  allowing  for  comments  and 
suggestions  by  a  variety  of  relevant  stakeholders,  including  the  social  partners.  Several 
debates  for  the  general  public  were  also  organised.  Social  partners,  local  government 
representatives and NGOs claim they could be even more consulted on the preparation of the 
RRP.  

Most  comments  in  the  consultation  process  were  related  to  digitalisation,  support  to  the 
cultural  sectors,  revitalisation  of  brownfields,  cycling  infrastructure  or  climate  protection 
measures.  Several  comments  from  the  public  and  stakeholders  have  been  incorporated  into 
the  plan’s  measures  during  its  preparatory  phase.  This  included  for  instance  increasing  the 
allocations  for  measures  supporting  digital  transformation  of  enterprises  or  cultural  sectors 
and strengthening the gender equality dimension in some components of the Plan, following 
the comments of the Human Rights Envoy.  

During the implementation of the RRP, an active consultation and involvement of social 
partners  and  key  stakeholders  will  be  ensured  through  their  membership  in  the 
Committee  of  the  RRP,  which  was  set  up  as  a  platform,  created  primarily  for  the 
cooperation  of  all  relevant  actors  involved  in  the  implementation  of  the  plan.  The 
Committee will be responsible among others for monitoring and supervising the achievement 
of  progress,  i.e.  meeting  the  milestones  and  targets  of  the  individual  components,  for 
publicity  activities,  for  assessing  the  reports  on  the  implementation.  All  members  of  the 
Committee  shall  be  involved  in  building  and  developing  partnerships,  communication 
platforms  and  cooperation  with  other  stakeholders  important  for  the  implementation  of  the 
RRP. 

Implementation and digital security self-assessment 

Czechia  presented  a  preliminary  security  self-assessment  of  investments  in  digital 
capacities  funded  by  the  Recovery  and  Resilience  Facility.  Existing  cyber  security 
measures  and  effective  tools  will  be  used  to  defend  critical  infrastructure  and  modern 
technologies with security applications. In component 1.3 the Czech plan makes reference to 
the  EU  toolbox  for  the  Cybersecurity  of  5G  networks.  Implementation  of  measures  under 

27 

 
 
components  1.1  and  1.2  (Digital  public  services  and  administration  system),  1.3  (high 
capacity  networks),  1.4  (digital  economy  and  society)  and  1.5  (digital  transformation  of 
enterprises)  will  support  the  building  of  Europe’s  strategic  autonomy  in  the  field  of 
information  and  communication  systems  and  digital  services,  which  is  in  line  with  the 
priority  of  strengthening  the  EU’s  digital  sovereignty.  Strategic  measures  mentioned  in  the 
security self-assessment would need to be closely monitored during the implementation of the 
plan.  The  Technical  Support  Instrument  (TSI)  provides  expertise  in  building  capacities  to 
implement  the  Plan  in  a  number  of  areas  covered  by  the  plan  such  as  digitalisation  of 
government,  smart  and  intelligent  mobility,  digital  infrastructure  and  public  infrastructure 
investments,  as  well  as  for  the  overall  implementation  of  the  plan.  Strategic  measures 
mentioned  in  the  security  self-assessment  would  need  to  be  closely  monitored  during  the 
implementation of the plan. 

Cross-border and multi-country projects 

The  RRP  support  of  cross-border  projects  is  relevant.  It  includes  participation  of 
Czechia  in  5G  networks  and  the  application  of  5G-ecosystems  across  the  Member 
States.  It  contributes  to  strengthening  the  network  of  European  Digital  Innovation  Hubs, 
creates  a  new  European  AI  excellence  centre,  it  will  invest  in  Quantum  Communication 
Infrastructure  and  it  will  support  the  European  Blockchain  Service  Infrastructure.  It  also 
includes  a  direct  support  programme  for  the  investments  to  enterprises,  including  SMEs, 
through  specific  calls  for  projects  selected  for  the  potential  IPCEI  on  Microelectronics  and 
Connectivity, particularly in the area of microprocessors. 

Communication strategy 

The  RRP  broadly  outlines  the  Czech  communication  plans.  The  objectives  of  the 
communication strategy are in line with the RRF Regulation and aim to raise awareness about 
the RRP’s contribution to the Czech and European recovery and to the twin transition. The 
described  communication  strategy  objective  is  to  ensure  awareness  raising,  of  the  financial 
contributions from the RRF, as well as ensuring effective communication of benefits to the 
general  public  and  other  target  groups.  The  communication  strategy  is  a  live  document, 
which will be updated and refined annually by detailed plans, following the state of play of 
the  achievement  of  milestones  and  targets  across  all  activities.  The  annual  communication 
plans will include monitoring progress in the year, implementation deadlines and allocations 
for  the  activities/projects.  The  basic  principles  applied  in  the  field  of  publicity  will  be 
Transparency  and  openness;  “Effectiveness,  efficiency,  economy;  Neutrality  and  avoidance 
of  political  influence;  Responsibility,  honesty.”  There  is  no  further  specification  of  these 
actions. 

Czechia  plans  to  target  the  general  and  professional  public.  Czechia  plans  to  use  the 
following  communication  channels:  Websites  and  social  networks;  Interviews  in  print  and 
radio  media,  and  online  publications,  Public  seminars/webinars  representing  NPOs;  NPO 
media campaign; and press releases. It is essential that the described communication plan be 
fully developed and implemented. Coordination between EU and national authorities, should 
be pursued to maximise the impact and effectiveness of communications. 

State aid  

28 

 
 
State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience  Facility.  Union  funds  channelled  through  the  authorities  of  Member  States,  like 
the RRF funds, become State resources and can constitute state aid if all the other criteria of 
Article 107(1) TFEU are met. When this is the case and state aid is present, these measures 
must be notified and approved by the Commission before Member States can grant the aid, 
unless those measures are covered by an existing aid scheme or comply with the applicable 
conditions  of  a  block  exemption  regulation,  in  particular  the  General  Block  Exemption 
Regulation (GBER) declaring certain categories of aid compatible with the internal market in 
application  of  Articles  107  and  108  TFEU10.  When  state  aid  is  present  and  it  requires 
notification, it is the duty of the Member State to notify state aid measures to the Commission 
before granting them, in compliance with Article 108(3) TFEU. In this respect, the State aid 
analysis carried out by Czechia in the RRP cannot be deemed a state aid notification. In as far 
as Czechia considers that a specific measure contained in the RRP entails de minimis aid or 
aid exempted from the notification requirement, it is the responsibility of Czechia to ensure 
full compliance with the applicable rules. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN  

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation  

The Czech RPP aims at a comprehensive and balanced response to the consequences of 
the pandemic crisis, while tackling the main systemic socio-economic challenges (as 
detailed in section 4.3 of this document). As such, it makes an explicit reference to the six 
fundamental pillars of the Recovery and Resilience Facility pursuant to Article 3 of the 
Recovery and Resilience Facility Regulation. It presents a global vision of an innovative 
economy, supporting economic growth through green and digital transitions. The overarching 
objective of the plan is to re-launch sustainable growth and increase the quality of life in 
Czechia. The focus is on five key public policy areas: green economy, education, research 
and innovation, health, public administration with digitalization. 

10 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1 

29 

 
 
 
                                                           
Table 4: Coverage of the six pillars of the Facility by Czechia’s RRP components  

Green 
transitio
n  

Digital 
transfor
mation  

Smart, 
sustaina
ble & 
inclusiv
e 
growth  

Social 
and 
territori
al 
cohesio
n  

Health, 
economi
c, social 
and 
instituti
onal 
resilienc
e  

Policies 
for the 
next 
generati
on  

 ●   

 ○  

○   

 ●   

 ○  

 ●  

○ 

 ●      

○ 

●  

● 

●  

● 

 ● 

○ 

○ 

● 

● 

○ 

30 

 ● 

● 

 ● 

○ 

● 

○ 

○ 

○ 

○ 

○ 

○ 

○ 

 ●   

 ○ 

○ 

○ 

○ 

1.1 Digital services 
for citizens and 
businesses   

1.2 Digital public 
administration 
systems 

1.3 High-capacity 
digital networks  

1.4 Digital economy 
and society, 
innovative start-ups 
and new technologies 

1.5 Digital 
transformation of 
enterprises 

1.6 Acceleration and 
digitalization of the 
building process 

 2.1 Sustainable and 
safe transport  

2.2 Reduction energy 
consumption in the 
public sector  

2.3 Transition to 
cleaner energy 
sources 

2.4  Clean mobility 

2.5 Building 
renovation and air 

 
 
   
  
   
  
  
  
  
  
  
   
 
 
  
 
 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Green 
transitio
n  

Digital 
transfor
mation  

Smart, 
sustaina
ble & 
inclusiv
e 
growth  

Social 
and 
territori
al 
cohesio
n  

Health, 
economi
c, social 
and 
instituti
onal 
resilienc
e  

Policies 
for the 
next 
generati
on  

protection  

2.6 Nature 
protection and 
adaptation to climate 
change  

2.7 Circular 
economy, recycling 
& industrial water 

2.8 Brownfields 
revitalisation 

2.9 Promotion of 
biodiversity and 
fight against drought  

○ 

● 

● 

○ 

3.1 Innovation in 
education in the 
context of 
digitalisation 

3.2 Adaptation  of 
school programmes 

3.3 Modernisation of 
employment services 
and labour market 
development  

4.2 New quasi-equity 
instruments to 
support 
entrepreneurship 
and development of 
the ČMZRB as a 
national devel. bank  

4.3 Anti-corruption 

● 

○ 

○ 

● 

○ 

● 

● 

○ 

● 

● 

● 

● 

31 

○ 

○ 

 ● 

 ● 

● 

● 

● 

○ 

● 

 
 
   
 
  
 
  
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
  
  
 
  
  
  
 
  
  
  
  
  
  
  
  
  
Green 
transitio
n  

Digital 
transfor
mation  

Smart, 
sustaina
ble & 
inclusiv
e 
growth  

Social 
and 
territori
al 
cohesio
n  

Health, 
economi
c, social 
and 
instituti
onal 
resilienc
e  

Policies 
for the 
next 
generati
on  

○ 

● 

● 

● 

● 

○ 

● 

● 

● 

○ 

○ 

○ 

● 

reforms 

4.4 Enhancing the 
efficiency of  public 
administration  

4.5 Development of 
the cultural and 
creative sectors  

5.1 Excellent R&D in 
the health sector 

5.2 Support for R&D 
in companies and the 
introduction of 
innovations into 
business practice  

6.1 Increasing  
resilience of the 
health system 

6.2 National plan to 
strengthen 
oncological 
prevention and care  

Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” 
the component partially contributes to the pillar 

Green transition 

The  plan  provides  a  comprehensive  overview  of  challenges  related  to  climate  and 
environment and outlines the contribution of reforms and investments to achieving the 
EU’s  carbon  neutrality  target  by  2050.  Czechia  is  a  highly  industrialised  economy,  with 
energy and industrial processes contributing to overall greenhouse gas emissions of 81% (of 
which 96% is related to  the combustion of fuels). Czechia ranks among the Member States 
with the highest average air concentrations of dust particles in the EU, resulting largely from 
aging  industrial  technologies  and  burning  of  solid  fuels  in  households.  The  plan  also 

32 

 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
recognizes  the  need  for  strengthening  of  ecosystems  amid  the  deteriorating  climate 
conditions. 

Given the magnitude of green challenges in Czechia, the share of 41.6% of the allocation 
attributed to climate-related actions appears only partially satisfactory. The plan aims to 
support  the  transition  to  a  circular  economy  in  Czechia.  This  shall  be  achieved  through 
measures  preventing  waste,  increasing  recycling  infrastructure,  reducing  secondary  raw 
material  wastage,  increasing  the  share  of  recycled  materials  in  products,  and  increasing  the 
raw material security of Czechia through the continuous and uninterrupted availability of raw 
materials.  Moreover,  the  component  focuses  on  sustainable  water  management,  including 
measures aimed at saving and recycling water and optimising the use of water in businesses. 
The  transition  to  the  circular  economy  shall  help  increase  the  resilience  of  Czechia  against 
both environmental and economic threats.  

The  plan  aims  at  increasing  energy  efficiency,  reducing  energy  consumption  and  a 
smoother  transition  to  cleaner  energy  sources  in  the  household  sector.  This  entails  the 
energy  renovation  of  buildings,  including  the  construction  of  new  buildings,  the  use  of 
renewable  material  in  buildings  and  the  replacement  of  heating  sources  into  solid 
predominantly  fossil  fuels  with  low-emission  sources  and  emission-free  sources  in  the 
residential sector.  

The  strategic  planning  of  reforms  and  substantial  investments  shall  contribute  to 
greening of transport. Transport is one of the sectors with the highest emissions growth in 
Czechia. The plan aims to contribute to the digitalisation of transport, electro-mobility in rail 
transport, increasing the share of rail transport in freight and passenger transport, increasing 
the importance of active mobility in cities, improving traffic safety, and reducing the impact 
of  traffic  on  the  environment  and  public  health. The  issue  of  alternative  propulsion  in  road 
transport  and  urban  bus  transport  is  also  addressed.  These  new  measures  are  expected  to 
significantly contribute to growth and jobs in CZ and the EU, in particular due to the focus on 
investments  in  rail  and  road  infrastructure.  The  complementarity  of  the  rail  infrastructure 
investment projects with the TEN-T network could further strengthen EU-wide green growth. 
Expanded  and  upgraded  railway  infrastructure  will  enhance  the  resilience  of  transport 
systems, with wider beneficial impacts for other EU MS in terms of reduced vulnerabilities of 
logistic chains, as seen during the pandemic. 

The recovery plan shall contribute to the long-term resilience of ecosystems to climate 
change. A number of environmental measures aim at creating a framework for more efficient 
management of watercourses. The promotion of natural habitats shall ensure resilient forest 
ecosystems,  contributing  inter  alia  to  greater  biodiversity  and  climate  change  mitigation. 
These measures aim at making life more attractive in villages and effectively contributing to 
preventing the depopulation of the Czech countryside. 

Digital transformation 

The  plan’s  diagnosis  of  Czechia’s  challenges  in  the  area  of  digital  transformation  is 
relevant and accurate. Czechia particularly lags behind in terms of digitalisation of public 
services, standing close to the end of EU Member States’ ranking in this area. The plan also 
rightly  identifies  the  need  for  developing  the  digital  skills  of  citizens,  strengthening 
connectivity and creating an innovative environment. 

33 

 
 
The Czech RRP assigns to digital challenges 22.1% of the overall RRF allocation. The 
outlined  actions  particularly  aim  at  supporting  small  and  medium-sized  enterprises  (SMEs) 
by  improving  eGovernment,  focusing  investment  on  digital  transformation,  in  particular  on 
high-capacity  digital infrastructure, 5G  and technologies, on clean and efficient  production, 
ensuring  access  to  finance  for  innovative  businesses,  notably  in  early  (pre-seed  and  seed) 
stages,  and  improving  public-private  R&D  cooperation  in  selected  priority  areas  (e.g. 
aeronautics,  culture).  The  plan  focuses  on  completing  the  digitalisation  of  public 
administration, which started with the approval of the Digital Czechia strategy, enhancing on 
cybersecurity and resilience in particular in the health sector, which has already proven to be 
crucial before the COVID-19 outbreak.  

The  reforms  and  investments  are  rightly  targeting  the  improvements  in  digital  skills 
and expanding the opportunities for learning. Increasing digital skills is perceived as a key 
prerequisite  for  digitalising  the  economy.  The  plan  aims  at  reforming  the  education  and 
training  system  to  strengthen  digital  and  information  literacy,  and  IT  skills.  This  shall  be 
achieved by revising the curricula for primary and secondary education in order to reinforce 
IT education, adapt it to the latest trends and foster digital skills across the educational areas, 
promote  digital  skills  of  teachers  and  invest  in  digital  equipment  in  schools.  The  plan  also 
aims  at  addressing  the  digital  divide,  exacerbated  by  the  prolonged  school  lockdown,  by 
setting  up  a  fund  for  mobile  digital  devices  at  the  disposal  of  disadvantaged  pupils  and 
students.  The  ultimate  objective  of  the  component  is  to  adapt  education  and  training  to  the 
changing needs of the labour market, address the lack of digital experts and advanced digital 
skills  across  the  labour  force  by  supporting  new  appropriate  university  programmes,  and 
ensure long-term employability. 

Digital investments are expected to contribute to ambitions to modernise Czechia nearly 
across  all  components  of  the  RRP.  Supporting  the  digitalisation  of  industry,  the  use  of 
technologies and the emergence of an interconnected and long-term sustainable national layer 
of the European digital ecosystem are expected to support the digital transition of particularly 
small  and  medium-size  enterprises  through  digital  technologies.  Increased  digitalisation  in 
construction  proceedings  is  set  to  improve  the  business  and  investment  climate  in  Czechia. 
Digitalisation  of  transport,  electro-mobility  in  rail  transport,  increasing  the  share  of  rail 
transport in freight and passenger transport should lead to improved traffic safety and reduced 
impact  of  traffic  on  the  environment  and  public  health.  The  proposed  reform  of  the  Czech 
education  system  should  strengthen  digital  and  information  literacy  and  reinforce  IT 
education, adapting it to the latest trends and foster digital skills across the educational areas. 
It shall also promote digital skills of teachers and improve the level of digital equipment in 
schools.  The  plan  also  aims  at  addressing  the  digital  divide,  exacerbated  by  the  prolonged 
school  lockdown,  by  setting  up  a  fund  for  mobile  digital  devices  at  the  disposal  of 
disadvantaged pupils  and students.  Transformation of universities to  adapt  to  new forms  of 
learning and changing needs of the labour market is expected to facilitate transition to new, 
mainly digital  forms  of learning. This  is  addressed through investment  in digital  equipment 
and  technologies  and  training  of  university  staff  in  digital  skills  and  modern  teaching 
methods. The plan is  set to  also  stimulate a digital  shift  in  the cultural  and creative sectors 
and its integration within the innovation ecosystem.  

Smart, sustainable and inclusive growth 

34 

 
 
The plan presents the targeted policy actions across all relevant policy areas related to 
smart,  sustainable  and  inclusive  growth.  Smart  growth  will  be  promoted  particularly 
through actions targeting research and innovation and improvements in educational outcomes 
through curricular reform and enhanced teachers’ education. The plan aims at strengthening 
the  inclusion  through  addressing  the  negative  impact  of  children’s  socio-economic 
background  on  educational  outcomes.  As  regards  the  sustainable  growth,  the  plan’s  key 
investment  initiatives  should  inter  alia  contribute  to  a  cleaner  energy  mix,  industrial 
decarbonisation and greening of public transport. 

The plan reacts to the deterioration  of the labour market in view of COVID-19 crisis. 
Due to the contraction in economic growth and the end of government support schemes, the 
unemployment rate is expected to increase to 3.8% in 2021. While the overall unemployment 
rate remains low, job losses are expected to occur mainly in selected service sectors, with a 
large share of low-skilled workforce. The post-pandemic recovery and job creation should be 
particularly  supported  by  rolling  out  investments  into  green  construction  sector  activities 
(both  building  and  renovation),  renewables,  nature  protection,  sustainable  transport,  and 
digital  infrastructure.  The  modernisation  of  hospitals  and  clinical  processes  contribute  to 
attractiveness of jobs in the health sector.  

to 

to  contribute 

investments  are  expected 

The  reform  and 
strengthening 
competitiveness            through  research  and  innovation.  The  plan  rightly  identifies  the 
productivity-related  challenges  for  Czechia  and  the  need  for  innovation-driven  growth 
focused notably on Smart specialisation priority areas, while aiming at closing the gap vis-à-
vis  the  EU  in  terms  of  average  level  of  living  standard.  Delivering  a  higher  quality  of  the 
public science base, promoting academia-business linkages and enhancing commercialisation 
of research results and knowledge and technology transfer is set to kick-start innovation and 
make  businesses  more  competitive.  Additionally,  the  financial  and  non-financial  support  to 
innovative enterprises, especially SMEs, and help with internationalisation of domestic firms 
as well as research actors shall facilitate further economic growth and competitiveness. The 
decarbonisation  investments  shall  strengthen  the  competitiveness  of  the  industrial  sector, 
through supporting the inevitable process of green transition. 

The  reforms  are  designed  to  also  contribute  to  a  well-functioning  and  more  resilient 
Single  Market  with  strong  SMEs.  The  SMEs  are  set  to  particularly  benefit  from  a  strong 
demand impulse triggered by investments leading to internal sources of growth and fostering 
innovation, as well as from a direct support to the business sector. On the basis of the Digital 
Czechia Strategy, the Innovation Strategy 2020-2030 and the National AI Strategy, Czechia 
plans to create a connected and sustainable digital ecosystem through digital transformation 
of  enterprises.  This  ecosystem  should  encompass  new  and  emerging  technologies  such  as 
artificial intelligence, high performance computing, cybersecurity or cloud services, ensuring 
that  all  actors  in  the  system  interact  comprehensively  and  offer  them  proactively  vis-à-vis 
other actors in order to meet the needs of the market.  

Social and territorial cohesion 

The plan recognises the significant economic and social disparities within Czechia. The 
plan mainly reflects the uneven quality of the education system in several Czech regions and 
related  conditions  for  upskilling  and  reskilling.  Quality  education  and  the  development  of 
human  capital  are  prerequisites  for  economic  and  social  development.  Advanced 

35 

 
 
digitalisation and the associated transformation of the education system aims at increasing the 
share of jobs in higher value-added sectors and, conversely, reducing the share of jobs in the 
secondary sector of the economy, especially in heavy industry.  

The  plan  clearly  sets  out  that  social  and  territorial  cohesion  shall  be  also  supported 
from  other  EU  sources  than  the  RRF,  notably  from  the  Cohesion  Policy  funds.  The 
authorities  provide  consistent  references  to  other  types  of  EU  funding  for  a  number  of 
important policy areas. Such examples outside the scope of the plan include, for instance, the 
rolling out the broadband infrastructure (European Regional Development Fund), support to 
greening  of  the  heat  and  power  sector  (Modernisation  Fund)  and  transition  of  the  coal 
regions, such as the Northwest Bohemia and Moravia-Silesia regions (Just Transition Fund).  

The plan addresses the cohesion challenges primarily through reforms and investments 
in education and training, health and digitalisation. In education, the attention is given to 
supply of quality  education and inclusiveness  of  the system, in  view of pending health and 
social  inequalities.  The  acquisition  of  digital  equipment  for  schools  across  Czechia  is 
expected to open the opportunities for pupils from poorer regions  and disadvantaged socio-
economic  backgrounds.  The  optimization  and  infrastructure  investments  into  the  hospital 
network is set to reduce the regional disparities and improve the access to quality healthcare. 
The  expansion  of  digital  services  and  high-speed  broadband  shall  boost  possibilities  for 
distance learning and teleworking across Czechia, thus contributing to reducing regional and 
social disparities.  

Health, and economic, social and institutional resilience 

The plan rightly identifies the significant challenges for the Czech health system on the 
background  of  pandemic  situation.  The  plan  aims  at  strengthening  the  resilience  of  the 
health system by investing in healthcare infrastructure and improving the education of health 
workers  in  acute  care.  With  respect  to  healthcare  infrastructure,  the  objective  is  to  increase 
the availability and quality of rehabilitation care for patients in critical situations (post-acute 
care  episodes),  which  proved  insufficient  during  the  pandemic.  More  in  general, 
rehabilitation  care  capacity  in  Czechia  is  below  that  in  the  rest  of  the  EU.  Also,  the 
component aims at addressing the lack of highly specialised diagnosis tools and treatment of 
serious cardiovascular diseases, including transplant medicine. With respect to the education 
of healthcare personnel, systemic measures and investment are foreseen to tackle the growing 
shortage  of  healthcare  workers.  The  latter  complement  measures  previously  initiated  in 
Czechia with more direct relevance to the nursing profession. The Plan also aims at securing 
excellent  research  in  selected  health  areas  (e.g.  infectious  diseases  and  virology,  cancer, 
metabolic  diseases,  cardiovascular  diseases,  neuroscience  and  socio-scientific  research 
studying the socio-economic impacts of systemic health risks): the establishment of national 
research authorities that shall ensure better overall coordination and reduce fragmentation in 
the priority areas will support further the resilience of the country. 

The  plan  intends  to  overcome  educational  gaps  caused  by  the  pandemics  through 
investments into digitalization and the knowledge economy. The proposed measures target 
the  digitalization  of  primary  and  secondary  schools,  particularly  through  improving  the 
digital  skills  of  pupils  and  teaching  staff.  The  investments  shall  allow  for  support  to  pupils 
and  appropriate  learning  also  during  the  pandemic  restrictions.  The  reforms  of  tertiary 
education are designed to enable universities to adapt faster to changing economic and social 

36 

 
 
developments, as well as to pandemic situations. The innovative transformation of companies 
shall contribute to adjustment of Czech industry to challenges of the post-pandemic economy. 
A new national strategy for the development of digital skills is set to support adult learning, 
helping them to acquire new skills amid the progressing digitalization of the society. 

The  green  investments  should  contribute  to  Czechia’s  strategic  autonomy  and 
strengthen the resilience in view of external shocks. The increasing share of renewables in 
energy mix and energy efficiency investments are expected to reduce the share of domestic 
lignite  or  hard  coal  burnt  or  imported  fossil  fuels.  The  support  for  cleaner  energy  sources 
under the Czech plan is set to contribute to the diversification of the energy mix and therefore 
increases energy security. 

Policies for the next generation, children and the youth, such as education and skills 

The plan identifies the main socio-economic challenges for the next generation. A large 
share of children has only a limited access to childcare education. To improve labour market 
dynamics  and  working  conditions,  the  plan  puts  forward  targeted  support  for  the 
digitalisation of schools, including support for teachers’ skills and individualised actions for 
vulnerable  groups  to  overcome  the  digital  divide.  Actions  to  foster  equal  opportunities  and 
access  to  the  labour  market  include  an  amendment  of  the  Employment  Act  to  strengthen 
active labour market policies targeted at vulnerable groups.  

The  Czech  authorities  plan  to  tackle  the  educational  challenges  through  a  dedicated 
system reform and reinforced support to disadvantaged schools and pupils. The skills of 
teaching staff should improve through incentives to pursue lifelong professional development 
and  support  programmes  to  better  prepare  them  to  deal  with  heterogeneous  groups.  The 
changes  in  the  support  system  for  pupils  with  special  educational  needs  are  expected  to 
enable  all children to  develop  their  full educational  potential.  The planned investments  and 
reforms shall improve the digital skills of young people as well as to increase the awareness 
on the effects of climate change and technological transformation of the economy. 

Taking into consideration all reforms and investments envisaged by Czechia, its recovery and 
resilience  plan  represents,  to  a  large  extent  a  comprehensive  and  adequately  balanced 
response to  the economic and social situation, thereby contributing appropriately to  all six 
pillars referred to in Article 3 of the RRF Regulation, taking the specific challenges and the 
financial  allocation  of  Czechia  into  account.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.1 in Annex V to the RRF Regulation. 

4.2. Link with country-specific recommendations and the European Semester 

Czechia’s  Recovery  Plan  addresses  a  significant  subset  of  the  structural  challenges 
identified in the country-specific recommendations (CSRs) of 2019 and 2020. Naturally, 
the degree to which the Plan’s different components target — and can potentially resolve — 
the  underlying  policy  challenges  varies.  This  is  not  only  because  some  components  of  the 
Plan  carry  a  greater  importance  in  terms  of  financial  investment  and  stringency  of 
accompanying reforms, but also because the magnitude and severity of the initial challenge as 
identified  by  CSRs  differs.  Chapter  1  of  the  plan  presents  a  useful  mapping  of  CSR 
challenges onto the plan’s various sub-components. The table is both accurate and complete 
in terms of covering all CSRs as well as all relevant elements of the plan’s components. The 
table thereby illustrates the significant degree of CSR coverage achieved by Czechia’s RRP, 

37 

 
 
and  this  table  serves  as  a  useful  cross-reference  for  the  CSR  assessment  presented  in  the 
section at hand. 

Although  addressing  most  other  of  Czechia’s  CSRs  on  structural  issues  very  well,  the 
plan offers a mixed response to fiscal policy and public finances challenges. Czechia has 
achieved substantial progress in taking fiscal measures designed to support employment and 
incomes during the pandemic and providing liquidity support to companies. However, these 
measures  do  not  fall  within  the  scope  of  the  recovery  plan  properly  and,  due  to  their 
temporary nature, do not address Czechia’s long-term fiscal challenges, which primarily stem 
from healthcare and pension spending. Regarding healthcare, the plan’s sixth pillar is devoted 
to  healthcare  capacity  and  resilience  and  is  ostensibly  influenced  by  Czechia’s  experience 
during the pandemic crisis, which left its healthcare system struggling to cope with the vast 
caseload.  The  main  objective  of  component  6.1.  is  to  increase  specialist  and  emergency 
treatment,  as  further  described  below.  While  this  does  not  per  se  improve  the  long-term 
sustainability of the healthcare system, it could be argued that the RRF financing of a hitherto 
unmet need for greater healthcare capacity prevents unanticipated healthcare spending shocks 
further down the line. Furthermore, the preventive care initiatives included in component 6.2, 
especially those relating to cancer prevention, should be regarded as a medically sound and 
cost-effective way to prevent cancer progression and the associated large human and financial 
costs.  Turning  to  the  pension  system,  the  plan  restricts  itself  to  only  mentioning  recent 
legislative and administrative changes regarding its pension system and does not present any 
measures specifically dedicated to the pension system.  

The  plan  presents  a  comprehensive  and  forceful  response  to  the  challenges  facing  the 
healthcare  sector.  Czechia’s  recovery  plan  presents  under  component  6.1  a  number  of 
reforms and investments that primarily aim at increasing the treatment and response capacity 
of the healthcare system, including by investing in new rehabilitation and specialist treatment 
facilities.  Reforms  to  the  medical  and  care  training  system  are  designed  to  improve  staff 
retention,  skill  levels  and  organisational  practices  in  the  area  of  knowledge  and  skill 
management  for  the  healthcare  sector.  Component  6.1  further  recalls  Czechia’s  ongoing 
efforts  to  rationalise  primary  care  provision  through  the  primary  care  reform  programme, 
which is likely to improve the cost-effectiveness of the healthcare system and stem long-term 
spending  pressures.  However,  this  is  primarily  supported  through  cohesion  funding,  and 
hence cannot be regarded as an integral part of the recovery plan. Component 6.2 presents a 
comprehensive  cancer  treatment  initiative  comprising  large-scale  investment  as  well  as 
cancer prevention programmes that can respond to the country’s specialist treatment needs as 
well  as  potentially  establish  it  as  a  centre  of  international  excellence  in  oncology. 
Nevertheless,  attention  will  be  to  gauge  possible  effects  on  patient  access  as  care 
centralization  may  entail  longer  traveling  distances  for  selected  patient  groups  and  their 
relatives.  Finally,  components  1.1.  and  1.2  jointly  foresee  the  further  development  of  an 
eHealth  system  that  ensures  broad  coverage  of  providers  and  patients,  also  ensuring  its 
interoperability, and application for prescriptions and diagnostic services.  

Challenges related to employment and labour market participation are addressed.  The 
plan  dedicates  component  3.3  to  the  modernisation  of  employment  services  and  labour 
market development, which – at a total RRF funding volume of EUR 886 million – represents 
the second-largest component of the Czech plan. In view of the child-care related obstacles to 
employment of women, the plan targets in particular the upgrading of childcare facilities and 

38 

 
 
investments  and  reforms  in  the  area  of  education  and  training  and  continuous  vocational 
training, as well as an upgrade to the social services network. 370 existing childcare facilities 
are planned to be renovated or extended, and 435 new nurseries are planned to be constructed 
under  the  plan.  This  should  meaningfully  extend  the  capacity  of  the  childcare  system  for 
children  aged  between  6  months  and  3  years  and  should  thereby  increase  opportunities  for 
parents  (typically  women)  to  return  to  the  active  labour  market  earlier.  Employment 
difficulties  of  disadvantaged  groups  and  jobseekers  are  likely  to  be  improved  through  the 
plan’s  intended  development  of  a  retraining  and  continuous  professional  training  network, 
however a specific focus on NEETs is missing. This network will involve social partners and 
aims at  expanding and coordinating better the supply of vocational  and re-training  courses, 
both  through  expended eligibility of participants  and a better promotion  of training courses 
with a particular focus on digital skills in the context of challenges posed by the transition to 
Industry 4.0. 130.000 people should be skilled and trained to  gain competencies needed for 
digital transition.  

The plan presents ambitious proposals in the area of education and training. Component 
3.1  foresees  a  comprehensive  curricula  reform  regarding  digital  skills  and the upgrading of 
digital  technology  and  equipment.  In  particular,  teaching  materials  and  training  for  IT  and 
digital  skills  classes  will  be  developed  and  made  available  to  all  schools,  while  the 
investment  side  of  the  component  the  aim  is  for  at  least  9260  schools  to  be  equipped  with 
basic and advanced digital technologies, and for mobile and distance learning technologies to 
be accessible to a large proportion of students. Component 3.2 envisages, among reforms to 
the  distance  learning,  the  renewal  of  study  programmes  and  adaptation  to  new  forms  of 
learning in the higher education and training system; the improvement of teachers’ skills and 
competences  in  working  with  heterogenous  groups;  as  well  as  targeted  support  to 
disadvantaged schools and pupils. This should contribute to reducing educational inequalities 
and improve the quality and labour market relevance of the education and training system.   

The  plan  represents  a  welcome  response  to  the  Czechia’s  challenges  in  the  transport 
investment domain. Component 2.1 is entirely devoted to safe and sustainable transport and 
ranks  as  the  largest  individual  components  in  the  plan  due  to  its  heavy  investment  in  an 
expanded,  more  interconnected,  safer  and  an  increasingly  electrified  rail  network.  While 
many  of  these  investments  are  principally  targeted  at  shifting  freight  traffic  away  from  the 
road and onto the rail, the component also plans to invest into making urban mobility more 
environmentally friendly and safer, for instance by investing into cycle paths and barrier-free 
pedestrian walkways. Furthermore, component 2.4 foresees investments into environmentally 
friendly individual and public mobility. This includes the creation of around 4 700 charging 
points for electric vehicles, as well as the financing of around 4 500 alternative fuel vehicles 
for  business.  Given  the  congestion  and  air  quality  problems  in  the  capital  city  Prague,  the 
plan also includes the acquisition of a new fleet of electric buses and trams, which represents 
the single largest measure in the component. 

The  plan  tackles  the  problem  of  poor  digital  infrastructure  through  wide-ranging 
reforms  and  investments.  Digital  infrastructure  challenges  are  comprehensively  addressed 
in component 1.3, which proposes significant investments into very high-capacity networks 
(VHCN)  that  allow  expanded  and  faster  internet  connectivity  for  residents,  entrepreneurs, 
public administrations, particularly in less developed or rural regions that stand in need of a 
better  provision  of  digital  services  and  business  opportunities.  Furthermore,  the  component 

39 

 
 
also  foresees  the  development  of  5G  networks,  particularly  in  rural  areas,  both  through 
reforms and investment. 

Czechia  is  envisaging  far-reaching  measures  in  support  of  the  green  transition  and 
energy  efficiency.  Components  2.2,  2.3  and  2.5  all  deal  with  challenges  related  to  the 
transition  to  a  low-carbon  and  energy-efficient  society.  Collectively,  these  components 
account  for  more  than  EUR  1,2  billion,  thus  making  them  a  major  building  block  of 
Czechia’s RRP. Key measures include the renovation of public buildings in order to reduce 
their  energy  consumption,  the  promotion  and  funding  of  solar  power  generation,  and  the 
replacement  of  highly  polluting  and  carbon-intensive  domestic  heating  systems.  Taken 
together,  the  energy  savings  and  air  quality  improvements  are  likely  to  be  of  a  significant 
scale, and the scale of the plan’s measures in this respect indeed deserves the description of 
being ‘focussed on energy transition’ (as required by the 2019 CSR wording). 

Czechia  has  been  making  preliminary  progress  in  improving  governance  and  anti-
corruption aspects of its public administration. Concerning the adoption of pending anti-
corruption  measures,  the  plan  dedicates  component  4.3  to  reforms  aimed  at  preventing 
corruption. These include the adoption of the pending laws on lobbying and the protection of 
whistleblowers  being  in  line  with  the  related  EU  Directive,  as  well  as  awareness-raising 
campaigns, and legislative amendments aimed at defining more effective selection criteria for 
judges  and  a  better  regulation  of  their  secondary  activities.  While  no  budgetary  costs  are 
attached  to  these  reforms  under  the  RRP,  the  reforms  can  be  considered  as  contributing  to 
addressing the anti-corruption challenges as set out in CSR1. 

Investment-focused aspects of public administration and the business environment are 
likely  to  see  a  change  for  the  better  thanks  to  measures  incorporated  in  the  plan. 
Czechia was  recommended to  reduce the administrative burden on investment and promote 
more  quality-based  competition.  In  response  the  plan  puts  forward  several  measures  under 
component  1.6  on  digitalising  the  procedure  for  granting  construction  permits,  as  well  as 
under  component  4.1  on  systemic  support  to  public  investment.  The  simplification, 
centralisation  and  digitalisation  of  the  construction  planning  system  as  envisaged  by 
measures under component 1.6 is estimated, according to assessments presented in Czechia’s 
RRP,  to  shorten  the  average  approval  procedure  by  between  2  and  4  years.  With  this 
permitting procedure being a major factor in the commencement and expansion of business 
operations,  and  a  frequently  identified  bottleneck  to  investment  and  entrepreneurship,  the 
impact  of  successful  implementation  of  these  measures  may  be  transformative  while  at  the 
same time it has to be ensured that the public rights are ensured in line with the applicable EU 
legislation  to  balance  different  public  interests.  The  plan  further  encompasses  under 
component  4.1  measures  aimed  at  building  administrative  capacity  to  aid  the  delivery  of 
public investment projects, including those aimed at facilitating the twin transitions, as well 
as  working  towards  establishing  a  set  of  public-private  partnership  (PPP)  projects;  the  plan 
also notes the application of new selection methodologies in public procurement in order to 
better reflect quality (and green) criteria, as well as public procurement training courses  for 
contractors and suppliers to promote the new public procurement standards.  

Czechia’s  RRP  includes  links  to  the  national  strategic  framework  to  foster  research, 
development  and  innovation,  including  the  cooperation  between  public  and  private 
entities. The research and innovation challenge facing Czechia is primarily tackled within the 
Innovation  Strategy  2019-2030,  which  –  although  being  updated  regularly  –  fundamentally 

40 

 
 
predates  the  formulation  of  Czechia’s  RRP  and  the  National  Research,  Development  and 
Innovation Policy for the period 2021+ strategic framework. However, various research and 
innovation-relevant  measures  are  presented  within  the  plan  itself.  The  most  comprehensive 
and  financially  largest  measures  are  to  be  found  in  Component  5.2,  which  proposes  an 
innovation-focused  funding  system  for  research  projects,  and  which  (partly)  relies  on  RRF 
funding and component 5.1, which aims to enable excellent research in selected health areas, 
and which fully relies on RRF funding. Component 5.2 specifically aims at increasing R&D 
outputs and their application in businesses, as well as encouraging cooperation between the 
private sector and research organisations, including international cooperation. Component 1.4 
largely deals with digital innovation measures, offering financial support for innovative firms 
including pre-seed, seed and start-ups, as well as foreseeing specific support for strategic and 
future growth areas. Finally, component 4.5 presents a comprehensive support scheme for the 
severely hit cultural and creative sectors, which includes soft innovative services such as web 
design, products and services, graphic design or marketing strategies.  

Czechia is planning an array of measures to meet the recommendation to make greater 
use  of  financial  instruments  to  support  SMEs.  The  Czech  government  made  ample 
liquidity support available to companies – including many SMEs – during the acute phase of 
the  crisis,  which  helped  relieve  the  worst  pressures  on  companies’  cash  flow  and  working 
capital. Under component 4.2, the plan proposes to broaden the scope of the ČMZRB Group 
as  a  national  development  bank  by  supporting  Czech  companies  with  the  use  of  newly 
created quasi-equity instruments including for SMEs and innovative companies. Since these 
new financial products are typically structured as so-called ‘mezzanine’ instruments that rank 
below debt in a firm’s capital structure and can therefore be useful to use in situations where 
fast-growing  companies  need  to  raise  capital  in  a  flexible  manner  or  when  successful 
companies  are  taken  over  by  new  owners.  Given  the  somewhat  underdeveloped  capital 
market  in  Czechia  and  the  wider  region,  the  proposed  expansion  of  the  range  of  financial 
products  available  for  Czech  companies  can  be  regarded  as  a  market-completing  initiative 
that corresponds well to the challenge originally identified in the policy recommendation to 
Czechia.  

Extent of country-specific challenges and prospects for their resolution  

Overall,  when  taking  into  account  also  parallel  initiatives  by  the  Czech  government, 
including  those  funded  through  national  and  other  EU  facilities,  only  the  long-term 
fiscal  sustainability  aspects  are  left  under-addressed  by  measures  detailed  in  the  plan. 
Moreover, the plan’s priorities appear to be well-balanced and sufficiently comprehensive to 
satisfactorily address a significant number of Czechia’s country-specific recommendations. 

Bearing  in  mind  the  persistence  of  Czechia’s  various  structural  challenges  identified  in  the 
above CSRs, the plan appears to place broadly the right emphasis on the different reform and 
investment  needs.  Generally  speaking,  the  (horizontal)  challenge  of  ensuring  a  swift  and 
smooth  green  and  digital  transition  appears  to  be  tackled  with  the  necessary  determination 
and  arsenal  of  measures  in  Czechia’s  RRP.  Long-standing  challenges  in  the  area  of 
education,  childcare,  healthcare,  as  well  as  research,  development  and  innovation  also  met 
with  comprehensive  measures  suited  to  ensure  a  near-resolution  of  the  most  serious 
shortcomings. However, in  case of  research  and  innovation,  it remains essential to  enhance 
the effectiveness of the investments by comprehensive systemic reforms. While other crucial 

41 

 
 
challenges such as those related to Czechia’s business environment and public administration 
are also targeted in the plan, the extent to which even a fully successful implementation of all 
corresponding  components  could  satisfactorily  address  the  underlying  challenges  is 
somewhat uncertain. The focus on enhancing the efficiency of the public administration by a 
better coordinated system for the integration of scientific evidence inside the administration is 
seen as a relevant contribution to addressing the complex challenges, including the green and 
digital transition, as  well resilience to future complex issues. Genuine advances in the fight 
against  corruption  are  undoubtedly  within  reach  and  are  likely  to  be  accelerated  by  the 
measures  proposed  in  the  Czech  RRP  but  will  further  require  a  certain  shift  of  societal 
attitudes  and  cultural  and  professional  norms  that  may  not  be  susceptible  to  official  policy 
influence. 

The plan represents a comprehensive and adequate response to Czechia’s economic and 
social situation. The pandemic has left considerable scars on both the healthcare system, the 
labour  market  and  the  education  sector,  as  well  as  on  the  wider  economy.  Czechia’s 
challenges to ensure the twin green and digital transition in effect pre-date the pandemic and 
are  adequately  covered  in  the  various  components,  but  aspects  thereof  gain  a  particular 
importance in view of the post-Covid economic and social situation. For instance, the focus 
on  digital  skills  and  digital  learning  and  working  methods  will  help  Czechia  adapt  to  new 
work  and  education  patterns  that  may  persist  post-Covid.  Furthermore,  infrastructure 
improvements  in  both  transport  and  digital  connectivity  can  help  level  out  regional 
inequalities,  the  polarising  effect  of  which  has  also  been  visible  in  economic  and  social 
developments during the crisis. Finally, measures to increase labour market participation and 
employment can help to reduce the scar on employment levels left by the crisis. 

Czechia’s  economic  growth  potential  is  likely  to  be  boosted  in  a  sustainable  manner 
through  the  measures  contained  in  the  plan.  As  section  4.3  in  this  Staff  Working 
Document shows, both the direct demand effects from higher investment spending financed 
by the RRF, as well as the productivity-effects from such investments and reforms are likely 
to increase Czechia’s growth potential on a sustained basis as presented in section 4.3 below.  

Taking  into  consideration  the  reforms  and  investments  envisaged  by  Czechia,  its  recovery 
and resilience plan is expected to contribute to effectively a significant subset of challenges 
identified  in  the  country-specific  recommendations,  or  challenges  in  other  relevant 
documents  officially  adopted  by  the  Commission  under  the  European  Semester,  and  the 
recovery  and  resilience  plan  represents  an  adequate  response  to  the  economic  and  social 
situation of Czechia. This would warrant a rating of A under the assessment criterion 2.2 in 
Regulation. 
Annex 

RRF 

the 

to 

V 

42 

 
 
Table 5: Mapping of country challenges identified in 2019-20 country-specific recommendations and the 26 components of the Czech RRP 

CSRs 
(2019-
2020) 

2019.1.
1, 

2020/ 

2020.1.
2  

Country 
challenges 

(as identified in 
Section 2) 

Fiscal policy and 
long-term 
sustainability of 
health and 
pensions systems  

Health care and 
long-term care: 
strengthen 
resilience of 
health system, 
staffing, care 
integration and 
eHealth  

Foster 
employment of 
women and 
disadvantaged 
groups, incl. 
through childcare 

2019.2.
1, 
2020.2.
1 

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

○  ○ 

  ○  ○ 

Fiscal sustainability 

●  ● 

○ 

  ○ 

○ 

  ○ 

  ●  ● 

Labour market and social policies 

● 

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country 
challenges 

(as identified in 
Section 2) 

provision; active 
labour market 
policies  

Quality and 
inclusiveness of 
education and 
training system, 
incl. digital skills 

Country 
challenges 

(as identified in 
Section 2) 

a) Sustainable 
transport  

b) High-capacity 
Digital 
infrastructure  

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

●  ●  ● 

○ 

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

CSRs 
(2019-
2020) 

2019.2.
2, 
2020.2.
2,  

CSRs 
(2019-
2020) 

Policies supporting investment in digital and green transition and in particular, in the following areas 

2019.3.
1, 
2020.3.
7 

2019.3.
2, 
2020.3.
5 

● 

● 

  ○ 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country 
challenges 

(as identified in 
Section 2) 

c) Low carbon 
transition and 
energy efficiency 

CSRs 
(2019-
2020) 

2019.3.
3, 
2020.3.
6 

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

●  ● 

● 

● 

● 

45 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country 
challenges 

(as identified in 
Section 2) 

Adopt pending 
anti-corruption 
legislation  

Reduce 
administrative 
burden on 
investment and 
improve e-
government 

Support more 
quality-based 
competition in 
public 
procurement  

CSRs 
(2019-
2020) 

2019.1.
2 

2019.3.
4, 
2020.3.
2 

2019.3.
5 

Remove barriers 
to a fully 
functioning 
innovation 
ecosystem and 
improve public 

2019.3.
6 

2020.3.
8 

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

Public administration and business environment 

● 

  ● 

●  ● 

  ● 

  ○ 

Broader functioning of economy 

●  ○ 

○ 

● 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country 
challenges 

(as identified in 
Section 2) 

CSRs 
(2019-
2020) 

private R&D 
cooperation 

Front-load 
mature public 
investment 
projects and 
promote private 
investment 

Support SMEs 
through use of 
financial 
instruments and 
ensure access to 
finance for 
innovative firms  

2020.3.
3, 
2020.3.
4 

2020.3.
1, 
2020.3.
8 

C
1
.
1

C
1
.
2

C
1
.
3

C
1
.
4

C
1
.
5

C
1
.
6

C
2
.
1

C
2
.
2

C
2
.
3

C
2
.
4

C
2
.
5

C
2
.
6

C
2
.
7

C
2
.
8

C
2
.
9

C
3
.
1

C
3
.
2

C
3
.
3

C
4
.
2

C
4
.
3

C
4
.
4

C
4
.
5

C
5
.
1

C
5
.
2

C
6
.
1

C
6
.
2

Public administration and business environment 

●  ○ 

  ● 

○ 

○  ○  ○ 

● 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.3. Growth  potential,  job  creation,  economic,  institutional,  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence 

Fostering economic growth and jobs 

The  implementation  of  the  Czech  recovery  and  resilience  plan  is  expected  to  contribute 
significantly  to  economic  growth  and  job  creation  in  Czechia.  RRF-funded  public 
expenditures  should  provide  a  boost  to  aggregate  demand  in  the  short  to  medium  term, 
improving  the  cyclical  position  of  the  Czech  economy,  and  thereby  mitigating  the  adverse 
economic effects of the COVID-19 crisis. In the long run, investments together with the planned 
structural  reforms  would  help  address  the  current  growth  challenges  faced  by  Czechia.  This  is 
expected  to  facilitate  the  country’s  transition  to  a  knowledge-based  economic  model,  which  is 
more  focused  on  high  value-added  activities  and  remains  competitive  amid  automation  and 
digital change. Implementing the plan is therefore expected to raise potential output and to have 
a lasting impact on the economic performance of Czechia. 

Non-  repayable  financial  support  from  the  RRF  amounts  to  around  3.25%  of  pre-crisis 
GDP,  which  Czechia  plans  to  spend  mainly  on  public  investments  spread  over  6  years 
between 2021 and 2026. These expenditures constitute a sizable fiscal  stimulus, as  a result of 
which  Czech  authorities  estimate  GDP  to  be  0.5%  higher  in  the  medium  term  relative  to  the 
counterfactual scenario without the RRF. This short to medium term boost to aggregate demand 
should  speed  up  the  recovery  of  the  Czech  economy  from  the  COVID-19  crisis.  The 
Commission’s own estimates, which include spillover effects, are reported in Box 2. 

The  transmission  channels  of  higher  public  investment  spending  to  the  broader  economy 
are manifold. In addition to the direct effect of more public expenditures on GDP, there is also 
an  indirect  response  of  the  economy  via  influencing  private  spending  decisions,  which  will 
determine the size of the fiscal multiplier.11 In the current environment of depressed demand, the 
usual  effect  of  crowding  out  private  expenditures  via  higher  real  interest  rates  is  likely  to  be 
muted,  given  the  expectations  of  continued  monetary  policy  support  in  the  euro  area  for  the 
coming years. In addition, by expanding the capital stock of the economy, public investment can 
raise the productivity of the private sector,  and thereby  crowd in  private  investments.12 Higher 
public  spending  raises  incomes  in  general,  while  higher  productivity  also  contributes  to  faster 
real  wage  growth,  which  can  further  support  household  consumption.  This  is  even  more  so  if 
households tend to consume a large fraction of their earnings, which bodes well for Czechia with 
household saving rates below the EU average. However, in the case of a highly open economy 

11 The fiscal multiplier gives the amount of increase in GDP induced by an additional euro of public spending. 

12 Moreover, the real exchange rate appreciation usually following an increase in government consumption is also 
mitigated in the case of public investments which expand supply capacities, thereby containing inflationary 

48 

 
 
                                                           
 
 
like  Czechia,  these  multiplier  effects  are  likely  to  be  attenuated,  as  some  of  the  increase  in 
aggregate  spending  will  “leak  out”  via  imports  instead  of  being  directed  at  domestically 
produced goods. 

The  plan  contributes  to  potential  output  also  by  speeding  up  the  recovery  from  the 
COVID-19  crisis,  whereby  it  could  prevent  long-term  scarring  due  to  hysteresis  effects, 
prolonged unemployment, and rising bankruptcies. Therefore, permanent economic damages 
from  the  pandemic  could  be  mitigated.  The  ability  to  reach  these  objectives,  however,  is 
surrounded by considerable risks.  

The  Czech  plan  identifies  areas  in  which  Czechia  still  needs  to  catch  up  to  ensure  its 
convergence  towards  the  euro  area  and  sets  out  measures  and  reforms  to  address  these 
issues.  Technological  and  allocative  inefficiency  are  among  these  areas.  In  the  long  run, 
structural reforms contained in the Czech RRP are expected to entail a GDP gain of at least 0.6% 
by 2040 according to the Czech authorities (0.4% according to the Commission), relative to the 
counterfactual  scenario  without  RRF.  But  whether  the  measures  will  manage  to  improve  these 
indicators to the assumed extent is highly uncertain. Nevertheless, the reforms certainly aim in 
the  right  direction  of  trying  to  address  the  weaknesses  of  Czechia’s  economy,  as  detailed  in 
Section 2.2. of this document. 

Box 2: Stylised NGEU impact simulations with QUEST – Czechia 

Model simulations conducted by the Commission using the QUEST model show that the 
economic impact of the NGEU in Czechia could lead to an increase of GDP of between 
0.8% and 1.2% by 2026.13 After 20 years, GDP could be 0.4% higher. Spillovers account 
for an important part of such impact.  

According to  these simulations, this would translate into up to  18,000 additional jobs. Cross 
border (GDP) spillovers account for 0.3 pps in 2026, showing the value added of synchronised 
expenditure  across  Member  States  (line  2  in  Table  6).  Even  in  a  scenario  with  a  lower 
productivity of NGEU funds, it would still lead to a significant impact (line 3).14  

Table  6:  QUEST  simulation  results  (%-deviation  of  real  GDP  level  from  non-NGEU 
case, linear disbursement assumption over 6 years) 

Scenario 

2021 

2022  2023  2024  2025 

2026  2027  2028  2029  2030  2040 

pressures. The resulting more competitive real exchange rate is beneficial for the export sector as well, further 
raising the fiscal multiplier. 
13  RRF  amounts  to  roughly  90%  of  NGEU,  which  also  includes  ReactEU,  Horizon,  InvestEU,  JTF,  Rural 
Development and RescEU. 
14 Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 

49 

 
 
                                                                                                                                                                                           
 
Baseline 

   of which 
spillover 

Low 
productivity 

0.3 

-0.3 

0.9 

0.0 

1.0 

1.1 

1.1 

0.2 

0.3 

0.3 

1.2 

0.3 

0.9 

0.3 

0.6 

0.6 

0.6 

0.4 

0.3 

0.3 

0.2 

0.1 

0.2 

0.6 

0.7 

0.7 

0.7 

0.8 

0.5 

0.2 

0.2 

0.2 

0.1 

This stylised scenario does not include the possible positive impact of structural reforms, 
which  can  be  substantial.  A  model-based  benchmarking  exercise  shows  that  undertaking 
structural  reforms  that  would  result  in  halving  the  gap  vis-à-vis  best  performers  in  terms  of 
indicators of structural reforms could raise Czechia GDP by 12% in 20 years' time compared 
to 11% for the EU average.15  

Due  to  the  differences  in  the  assumptions  and  methodology,  the  results  of  this  stylised 
assessment  cannot  be  directly  compared  to  the  numbers  reported  in  chapter  4  of 
Czechia’s RRP.  

Czechia’s significant automotive manufacturing is heavily exposed to challenges posed by 
automation and the green transition. By supporting the transition to electric technologies, and 
providing  financial  assistance  for  decarbonisation  of  industry,  measures  under  the  “Green 
economy”  policy  area  of  the  plan  contribute  towards  keeping  the  sector  competitive. 
Encouraging R&D and innovation, improving the skills of the labour force and promoting digital 
technologies are also among the plan measures designed to help the sector keep high value-added 
jobs in an era of automation. 

The  plan  aims  to  increase  R&D  spending  and  innovation  by  boosting  the  innovation 
capacity  of  domestic  businesses,  and  at  improving  public-private  cooperation  within 
Czechia’s innovation ecosystem. EU funds have contributed significantly to the development of 
research  and  innovation  ecosystem  in  the  past  period  and  have  helped  to  develop  research 
infrastructures and R&I capacities in both the public and private sectors. Total R&D expenditure 
in  Czechia has been growing for a long time and is  close to  the EU average in  terms  of GDP. 
Additional  R&D  investments  are  expected  to  contribute  partly  to  resilience  building  and 
emergency  preparedness  of  health  research  and  partly  to  the  implementation  of  some  other 
European  recommendations  and  initiatives.  These  include  refurbishment  and  modernisation, 
upskilling, scientific education and management and internationalisation. Through R&D support 
the plan aims at boosting the innovation capacity of businesses, notably domestic SMEs, and at 
improving private-public cooperation within Czechia’s innovation ecosystem. 

15  Varga,  J,  in  't  Veld  J.  (2014),  “The  potential  growth  impact  of  structural  reforms  in  the  EU:  a  benchmarking 
exercise", European Economy Economic Papers no. 541.  
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf 

50 

 
 
                                                           
The  plan  places  an  emphasis  on  improving  human  capital  and  raising  the  skill  level  of 
Czech citizens, an area where the country has significant weaknesses which prevent it from 
fulfilling  its  economic  potential.  Reforming  the  educational  curriculum  and  strengthening 
teacher  training  could  help  the  Czech  pupils  to  improve  their  performance.    Focus  on  digital 
education could lead to better availability of workers with advanced digitals skills necessary for 
the further transformation of the Czech economy. Measures aiming at supporting disadvantaged 
groups  in  the  education  system  should  increase  equal  opportunities  and  improve  the  skill 
composition  of  the  Czech  workforce.  The  plan  also  includes  investments  in  upskilling  and 
reskilling of the adult population, which all together should improve the skill levels of the Czech 
present and future workforce. 

In addressing anti-corruption shortcomings in the decision-making process and the public 
administration,  the  RRP  could  also  facilitate  a  more  favourable  business  environment, 
which  is  more  conducive  to  private  investment  and  innovation.  Broadening  digital  public 
services  and  lowering  high  regulatory  barriers  for  entrepreneurs  is  expected  to  ease  the 
administrative  burden  on  businesses  and  enhance  their  competitiveness.  A  strengthened, 
legislative  anti-corruption  framework  increasing  transparency  and  a  reform  of  the  judiciary, 
would  have  a  positive  impact  on  business  uncertainty.  Such  reforms  would  support  potential 
growth  due  to  a  more  efficient  allocation  of  public  resources  as  well  as  incentives  for 
productivity growth in the private sector. 

In  summary,  the  reforms  envisioned  in  the  Czech  plan  can  be  expected  to  facilitate  the 
country’s transition to a new, more diversified economic model, based on a larger share of 
high  value-added  activities.  A  successful  implementation  of  the  RRP  could  raise  domestic 
innovation,  productivity,  and  maintain  the  competitiveness  of  the  Czech  economy,  thereby 
contributing to potential growth. 

Investment baseline 

The  public  investments  outlined  in  the  plan  are  convincingly  argued  to  be  additional  to 
what  would  have  been  the  case  in  the  absence  of  the  RRF.  This  argument  for  macro-
additionality  is  supported  by  analysis  in  the  plan  showing  that  baseline  public  investments, 
excluding those to be financed from the RRF, are forecast to be at least as high on average over 
the period of 2021-2026 as they were in 2017-2019. This makes it likely that, by coming on top 
of these investments, RRF funded spending truly contributes to economic growth and does not 
just replace otherwise planned nationally financed investments, being used only for public debt 
reduction.  According  to  information  supplied  by  the  Czech  authorities,  nationally  financed 
baseline  public  investments  (excluding  military  spending)  are  expected  to  average  over  42% 
higher in real terms between 2020 and 2026 compared to the three years preceding the pandemic. 
This corresponds to baseline investments increasing its similar share of GDP by 0.5 pps across 
the two time periods.  

Prior  to  the  pandemic  the  composition  of  public  investments  was  dominated  by  spending 
on transport infrastructure. Funds from the RRF place more emphasis on investments in the 
areas  of  health  (construction  and  renovation  of  hospitals),  and  education  (digitalisation  of 
schools, expansion of kindergarten capacities). More than a third of the funds is planned to go for 

51 

 
 
green economy measures. This includes sustainable transport investments and the promotion of 
renewable energy sources as well as measures aimed at industry decarbonisation and improving 
the  energy  efficiency  of  buildings.  Compared  to  the  pre-pandemic  baseline,  the  proportional 
impact  of RRF funds will be biggest  in  the areas of health and social  protection (expansion of 
long-term care facilities), given their relatively low base value, while the rather high spending on 
transport infrastructure constitutes only a smaller percentage increase. 

Strengthening social cohesion 

The  plan  addresses  several  social  and  territorial  challenges  relevant  for  Czechia  and  is 
expected to contribute to the implementation of the European Pillar of Social Rights. The 
plan is  targeted at  areas  where Czechia is  lagging behind,  namely:  uneven education outcomes 
including  advanced  digital  skills,  skills  shortages  and  inequalities  in  education  and  training, 
especially with regard to pupils with weak socio-economic backgrounds. The plan will address 
low  labour  market  participation  of  women  with  small  children,  social  needs  of  vulnerable  in 
terms of easier access to health screening programmes and by increased capacities in long-term 
care and investment in social care infrastructure. 

Green investments in transport, in increasing energy saving and reducing the emission of 
greenhouse  gases  and  moving  from  fossil  fuels  to  low-emission  and  zero-emission  energy 
sources  such  as  photovoltaic  energy  are  expected  to  reduce  air  pollution  and  smog, 
improving  public  health  outcomes.  Moreover,  replacing  coal-fired  boilers  with  low  carbon 
solutions in the family houses, as integral part of complex building renovation, will help reduce 
the  cost  of  green  investment  for  the  low-income  groups  and  contribute  to  alleviating  energy 
poverty.  The  investment  in  public  transport  networks  is  particularly  relevant  for  structurally 
disadvantaged regions. 

Reducing vulnerability and increasing resilience 

While no macroeconomic imbalances have been identified, Czechia  is a particularly open, 
manufacturing-centred  economy  vulnerable  to  potential  supply  chain  shocks  or 
technological  disruptions.  In  line  with  the  new  industrial  strategy  of  the  EU,  investment  into 
research and innovation and into skills have the potential to help the country to better cope with 
technological  disruptions  and  supply  chain  strategic  dependencies,  thus  building  economic 
resilience  to  accelerate  changes,  such  as  digitalisation  and  automation  trends.  These  measures 
can  also  contribute  to  reducing  Czechia’s  reliance  on  cost-competitive  export-oriented 
production  by  building  R&D  capacities  amid  a  particular  lack  of  technological  diffusion  to 
domestic  SMEs  as  well  as  fast-rising  wages.  The  strong  focus  on  the  green  transition  should 
reduce Czechia’s dependence on imported fossil fuels, cushioning the potential impact of supply 
or price shocks. This is achieved by measures to reduce energy consumption of buildings, and by 
moving  towards  more  sustainable  transport  (such  as  the  purchase  of  alternative  fuels  rolling 
stock,  or  the  development  of  infrastructure  for  e-mobility)  and  to  increasing  the  use  of  low-
emission and zero-emission energy sources. An economic vulnerability that is also addressed is 
related  to  weaknesses  in  the  construction  sector.  Swift  house  price  growth  amid  complex 
building permit procedures calls for a reform of the construction act, which is addressed in the 

52 

 
 
plan by a  reform of procedure  for  granting construction permits, including digitalisation of the 
process.  

Czechia’s  plan  includes  a  range  of  measures  in  health  and  education  policy  that  can  be 
expected  to  improve  social  resilience.  The  plan  provides  explanations  on  such  links  at  the 
plan’s level and by component. Education reforms and their particular focus on inclusiveness can 
be  expected  to  contribute  to  social  resilience,  as  e.g.  providing  more  equal  access  to 
opportunities through education and training to disadvantaged groups. Investments and reforms 
aimed  at  improving  long-term  care,  reinforcing  cancer  prevention  and  rehabilitation  care, 
developing of an e-health portal  and supporting  education in  healthcare  will increase  access  to 
health  services,  also  for  particularly  vulnerable  group  in  society.  Modernising  and  expanding 
integrated  health  and  social  services  in  compliance  with  the  principles  of  deinstitutionalisation 
and independent living will improve access to quality and affordable long-term care.  

Structural  reforms,  improved  capacities  and  digitalisation  efforts  are  set  to  strengthen 
institutional  resilience.  Here  again,  the  plan  provides  explanations  on  such  links  at  the  plan’s 
level and by component. A reformed and better equipped judiciary system will be able to better 
respond  to  the  challenges  stemming  from  the  workload  and  better  address  the  transparency 
requirements.  Digitalisation  efforts  across  institutions  –  especially  in  health  and  construction 
sectors – are set to improve efficiency and hence the ability to react swiftly and with sufficient 
resources to shocks. 

Cohesion and convergence 

The Czech plan aims to contribute to reducing social inequalities. Certain social groups are 
highly disadvantaged when it comes to labour market outcomes. The unemployment rate of 
low-skilled workers is among the highest in the EU, and this problem is particularly serious for 
low-skilled youth. A further challenge is high long-term unemployment for groups facing social 
exclusion, in particular marginalised Roma communities who face a higher risk of poverty. The 
gender employment  gap negatively affects  women. Regarding territorial  disparities, some parts 
of  Czechia  tend  to  perform  significantly  worse  than  others,  in  terms  of  various  interconnected 
labour market and social indicators, like the share of high skilled workers, long-term and youth 
unemployment, the share of population at risk of poverty, as well as disposable income. 

However,  the  plan  considers  regional  disparities  only  to  a  limited  extent  -  improving  the 
access  to  the  labour  market  of  some  disadvantaged  groups,  through  more  inclusive 
education,  more  job  opportunities  and  better  health  care  services.  For  the  latter  services, 
attention is  warranted that  the centralisation of specialised services does  not  exacerbate patient 
access  challenges  from  a  regional  cohesion  perspective.  The  primary  channel  in  the  RRP  for 
reducing  social  inequalities  is  to  enhance  access  to  quality  education  for  all,  however,  further 
efforts  are  needed  in  this  regard.  Measures  for  more  inclusive  education  via  desegregation  of 
schools and in particular access of disadvantaged groups are missing in the plan.  

Investments  related  to  the  green  transition  in  the  RRP  exert  their  beneficial  effects  on 
social  and  territorial  cohesion  mainly  via  creating  new  and  more  accessible  job 
opportunities.  The  modernisation  of  rail  infrastructure  and  investments  into  sustainable 

53 

 
 
transport  links  are  expected  to  help  connecting  remote  regions  to  economic  centres  and  to 
facilitate  the  commuting  of  jobseekers  to  where  employment  opportunities  are  more  abundant, 
thereby  improving  the  labour  market  outcomes  of  less  developed  regions.  In  addition,  the 
construction  projects  related  to  the  green  infrastructure  investments  would  provide  another 
source of job opportunity for medium skilled workers. Assistance for renovating and increasing 
the  energy  efficiency  of  family  homes  would  help  addressing  the  energy  poverty  prevalent 
among poor households. 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Czechia,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation, and economic, social and institutional resilience of the Member State, on contributing 
to the implementation of the European Pillar of Social Rights, including through the promotion 
of  policies  for  children  and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the 
COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial  cohesion  and 
convergence within the Union. This would warrant a rating of A under the assessment criterion 
2.3 of Annex V to the RRF Regulation. 

Box 3: Employment and social challenges in light of the Social Scoreboard accompanying 
the European Pillar of Social Rights 

Czechia  performs  well  on  most  indicators  of  the  Social  Scoreboard  supporting  the 
European  Pillar  of  Social  Rights,  yet  some  challenges  remain.  Despite  the  COVID-19 
crisis, the employment rate is among the highest in the EU and the unemployment rate among 
the lowest (79.6% and 3% respectively in Q4-2020). This is in part due to more than 1 million 
employees  having  been  supported  until  April  2021  by  the  new  short-time  work  scheme 
“Antivirus”. Yet,  there is scope for  enhancing the labour market  participation of women and 
vulnerable  groups.  The  crisis  also  risks  increasing  the  thus  far  comparatively  low  at  risk  of 
poverty or social exclusion rate. 

The  gender  employment  gap  remains  relatively  high.  It  stood  at  15.6  pps  in  Q4-2020, 
against 11.2 pps in the EU. The number of children aged less than 3 years in formal childcare 
has  followed  a  steady  but  weak  increase  over  the  last  decade,  reaching  6.3%  in  2019,  but 
remaining  far  below  the  EU  average  (35.3%).  Estimates  point  at  36,710  additional  places 
needed  to  satisfy  the  demand  in  the  school  year  2019-2020.  The  provision  of  quality  and 
affordable  childcare  can  help  to  improve  labour  market  outcomes  for  caregivers,  most  often 
women.  The  unadjusted  gender  pay  gap  (18.9%  in  2019)  is  also  well  above  the  EU  average 
(14.1%). 

There  is  scope  for  strengthening  social  protection  and  inclusion  and  addressing 
educational inequalities.  While comparatively low, the share of people at risk of poverty or 
social  exclusion  (12.5%  in  2019)  remains  largely  concentrated  in  some  localities  and  within 
some population groups, namely single parents, the elderly, people with disabilities and Roma. 
This  may  be  partially  due  to  social  transfers  (excluding  pensions)  that  are  not  yet  fully 

54 

 
 
 
effective at getting certain groups of people out of poverty.    
In particular, the COVID-19 crisis has had a negative impact on single-parents (STEM survey, 
2021)  and  on  educational  outcomes  of  vulnerable  groups,  such  as  Roma,  which  may  impact 
their  early  school  leaving  rates  going  forward  (Czech  School  Inspection,  2021).  Czechia 
maintains a good overall performance in education; however, socio-economic background has 
a strong influence on educational outcomes. Among students from disadvantaged background 
37.7% are underachievers in reading, but only 8% from advantaged backgrounds are  – a gap 
above the EU average (26.9 pps). Disadvantaged and advantaged students are concentrated in 
different schools to a higher extent than on average in the EU and geographical disparities are 
large.   

The  RRP  addresses  several  employment  and  social  challenges  in  Czechia  that  are 
relevant  for  the  implementation  of  the  Pillar.  To  improve  labour  market  dynamics  and 
working  conditions,  the  plan  puts  forward  targeted  support  for  the  digitalisation  of  schools, 
including  support  for  teachers’  skills  and  individualised  actions  for  vulnerable  groups  to 
overcome  the  digital  divide.  While  the  financial  support  is  expected  to  provide  a  welcome 
boost  to  disadvantaged  schools,  marginalised  groups,  such  as  Roma,  could  benefit  from 
accompanying support measures to achieve a more inclusive education. Actions to foster equal 
opportunities and access to the labour market include an amendment of the Employment Act to 
strengthen active labour market policies targeted at vulnerable groups. An overarching reform 
scaling  up  of  existing  and  proposed  upskilling  and  in-work  training  actions  could  build  a 
stronger  momentum  for  adult  learning.  While  some  targeted  upskilling  and  in-work  training 
actions  are  proposed,  the  plan  does  not  foresee  a  more  ambitious  and  overarching  reform 
scaling  up  existing  strategies.  The  foreseen  investment  in  community-based  and  home  care 
social services, in particular targeted at elderly people, will be coupled with a new legislation 
on long-term care (LTC); including a mapping of LTC needs as an intermediate milestone.  

55 

 
 
of 

the 

early 

participation 

Steps  have  been  taken  to  improve  the 
labour  market 
of 
women, in particular by increasing the 
childhood 
availability 
education  and  care  (ECEC)  facilities. 
The right  to  a place in  kindergarten was 
given  to  4-year-old  children  as  from 
2017 and to 3-year-old children in 2018. 
Also, the flexibility of parental leave has 
planned 
improved.  However, 
obligation for 2-year-olds was cancelled. 
Despite  the  effort,  supported  mostly  by 
ESF,  Czechia  remains  among  the  worst 
performers  regarding 
the  number  of 
children under 3 in ECEC. While further 
childcare  places  are  planned 
to  be 
provided  with  the  support  of  national 
funding  and  the  RRF,  ESF+  and  ERDF, 
the  legislation  which  would  support  the 
sustainability  of  childcare  provision  has 
been  delayed  and  new  developments 
require  close  monitoring.  However,  the 
this 
reform  milestone 
legislation  has  been  introduced  as  a  part 
of the plan.   

introduce 

to 

4.4. The principle of ‘do no significant harm’ 

Czechia  has  conducted  a  Do  No  Significant  Harm  (DNSH)  assessment  of  all  measures 
included in the plan in line with the Commission’s technical guidance on the application of 
DNSH under the RRF Regulation (2021/C 58/01). It covers the six environmental objectives, 
namely  (1)  climate  change  mitigation,  (2)  climate  change  adaptation,  (3)  sustainable  use  and 
protection  of  water  and  marine  resources,  (4)  circular  economy,  (5)  pollution  prevention  and 
control,  and  (6)  protection  and  restoration  of  biodiversity  and  ecosystems.  Each  DNSH 
assessment  follows  a  two-step  approach.  The  first  step  assesses  whether  there  is  a  risk  that  a 
measure  could  do  significant  harm  to  one  or  more  of  the  environmental  objectives.  In  cases 
where  the  analysis  identifies  a  risk,  a  more  detailed  assessment  is  performed.  Based  on  the 
information provided by the Czech authorities, apart from  the investments  to  be funded by the 

56 

 
 
 
national  sources  (irrigation  extension  in  particular),  no  measure  for  the  implementation  of 
reforms and investments projects included in Czechia’s recovery and resilience plan is expected 
to do significant harm to the environmental objectives. Several commitments include that DNSH 
requirements  shall  be  respected,  being  enshrined  in  the  design  of  measures,  and  reflected  in 
various milestones and targets. 

The  potential  harmful  environmental  and  climate  impact  of  all  relevant  measures  is 
addressed through appropriate assurances that the applicable criteria are to be respected. 
The  increase  in  the  use of  biomass  in  heat  and  electricity  production  is  expected  to  be tackled 
through a reform consisting of an assessment of the trajectories of sustainable use of bioenergy 
and supply of biomass in Czechia and its impacts on Land Use, Land-Use Change and Forestry 
sinks  and  biodiversity  as  well  as  impact  on  air  quality  for  the  period  2020-2030.  Building 
renovations will comply with requirements linked to the boiler replacement and will ensure that 
at least 70 % of construction and demolition waste is reused or recycled. Vehicles will meet the 
applicable emission standards. A number of these criteria are also reflected in the milestones and 
targets  through  references  to  relevant  criteria  and  thresholds  (e.g.  the  revision  of  waste 
legislation,  the  mezzanine  financial  instrument,  biomass  projects  to  achieve  compliance  with 
RED  II  Sustainability  criteria  and  adoption  of  sustainability  criteria  for  RES  as  mentioned 
above). 

Component 2.6 - Nature protection and adaptation to climate change - which include flood 
protection,  small  watercourses  and  water  reservoirs,  require  taking  specific  precautions 
from a climate adaptation and environmental point of view. Czechia is committed to ensure 
compliance  with  EU  environmental  law,  namely  the  Water,  Habitats  and  Birds  and 
Environmental Impact Assessment and Strategic Environmental Impact Directives. Investments 
to irrigation are not subject to RRF support. 

DNSH  requirements  apply  also  horizontally  to  similar  measures  across  a  number  of 
components.  The  plan  includes  the  commitment  that  conditions  resulting  from  DNSH 
compliance will apply in the preparatory stage (e.g. tender specifications) as well as during the 
implementation of buildings renovation (e.g. in component 2.5 for residential buildings), as well 
as  a  number  of  other  components  covering  for  renovation  of  public  buildings).  Coal  based 
boilers can be replaced by higher efficient and low emission gas boilers only as part of a larger 
renovation programme. This investment will aim not only at reducing greenhouse gas emissions 
but also air pollution, which is particularly problematic in some regions in Czechia. The IT tools 
are  yet another measure, which is  appearing in  a number of  components  and procurement will 
need  to  ensure  compliance  with  green  public  procurement  criteria,  including  ensuring  energy-
efficient criteria for the hardware selection. 

For  cars  and  buses  including  special  purpose  vehicles  (such  as  social  service  vehicles  in 
component  3.3),  the  RRP  makes  the  commitment  to  support  only  zero-emission  and  low 
emission  cars  (emissions  below  50gCO2/km),  which  are  considered  compliant  with  DNSH  for 
the  climate  mitigation  objective.  The  business  RDI  investment  schemes  (component  5.2)  will 
include a clause (e.g. in eligibility criteria of calls specifications) on the technological neutrality 
and  ex-ante  exclusion  of  harmful  activities  (e.g.  coal,  lignite  support).  Only  activities  that 

57 

 
 
comply  with  relevant  EU  and  national  environmental  legislation  can  be  selected.  The  DNSH 
compliance of the mezzanine financial instrument  (component 4.2)  requires that an investment 
strategy and subsequent  contractual agreements with recipients of EU funding are aligned with 
the Commission sustainability proofing guidance. This requirement is reflected in the design of 
measures and corresponding targets. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation  of  reforms  and  investments  projects  included  in  Czechia´s  recovery  and 
resilience  plan  is  expected  to  do  a  significant  harm  to  environmental  objectives  within  the 
meaning  of  Article  17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant 
harm’). This would warrant a rating of A under the assessment criterion 2.4 of Annex V to the 
RRF Regulation. 

4.5. Green transition  

Climate target 

Czechia’s recovery and resilience plan dedicates an amount of EUR 2.9 bn to  the climate 
objective, which represents 41.6% of the plan’s total allocation. This exceeds the minimum 
climate target of 37% as set out in the RRF Regulation and is based on correct application of the 
methodology  for  climate  tracking  as  set  out  in  Annex  VI  to  that  Regulation,  by  identifying 
intervention  fields,  and  corresponding  coefficients  for  the  calculation  of  support  to  climate 
change  objectives.  Czechia’s  plan  does  not  use  any  uplifting  or  increase  of  certain  climate 
coefficients for investments. 

The  main  pillar  contributing  to  climate  change  objectives  is  the  green  pillar,  which  is 
constituted  of  nine  components.  These  measures  contribute  towards  the  climate  change 
objective  through  a  broad  range  of  interventions,  stretching  from  energy  efficiency  and 
renewable energy sources to sustainable transport and climate adaptation. 

Measures to improve energy efficiency in buildings, as well as to promote the acquisition of 
boilers based on renewable energy sources provide the largest contribution to the climate 
mitigation  objective.  With  estimated  costs  of  EUR  332  million,  renovation  of  residential 
buildings (2.5.1) represents the biggest contribution of one single measure to the climate target. 
This  is  a  broad  energy-efficient  building  renovation  programme  which  is  expected  to  deliver 
energy savings of at least 30%, renovations to very high efficiency classes and the abolition of 
support  for  lower  classes  of  energy  performance.  It  is  complemented  by  energy  savings  to  be 
achieved in railway station buildings (2.1.3), public buildings (2.2.1, 2.2.3), university facilities 
(3.2.4), pre-school  childcare  facilities (3.3.2), social services  infrastructure (3.3.3), buildings in 
regenerated  brownfields  (2.8)  and  public  lighting  (2.2.2).  The  aim  of  the  plan  is  also  to 
encourage  investments  that  will  increase  the  share  of  renewable  energies  in  the  end  energy 
consumption of buildings (2.5.2 ). With estimated costs of EUR 283 million, renewable energy 
for residential buildings (2.5.2) represents the second biggest contribution of one single measure 
to the climate target. In addition, the plan also includes measures to step up the support for 

58 

 
 
 
the  construction  of  new  photovoltaic  energy  sources  by  undertakings  (2.3.1)  and  the 
modernisation of district heating distribution systems (2.3.2). 

The second largest  contribution  to the climate target  is  provided by supporting sustainable and 
clean  transport  and  mobility.  With  estimated  costs  of  EUR  264  million,  the  third  biggest 
contribution  of  one  single  component  in  the  plan  to  the  climate  target  results  from  the 
electrification  of  the  railway  infrastructure  (2.1.2),  complemented  by  its  modernisation 
(including  energy  savings  in  railway  station  buildings)  (2.1.3)  and  its  digitalization  (2.1.1)  as 
well as by enhancing the safety of railway and road crossings, modernizing bridges and tunnels 
and constructing cycling paths (2.1.4). The promotion of purchasing zero-emission trolley buses 
and  trams  in  Prague  (2.4.2.3)  and  deploying  charging  infrastructure  for  public  transport  in  the 
city  (2.4.1.1)  also  represents  an  important  contribution  to  the  climate  target  in  the  mobility 
components.  This  effort  is  complemented  by  grants  for  replacing  the  vehicle  fleet  of 
undertakings  (2.4.2.1)  and  for  their  non-public  recharging  infrastructure  (2.4.1.2).  These  big 
items are complemented by smaller measures but with a full climate tag such as the replacing the 
vehicle  fleet  of  the  public  sector  and  deploying  their  non-public  recharging  infrastructure 
(2.4.2.2) and constructing recharging stations for residential buildings (2.4.1.3).  

A third important part of the plan’s climate contribution comes from a range of measures 
related  to  the  climate  adaptation  and  environmental  protection.  With  estimated  costs  of 
EUR 335 million, reforestation represents a big contribution of one single measure to the climate 
target. This is justified by a commitment of Czechia to implement a system change that would 
provide  for  a  creation  of  multigenerational  forests  with  special  composition,  which  is  required 
for  climate  change  adaptation.  Other  measures  range  from  implementing  flood  protection 
measures, adapting small water courses and constructing small water reservoirs, retaining water 
in  the  landscape  and  forests  and  implementing  anti-erosion  measures  (2.6)  to  flood  protection 
measures of the city of Brno, rain-water management in urban areas and biodiversity protection 
(2.9).  Although  Czechia  also  agreed  that  drought  management  (under  2.9)  will  be  linked  to  a 
reform  for  systemic  enhancement  of  water  retention  in  the  landscape  (by  landscape  planning), 
particular attention will be given to ensure complementarities between these two components 2.6 
and  2.9  since  Czechia  failed  to  prepare  one  consolidated  component  and  to  ensure  inter-
ministerial  cooperation.  This  also  demonstrates  that  transformative  potential  of  the  plan  in  the 
areas of climate action and biodiversity mainstreaming remains largely untapped. Finally, close 
monitoring  of  milestones  and  targets  agreed  for  flood  prevention  measures  (under  2.6)  will  be 
needed at the implementation stage in order to ensure compliance with DNSH principle. 

A  fourth  part  of  the  plan  contributes  to  the  green  transition  and  to  some  degree  to  the 
protection of the environment by promoting circular economy and waste management. This 
set of measures includes constructing recycling infrastructure (2.7.1) as well promoting circular 
solutions in undertakings (2.7.3) and water savings in the industry (2.7.4). 

Several further measures contribute to the plan’s climate target such as mezzanine financing 
of  investment  projects  of  SMEs  (4.2.1)  and  aid  for  environmental  R&D  through  support 
programme ‘Area for Life’ (5.2.4). 

Table 7: Climate contribution of the components of the Czech recovery and resilience plan 

59 

 
 
Component and name of the component 

Total 
Cost 

Climate 
contributi
on 

in EUR million 

Climate 
Contribution 

in % of 
cost of 
the 
compon
ent 

in % of 
non-
repayable 
allocation
* 

2.1. Sustainable and safe transport  
2.2. Reduction of energy consumption in 
the public sector  
2.3. Transition to cleaner energy sources  
2.4. Developing clean mobility  
2.5. Building renovation and air protection  
2.6. Nature protection and climate change 
adaptation  
2.7. Circular economy and recycling and 
industrial water  
2.8. Brownfields  
2.9 Promotion of biodiversity and drought 
issues  
3.3. Modernisation of employment services 
and labour market development  
4.2. New quasi-equity instruments to 
support entrepreneurship  
5.2. Support for research and development 
in companies and the introduction of 
innovations into business practice  

942.58 

549.43 

58.3 

324.60 
261.57 
191.82 
631.55 

324.60 
261.57 
191.82 
615.32 

541.84 

417.98 

141.39 
130.86 

94.26 
52.34 

117.19 

63.02 

885.59 

336.92 

39.27 

15.71 

100.0 
100.0 
100.0 
97.4 

77.1 

66.7 
40.0 

53.8 

38.0 

40.0 

125.68 

7.85 

6.3 

7.8 

4.6 
3.7 
2.7 
8.7 

5.9 

1.3 
0.7 

0.9 

4.8 

0.2 

0.1 

Total (net of VAT) 
*  Please  note  that  the  climate  change  contribution  in  percentage  is  calculated  based  on 
Czechia’s total allocation (EUR 7.036 million). 

2930.81 

4333.95 

41.6 

67.6 

60 

 
 
Green transition  

The  recovery  and  resilience  plan  contributes  to  Czechia’s  green  transition,  addresses  the 
related  challenges,  and  is  overall  aligned  with  the  priorities  of  the  European  Green  Deal 
and its 2030 climate target plan as well as the goal to make the EU climate-neutral by 2050. 
The  plan  contains  components  addressing  most  of  the  green  transition  areas  and  making 
contributions to achieving those priorities and goals. Concerning clean energy, components 2.3 
and 2.5 include investments aiming at increasing renewable energy sources in Czechia’s energy 
mix,  with  the  overall  objective  of  savings  in  primary  energy  sources.  On  renovating  and 
building, sizeable investments are planned particularly under components 2.5 and 2.2 to improve 
the energy efficiency of Czechia’s ageing stock of residential and public buildings, respectively. 
On  sustainable  mobility,  components  2.1  and  2.4  consist  of  large-scale  investments  aiming  to 
foster the electrification of rail infrastructure, improve urban public transport in Prague and equip 
undertakings  with  electric  and  hydrogen  vehicles  and  non-public  recharging  infrastructure. 
Components 2.6 and 2.9 include measures to promote climate adaptation and biodiversity, such 
as reforestation, flood protection measures, the revitalisation of watercourses and the retention of 
water  in  the  landscape.  Unfortunately,  the  afore-mentioned  investments  are  not  complemented 
by ambitious reforms in the plan that would have the potential to adapt the legal, administrative 
and economic framework to incentivise the uptake of renewable energy, energy efficiency, clean 
mobility  or  nature-based  solutions  to  address  climate  change  and  to  protect  biodiversity. 
Moreover,  despite  the  measures  under  components  2.6  and  2.9  claiming  to  address  similar 
objectives, complementarities between measures to be implemented remain to be demonstrated. 
Finally,  on  sustainable  industry,  component  2.7  includes  reforms  targeted  at  devising  the  legal 
and  strategic  preconditions  for  the  transformation  of  Czechia  to  a  circular  economy.  These 
measures  are  accompanied  by  investments  into  the  creation  of  infrastructure  for  recycling  and 
energy  recovery  in  biogas  installations,  alongside  the  support  for  investments  in  circulatory 
solutions and water savings in the business sector. 

The plan is in line with the strategic principles of Czechia’s NECP. The Czech recovery and 
resilience  plan  includes  investments  serving  all  five  dimensions  of  the  NECP,  but  no  reforms 
able  to  initiate  systemic  changes  are  envisaged.  The  plan  specifically  addresses  Czechia’s 
contribution to the European climate-energy objectives, focusing on the reduction of greenhouse 
gas  emissions,  the  efforts  to  ramp  up  the  usage  of  renewable  energy  sources  and  increased 
energy efficiency. 

Regarding greenhouse gas emissions, Czechia has committed to a reduction of 30% until 2030 
compared  to  2005  in  its  NECP.  For  emissions  not  covered  by  the  EU  Emissions  Trading 
Systems,  the  NECP  foresees  a  reduction  of  14%  until  2030,  as  set  in  the  Effort  Sharing 
Regulation.  Against  the  backdrop  of  the  expected  increase  in  energy  demand  in  the  transport 
sector, the Czech recovery and resilience plan contributes to this objective through its investment 
in electric transport and smart mobility in both urban and rural areas. The NECP also describes 
Czechia’s  efforts  to  lower  greenhouse  gas  emissions  in  the  building  sector  through  the  New 
Green  Savings  programme,  a  subsidy  scheme  closely  intertwined  with  the  component  on 
building  renovation  and  air  protection.  In  addition,  the  plan  aims  at  ensuring  the  reduction  of 

61 

 
 
greenhouse  gas  emissions  by  a  better  use  of  digital  technologies.  As  to  its  contribution  to  the 
Land  Use,  Land  Use  Change  and  Forestry  (LULUCF)  sector,  the  plan  includes  further 
investments in increasing the carbon sink through afforestation and enhancing the water retention 
of  forests.  These  investments  are  complemented  by  the  preparation  of  an  assessment  on  the 
sustainable use of bioenergy, supply of biomass and its expected impacts on the LULUCF sector. 

Concerning  renewable  energy  sources,  the  plan  addresses  the  transition  from  fossil  fuels 
towards  low-  and  zero-emission  energy  sources.  In  pursuit  of  this  objective,  the  plan  entails 
investments amounting to the construction of 270 MWp (megawatt peak) of photovoltaic power 
plants  by  2026.  This  capacity,  corresponding  to  around  972  TJ  in  gross  final  consumption,  is 
expected  to  help  meet  the  objective  of  239  717.2  TJ  stated  in  the  NECP.  This  objective 
represents  an  increase  of  22%,  which  has  been  deemed  as  unambitious  by  the  Commission. 
Additional measures incentivising investments in renewable energy resources may be needed to 
fulfil the objective set in the NECP. Moreover, component 2.3 on cleaner energy sources aims at 
lowering  the  level  of  coal  combustion  for  heat  and  electricity  production  by  increasing  the 
efficiency of district heating distribution and reducing greenhouse gas emissions and pollutants. 
This measure is expected to achieve additional 245 TJ of energy savings by 2026.  

A sizeable share of the plan is  dedicated to energy  efficiency.  In the  NECP, Czechia set  its 
national  contribution  to  the  European  efficiency  targets  in  2030  at  23.7  million  tonnes  of  oil 
equivalent (Mtoe) for final energy consumption, which has been deemed of modest ambition by 
the  Commission.  For  primary  energy  consumption,  the  projected  contribution  is  41.4  Mtoe, 
which has been assessed to present a low level of ambition. The recovery and resilience facility 
aims at implementing several measures outlined in the NECP but should also build up on them. 
Further,  reflecting  the  requirements  set  out  by  Directive  2012/27/EU  on  energy  efficiency  as 
amended  by  Directive  2018/2002,  investments  under  the  recovery  and  resilience  facility 
complementing other financing sources are aimed at tackling the low levels of energy efficiency 
of buildings. This  concerns buildings in  the  residential  and public sector in  general,  as  well as 
more targeted investments into buildings of the railway, education and social sector. Relatedly, 
the  plan  foresees  energy-efficient  renovations  of  buildings  in  former  brownfield  areas. 
Additional public funding may be however needed to mobilise the total volume of investments 
necessary  to  fulfil  the  outstanding  energy  savings  required  to  achieve  the  objective  set  in  the 
NECP and the long-term renovation strategy for 2030. 

In  terms  of  energy  security,  Czechia’s  NECP  aims  at  limiting  import  dependency  below 
65% and 70% by 2030 and 2040, respectively. The projected increase in import dependency is 
due to the planned phase-out of coal by 2038, which is foreseen to be substituted by renewable 
energy  sources,  natural  gas  and  nuclear  power  generation.  The  support  for  cleaner  energy 
sources under the Czech plan contributes to the diversification of the energy mix and therefore 
provides a small contribution to improving energy security.  

Another  part  of  the  plan  contributes  to  sustainable  transport  and  mobility  through  the 
digitalisation of transport, electro-mobility in rail transport, increasing the share of rail transport 
in  freight  and  passenger  transport,  increasing  the  importance  of  active  mobility  in  cities, 
improving traffic safety, and reducing the impact of traffic on the environment and public health. 

62 

 
 
In  addition,  the  plan  pays  attention  to  alternative  propulsion  in  road  transport  and  urban  bus 
transport. It incorporates sustainable urban mobility plans, which aim at promoting greater use of 
more  energy-efficient  modes  of  transport  for  regular  and  heavy  transport  flows.  Yet  Czechia 
misses  the  opportunity  to  shift  to  clean  mobility  with  road  levies,  taxation,  or  other  regulatory 
measures.  Moreover,  the  plan  includes  the  creation  of  non-public  charging  stations  for  electric 
vehicles  for  private  companies,  the  city  of  Prague,  and  to  a  lesser  extent,  also  for  residential 
buildings.  It  will  also  support  the  purchase  of  electric  and  hydrogen  vehicles  for  private 
companies  as  well  as  trolley  buses  and  trams  for  the  city  of  Prague.  The  aim  is  to  increase 
incentives  for  operators  to  invest  in  the  construction  of  alternative  fuels  infrastructures  and  to 
promote  the  purchase  of  zero  emission  vehicles.  Overall,  the  ambition  seems  low  with  no 
publicly  accessible  electric  recharging  and  hydrogen  refuelling  infrastructure  planned  to  be 
financed under RFF and only 4 580 not publicly accessible recharging points envisaged. This is 
significantly  low  as  Czechia  itself  states  an  ambition  to  have  35  000  publicly  accessible 
rechargers by 2030. 

Beyond  the  measures  relating  to  the  objectives  of  the  NECP,  the  recovery  and  resilience 
plan aims at promoting the green transition and ‘zero pollution’ ambition of the European 
Green  Deal  through  the  efficient  usage  of  natural  resources,  in  particular  through  water 
and  waste  management,  decreasing  of  air  pollution  and  protection  and  restoration  of 
natural environment. In doing so, the recovery and resilience plan is underpinned by a number 
of national plans beyond the NECP, such as the National Action Plan for Adaptation to Climate 
Change, the Czech Biodiversity Strategy 2016-2025, the Czech Strategic Framework 2030, Air 
quality plans, River Basin Management Plans and Flood Management Plans, the national Waste 
Management  Plan,  and  the  Circular  Economy  Action  Plan.  Concerning  climate  mitigation,  the 
measures  on  energy  efficiency  and  renewable  energy  sources  aim  at  reducing  greenhouse  gas 
emissions. As regards ‘zero pollution’, the investments are also expected to contribute to meeting 
the national reduction targets under Directive EU 2016/2284. Emission reductions are also set to 
have a positive impact on water quality, especially the reduction of benzo(a)pyrene emissions. In 
addition, strategic reforms and investments are planned to contribute to advancing the objective 
of a circular economy.  These measures also  ensure the sustainable use and protection of water 
and marine resources, while supporting the prevention and control of pollution. 

Czechia is a climate-vulnerable country exposed to the adverse impacts of climate change, 
in particular due to floods and droughts. The plan includes a number of  investments and few 
reforms  related  to  climate  change  adaptation,  including  legislative  act  aiming  at  a  systemic 
approach to tackle droughts and water scarcity, measures aiming at improving the conservation 
status  of  protected  areas  of  the  Natura  2000  network,  at  supporting  the  adaptation  to  climate 
change of  aquatic, non-forest  and forest  ecosystems  and at  managing  rainwater in  urban  areas; 
nevertheless the contribution to the mainstreaming of the biodiversity could have been reinforced 
by  further  measures,  namely  to  ensure  the  strategic  support  to  nature  based  solutions  which  is 
still  missing  in  Czechia.  The  plan  contains  measures  aiming  at  an  improvement  of  the 
morphological  condition  of  existing  small  watercourses  and  small  water  reservoirs,  measures 
aiming at increasing the ecological stability of the landscape and its resilience to climate change, 
at promoting biodiversity and at protecting agricultural lands and water resources. Given the lack 
of use of nature-based solution, these measures are not considered as not fully consistent with the 

63 

 
 
objective of the EU Biodiversity Strategy of restoring river continuity and natural conditions to 
boost  the  ecological  quality  of  waters.  Finally,  the  plan  covers  a  reforestation  measure  that  is 
expected to contribute to an increase of the forest cover area by 36 000 ha.  

The  plan  also  includes  measures  that  address  societal  and  economic  challenges  resulting 
from  the  green  transition.  These  include  investments  in  the  building  renovation,  renewable 
energy sources, sustainable transport, climate adaptation  and circular economy. For the sake of 
addressing  energy  poverty,  part  of  the  support  for  the  replacement  of  coal-fired  boilers  by 
renewable  energy  solutions  is  designed  to  tackle  the  financial  obstacles  encountered  by  low-
income households. The potential negative impact on social cohesion is addressed by measures 
supporting reskilling of the labour force, including workers at risk of redundancy due to the coal 
phase-out. Czechia is expected to adopt a territorial Just Transition Plan at a later stage to ensure 
a just transition of these structurally disadvantaged regions. 

In line with the EU’s and Czechia’s environmental and energy strategy, these measures are 
expected  to  help  Czechia  achieve  a  green  transition,  stimulating  changes  to  energy 
production  and  transport.  The  RRF  is  expected  to  provide  an  important  part  of  investments 
needed for the fundamental infrastructure framework for a stable economy in line with Czechia’s 
long-term strategy. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contributes to the climate target. This would warrant a rating of A under criterion 2.5 
of Annex V to the RRF Regulation. 

4.6. Digital transition 

The recovery and resilience plan of Czechia applies the digital tagging methodology correctly as 
it  is  defined  in  Annex  VII  to  the  Regulation  (EU)  2021/241  on  establishing  the  Recovery  and 
Resiliency Facility. The recovery and resilience plan foresees EUR 1 636 763 550 of investment 
in digital transition, which indicates a 22.1% contribution of the total plan’s allocation dedicated 
to  digital  transition  according  to  the  digital  tracking  methodology.  The  choice  of  intervention 
fields  for  the  digital  transition  is  well  justified  and  reflects  the  nature,  focus,  objective,  or 
expected  outcome  of  the  investments  included  in  the  component.  Hence,  the  plan  is  in 
compliance with and safely above the required 20% threshold stipulated in Article 18  (4), point 
(f) of the Regulation (EU) 2021/241.  

64 

 
 
 
 
 
Table 8: Digital contribution of the components of the Czech recovery and resilience plan 

Component and name of the 
component 

1.1 Digital services for citizens and 
businesses 
1.2 Digital government systems 
1.3 Digital high-capacity networks 
1.4 Digital economy and society, 
innovative start-ups and new 
technologies 
1.5 Digital transformation of 
enterprises 
1.6 Acceleration and digitalization 
of Building permit process 
2.1 Sustainable and safe transport 
3.1 Innovation in Education in the 
Context of Digitalisation 
3.3 Modernisation of employment 
services and labour market 
development 
4.5 Developing the cultural and 
creative sectors 
5.2 Support for research and 
development in companies and the 
introduction of innovations into 
business practice 

Total Cost 

Digital 
contribution 

in EUR million 

Digital Contribution 

in % of 
cost of the 
component 

in % of 
non-
repayable 
allocation* 

112.19 
277.05 
227.28 

112.19 
277.05 
227.28 

100.0 
100.0 
100.0 

224.26 

215.65 

96.2 

196.37 

196.37 

100.0 

56.80 
942.58 

56.80 
37.51 

100.0 
4.0 

190.75 

190.75 

100.0 

885.59 

179.09 

214.04 

40.22 

20.2 

18.8 

1.6 
3.9 
3.2 

3.1 

2.8 

0.8 
0.5 

2.7 

2.5 

0.6 

125.68 

23.56 

18.8 

0.3 

Total (net of VAT) 
3452.61 
*  The  climate  change  contribution  in  percentage  is  calculated  based  on  Czechia’s  total 
allocation (EUR 7.036 million). 

1556.49 

22.1 

45.1 

Czechia plans to invest in a wide range of activities and infrastructure to boost the digital 
transition  of  the  economy.  The  structure  of  reforms  and  investments  is  balanced  and 
appropriately  distributed  between  human  capital,  digitalisation  of  businesses  and  digital  public 
services. Significant investments are foreseen inter alia in the development of core registers and 
infrastructure,  digitalisation  of 
other  eGovernment  facilities,  high-capacity  connectivity 
businesses, deployment of innovative digital technologies, digital skills including ICT equipment 
for  educational  purposes  and  re-  and  upskilling.  The  plan  envisages  one  pillar  with  six 
components completely dedicated to the digitalisation of the economy, while ten components out 
of the 26 financed from the recovery and resilience facility contribute towards the digital target. 
In total, the plan contains 55 investments and reforms included in the calculation of the digital 

65 

 
 
target. There were no coefficients increased within the meaning of Article 18 (4), point (f) of the 
Regulation (EU) 2021/241.  

The  largest  contribution  to  the  achievement  of  the  digital  target  of  the  plan  comes  from 
investment in digital skills and human capital, essential for the successful digital transition 
of  the  economy  and  society.  Tackling  the  insufficient  supply  of  digital  experts  in  the  labour 
market and preparing the future generations for the challenges induced by an increasingly digital 
and  automated  economy  through  education  programmes  is  necessary  in  order  to  foster  the 
growth potential of the Czech economy. As described in section 2.3, the education system plays 
a  vital  role  in  addressing  the  need  for  digitalisation  and  Czechia  needs  to  do  more  to  provide 
equal access to digital learning, digital skills and to stimulate life-long learning.  

The  recovery  and  resilience  plan  supports  the  digitalisation  of  education  through  a 
coherent set of reforms and investments. On the reform side, the plan, in line with the national 
strategy  Education  2030+,  puts  forward  a  revision  of  curricula  to  reinforce  digital  education, 
combined  with  training  programmes  for  teachers,  provision  of  digital  educational  content  and 
mentoring for schools. The investments are directed at connectivity, ICT equipment for schools 
and  pupils  taking  into  account  the  socio-economic  disparities.  The  increased  access  to  digital 
technologies  will  also  contribute  to  social  cohesion  by  reducing  the  educational  barrier  for 
disadvantaged  children,  thus  supporting  the  objectives  of  the  European  Pillar  of  Social  Rights. 
As regards higher education, the plan aims at accelerating adaptation of the study programmes to 
digital learning and new study fields, in particular in rapidly developing IT sectors.  

To  address  changing  needs  of  the  labour  market,  Czechia  proposes  to  invest  in  re-  and 
upskilling programmes, focusing largely on digital skills, in particular of employees and job-
seekers  in  the  spirit  of  the  Digital  Decade  strategy.  The  lack  of  digital  experts  poses  a  major 
obstacle to the digitisation of Czech companies and the economy, however, the envisaged re- and 
upskilling programmes coupled with the technological support to companies for digitisation will 
foster the growth of SMEs and businesses and will make more resilient against future shocks. In 
line  with  the  Pact  for  Skills,  the  plan  also  foresees  to  reinforce  coordination  of  upskilling  and 
reskilling with the social partners, in order to improve matching with the labour market needs.    

The  plan  also  aims  to  increase  the  resilience  of  companies  through  digitalisation  of 
manufacturing  and  further  non-production  related  processes.  This  investment  consists  of 
grant support programmes for individual investment projects open for SME as well as for larger 
enterprises,  including  those  implementing  large-scale  projects  potentially  qualified  as  IPCEI. 
Czechia  will  further  invest  in  the  deployment  of  cutting-edge  innovative  digital  technologies 
such as the application of artificial intelligence, blockchain or quantum communication. The plan 
will support technological demonstration projects in the area of Industry 4.0 and 5G. The support 
for  the  digitalisation  of  the  aeronautics  industry  is  likely  to  create  a  spill-over  effect  to  other 
sectors.  These  investments  will  be  further  reinforced  by  investing  in  the  innovation  ecosystem 
supporting  start-ups  and  innovative  businesses  through  Digital  Innovation  Hubs,  the  Centre  of 
Excellence  for  AI  and  regulatory  sandboxes  in  line  with  the  objectives  of  the  Digital  Europe 
Programme,  Horizon  Europe  and  the  Shaping  Europe’s  Digital  Future  strategy.  The  plan  is 
expected  to  also  strengthen  Czechia’s  participation  in  relevant  technological  European  multi-

66 

 
 
country  projects.  The  complementary  nature  of  the  envisaged  measures  will  enable  Czechia  to 
exploit  the  synergies  between  innovation,  infrastructural  development  and  digital  transition  of 
the society and has the potential to facilitate the growth and the transition towards a higher value 
added  digital  economy.  These  investments  will  contribute  to  the  flagship  objectives  of  the 
recovery and resilience facility in particular to “Scale-up”. 

Investment  in  public  administration,  notably  in  eGovernment  services  is  strongly  present 
in  the  plan  in  line  with  the  “modernise”  flagship  of  the  recovery  and  resilience  facility, 
which has the potential to improve the business environment in Czechia.  Access to quality 
eGovernment  services  will  increase  transparency  and  ease  the  administrative  burden  on 
companies. Czechia scores as 22nd on the DESI index for eGovernment and it received a country 
specific recommendation in 2019 asking for more action on reducing the administrative burden 
for  investments.  The  plan  envisages  measures  not  only  to  develop  the  back-end  infrastructure 
and to link core registries but also to increase the number and quality of eGovernment services 
offered to citizens and businesses such as bigger volume of open data or interoperability between 
user-oriented portals. This includes the provision of a broader and more integrated set of eHealth 
services  and  the  strengthening  of  the  cybersecurity  of  the  critical  information  systems.  The 
COVID-19  pandemic  has  proven  the  importance  of  having  robust  and  well-functioning 
information  systems  in  place,  which  will  help  to  manage  the  needs  of  citizens  and  businesses, 
thus contributing towards a more resilient society and economy. Moreover, Czechia is committed 
to reform the construction permission procedure, in conformity with the Environmental Impact 
Assessment Directive, in order to shorten the length of the process, which has been an obstacle 
for  businesses  and  investment.  These  measures  will  increase  transparency  and  improve  the 
efficiency  of  public  administration,  and  reduce  the  time  and  costs  of  administrative  processes, 
hence, helping to create a more supportive environment for businesses.  

The plan foresees measures to improve connectivity including in rural areas by investing in 
very  high-capacity  and  5G  networks.  As  highlighted  in  section  2.3,  so  far  only  33%  of 
Czechia’s  households  are  covered  by  fixed  very  high  capacity  network  despite  an  overall  high 
coverage  of  fast  internet.  The  plan  is  also  expected  to  improve  the  environment  for  the 
deployment of  electronic communication networks and building  5G  corridors, through reforms 
promoting availability of information on physical infrastructures and civil works and supporting 
the  development  of  5G  by  promoting  infrastructure  sharing  and  improving  the  process  for 
granting  spectrum.  This  will  increase  access  to  quality  digital  services  for  both  citizens  and 
business and it will support the deployment new digital technologies, complementing the other 
reforms and investments in the plan.  

Overall, the Czech RRP makes a solid effort to foster the digital transition of the economy 
and the society. The planned investment in high-capacity and 5G networks should increase the 
connectivity  of  households  and  business  and  the  support  to  cutting-edge  digital  technologies 
should  foster  the  digitisation  of  businesses,  innovation  and  uptake  of  new  technologies.  The 
reform  of  the  curricula  complemented  with  digital  equipment  and  the  re-  and  upskilling 
programmes could positively contribute towards the increase of digital literacy in the society and 

67 

 
 
the  availability  of  IT  experts.  Hence,  the  envisaged  measures  have  the  potential  to  create  a 
lasting impact and support the digital transition and growth potential of the Czech economy. 

The recovery and resilience plan of Czechia applies the digital tagging methodology correctly as 
it  is  defined  in  Annex  VII  to  the  Regulation  (EU)  2021/241  establishing  the  Recovery  and 
Resiliency Facility. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and  ensures that at least 20% of its total 
allocation  contribute  to  support  digital  objectives.  This  would  warrant  a  rating  of  A  under 
criterion 2.6 of Annex V to the RRF Regulation. 

4.7. Lasting impact of the plan  

Structural change in administration and institutions 

Czechia’s recovery and resilience plan entails highly relevant structural changes to public 
administration and institutions. The recovery and resilience plan of Czechia presents a set of 
reforms  and  investments  with  a  focus  on  the  latter,  which  have  the  potential  to  have  a  lasting 
impact  on  Czechia.  The  plan  introduces  measures  presenting  structural  changes  in  public 
administration,  business  administration  (crucial  new  construction  act  and  digitalisation  of  the 
permitting procedure), transport, energy savings and energy resources of households, skills and 
education, anti-corruption, research and innovation and access to health and social care. The plan 
puts  forward  an  ambitious  agenda  for  the  digitalisation  of  business  and  a  supportive  recovery 
agenda for strengthening the innovation ecosystem, which should foster sustainable growth and 
increased competitiveness of Czechia.  

The reforms of the justice system and of the corruption prevention framework can have a 
lasting  impact.  They  are  about  strengthening  the  independence  of  the  judiciary  by  increasing 
transparency  of  the  process  of  selection  of  judges  and  offering  additional  safeguards  in 
disciplinary proceedings against judges, prosecutors and bailiffs. With a view to anti-corruption, 
one  of  the  measures            is  focused  on  improving  data  collection  on  corruption  in  Czechia. 
Additionally,  new  rules  on  whistleblower  protection  and  on  lobbying    at  the  central  level  are 
proposed to enhance transparency in the decision-making process. 

Digitalisation efforts across a wide range of institutions and public administration have the 
potential  to  structurally  enhance  efficiency  and  improve  the  quality  of  public  services.  A 
wide  range  of  measures  supporting  eGovernment,  connectivity,  e-health  and  education  (digital 
skills) will be implemented.  

68 

 
 
 
 
 
Structural change in policies 

Structural  reforms  are  also  foreseen  in  the  legal  framework  in  some  policy  areas,  e.g.  in 
education, health care or digitalisation. The measures included in the plan try to address the 
root  causes  of  the  challenges  identified  and  not  just  symptomatic  issues.  Reforms  and 
investments are expected to have a lasting impact on economic activity in Czechia, raising GDP 
by an estimated 11.2% in the long-term (2020-2040). However, Czechia missed the opportunity 
to  address  some  other  structural  challenges  linked  to  clean  transport  or  the  efficiency  of  R&D 
ecosystem and governance.   

The plan contains a limited number of measures to respond to the country’s challenges in 
the area of gender equality and equal opportunities for all. These include efforts to promote 
female  employment,  notably  through  an  increase  of  childcare  services.  They  also  include  the 
introduction of support measures for schools in the most socially disadvantaged localities and to 
increase  the  quality  of  education  for  “children  endangered  with  school  failure”  as  examples  of 
measures to  tackle inequalities in  Czechia but  they do not  mention  explicitly segregated Roma 
schools  for  example.  The  plan  states  that  the  development  of  new  or  innovative  information 
systems  will  respect  the  existing  laws  on  accessibility  for  persons  with  disabilities,  and  those 
new buildings will respect the accessibility rules enshrined in the new construction act. However, 
this is mere compliance with the existing rules, and Czechia does not take the opportunity of the 
plan  to  contribute  to  gender  equality  and  equal  opportunities  for  all  sectors.  Equality 
considerations should have been taken into account much more consistently throughout the plan. 

Lasting impact 

The recovery and resilience plan of Czechia presents a set of reforms and investments with 
a focus on the latter, which have the potential to have a lasting impact on Czechia, both on 
institutions  and  policies.  In  its  plan,  Czechia  not  only  provides  estimates  of  the  expected 
economic and social impact including in  a long-term perspective until 2040, but also identifies 
implementation  risks  and  challenges  for  key  reforms  and  investments.  It  also  provides  an 
estimate  of  implied  improvements  to  long-term  fiscal  sustainability  and  the  debt  trajectory. 
However, more justification on assumptions behind the estimates on long-run productivity gains 
(e.g.  targets  not  directly  under  the  control  of  the  government)  could  have  helped  to  further 
underpin the analysis of lasting impacts. 

Czechia has put emphasis on broad stakeholder involvement during the implementation of 
the plan to ensure structural changes can count on broad support. The plan envisages setting 
up  a  committee  to  ensure  a  structured  dialogue  with  key  stakeholders  throughout  the 
implementation phase, as well as a communication strategy for the broader public.  

Sizeable investments are set to bring lasting change in the Czech economy. The investment 
into  sustainable  modes  of  transport,  such  as  railways  and  into  energy  efficient  renovation  of 
housing stock and public buildings, is expected to reduce air pollution, aid green transition and 
contribute  to  territorial  cohesion.  The  investments  into  innovative  start-ups,  SMEs  and  large 
enterprises through different funding schemes, coupled with the strengthening of the innovation 
ecosystem  and  investment  in  very  high  capacity  networks,  are  set  to  foster  innovation  and 

69 

 
 
competitiveness  of  Czech  businesses  whilst  contributing  to  green  and  digital  transition. 
Healthcare  reforms  are  supported  by  investment  in  specialised,  screening  programmes  and 
comprehensive  rehabilitation  care  as  well  as  in  excellent  research  in  selected  healthcare  fields, 
which  overall  can  improve  health  outcomes  and  societal  impact.  Investments  in  education, 
training and aid the social cohesion and contribute to cushioning the potential impact of changing 
labour market trends and demographics. These investments are leveraged by further investment 
into  project  preparation,  trainings,  awareness  raising,  methodological  and  analytical  support  at 
the  central,  regional  and  local  levels  to  foster  green  and  digital  transition  and  maximise  the 
impact  and  the  absorption  of  additional  resources  including  funds  from  the  Recovery  and 
Resilience  Facility.  In  view  of  promoting  wider  coherence  across  instruments  a  balanced 
territorial allocation of resources is encouraged. Lasting impact of the plan can also be enhanced 
through  synergies  between  the  plan  and  other  programmes  financed  by  the  cohesion  policy 
funds, notably by addressing in a substantive manner the deeply rooted territorial challenges and 
promoting a balanced development. 

Taking into consideration all reforms and investments envisaged by Czechia in its recovery and 
resilience  plan,  their  implementation  is  expected  to  a  large  extent  to  bring  about  a  structural 
change  in  the  administration,  in  relevant  institutions  and  in  relevant  policies  and  to  have  a 
lasting  impact.  This  would  warrant  a  rating  of  A  under  criterion  2.7  of  Annex  V  to  the  RRF 
Regulation.  

4.8. Milestones, targets, monitoring and implementation  

Milestones, targets and indicators    

The plan includes 115 milestones and 129 targets that appropriately reflect the implementation of 
the  measures  over  the  entire  life-cycle  of  the  Czech  recovery  and  resilience  plan.  The 
achievement of milestones and targets shall be verified using a detailed set of indicators, which is 
overall sufficiently clear and comprehensive.  

The  milestones  and  targets  are  relevant  and  well-defined,  with  their  number  generally 
ranging between two and three per measure. In the first phase of the plan, milestones are the 
predominant monitoring device, often relating to the entry into force of the legal framework or 
the selection of projects. During the later  years, the implementation  of the projects  is  typically 
monitored  using  final  output  targets.  The  milestones  and  targets  represent  the  key  steps  of  the 
measures and appropriately and realistically indicate whether the measures have been achieved. 
Hence,  the  proposed  milestones  and  targets  can  be  considered  in  line  with  the  long-term 
objectives of the plan.  

The  total  number  of  milestones  and  targets  is  relatively  high  at  244,  reflecting  the  large 
number of measures and sub-measures in the plan. Nevertheless, there is no indication that 
this  fragmentation  could  jeopardise  the  efficient  monitoring  and  implementation  of  the  plan. 
Milestones and targets are specified such that they ensure compliance with the ‘Do no significant 
harm’ principle and appropriately justify the climate and digital tagging of the measure. 

70 

 
 
 
Czechia has also proposed a broad range of indicators, providing a suitable proxy for the 
successful  achievement of the  milestones and  targets.  These indicators are deemed  relevant, 
acceptable and robust. The majority of the indicators is under direct control of the government, 
since they either relate to input supplied by the government, as in the case of legislative acts, or 
to measurable outputs, as it is the case for targets. Factors outside the control of the government 
are expected to impact only very few indicators.  

While  the  achievement  of  the  milestones  is  realistic,  the  level  of  ambition  of  some  of  the 
indicators can be considered modest. This approach, however, allows including measures with 
higher  uncertainty  about  the  outcome,  such  as  investments  funding  R&D  or  demand-driven 
schemes,  in  the  plan.  To  safeguard  the  qualitative  success  of  the  measures,  these  investments 
have  been  complemented  with  appropriate  milestones  and  targets.  Further,  intermediate 
milestones  and  targets  have  been  added  for  several  measures,  to  ensure  that  Czechia  may  take 
corrective actions early on if necessary.  

The  verification  mechanisms,  data  collection  and  responsibilities  outlined  in  the  plan  appear 
sufficiently sound, reliable and verifiable to justify the disbursement requests upon achievement 
of the milestones and targets. 

Overall organisational arrangements 

In order to monitor the progress on milestones and targets, component owners will set up 
system  with  regular  monitoring  reports  submitted  by  the  final  recipients.  The  supporting 
documents related to the achievement of milestones will be stored in the main IT system or in the 
systems  at  the  level  of  component  owners.  Following  a  recent  audit  carried  out  by  the 
Commission  services  on  other  EU  programmes,  serious  deficiencies  in  the  design  and 
functioning  of  the  system  to  avoid  a  conflict  of  interests  have  been  identified.  Moreover,  the 
coordinating body is classified in category 3 by the national audit authority also for inadequate 
procedures  to  avoid  conflict  of  interests.  This  means  that  major  issues  have  been  detected  and 
substantial improvements are needed by the Ministry of Industry and Trade. Therefore, dedicated 
milestones are included in the Plan to ensure effective development and implementation of the 
action plan on the system that is intended to be used in the area of conflict of interests.  

The arrangements proposed by Czechia in its recovery and resilience plan are expected to be the 
minimum to ensure effective monitoring and implementation of the recovery and resilience plan, 
including the envisaged timetable, milestones and targets, and the related indicators. This would 
warrant a rating of B under the assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9. Costing  

Czechia has provided individual cost estimates for all investments and reforms included in 
the  recovery  and  resilience  plan  for  which  funding  through  the  facility  is  requested. 
Overall, Czechia has submitted sufficient evidence and explanations for the cost estimates to be 
considered  reasonable  and  plausible.  For  all  measures,  Czechia  has  also  provided  information 

71 

 
 
 
regarding  the  additionally  with  other  Union  funds.  Lastly,  the  costs  can  be  considered 
commensurate and in line with the principle of cost efficiency. 

Reasonable costs  

Based on the assessment of individual cost estimates and related supporting documents, the 
cost  estimates  for  most  of  the  measures  in  the  plan  are  deemed  reasonable.  Measures 
representing a significant majority of the plan are rated as “reasonable” to a “high” or “medium” 
extent.  For  the  majority  of  measures  included  in  the  plan,  Czechia  provided  sufficient 
information and evidence on costs, based on the template tables, backed up by descriptions of the 
methodology used, the cost calculations as well as the budgetary implications of the measure. 

The reforms and investments included in the plan comply with the eligibility criteria set out 
in the Regulation. Based on the information provided by the authorities, costs supported under 
the  RRF  are  incurred  only  for  reforms  and  investments  implemented  after  1  February  2020, 
exclude value-added tax (VAT), and do not substitute national budgetary expenditure. Costs that 
could  have  a  recurrent  nature  are  included  in  the  plan  only  to  a  limited  extent  and  for  duly 
justified exceptions, in  accordance with  article 5(a) of the Regulation.  In these cases, the  costs 
have  been  demonstrated  to  have  a  positive  expected  effect  on  the  longer-term  economic  and 
social  resilience  of  Czechia  in  line  with  the  objectives  of  the  RRF.  Czechia  has  also  provided 
reassurance that these costs will not lead to a deterioration of the national budget after 2026. For 
instance, salaries are only supported by the plan if they are of temporary nature and inherently 
and directly linked to the outcome of the measure (e.g. salaries of trainers for the implementation 
of  upskilling  programmes,  salaries  of  researchers  involved  in  R&D  projects).  Some  of  the 
measures explicitly provide reassurance for compliance with the eligibility criteria. In a limited 
number  of  cases,  the  compliance  with  the  eligibility  conditions  is  not  explicit,  yet  there  is  no 
indication that the costs incurred may be incompatible with the eligibility criteria of the RRF. 

The costs in the Czech recovery and resilience plan have been estimated based on several 
methodologies. The costs of some measures have been calculated using bottom-up approaches, 
with  reference  to  market  prices  or  prices  of  similar  units  in  past  investments  for  the  key  cost 
drivers.  Market  or  feasibility  studies  have  been  provided  in  some  cases.  For  other  measures, 
costs estimates are derived from the costing data of similar investments carried out in Czechia or 
in  other  Member  States.  The  information  provided  sometimes  rely  on  the  results  of  tenders 
conducted  for  current  or  past  similar  projects.  For  demand-driven  schemes,  where  final 
beneficiaries  must  submit  applications  for  intended  projects,  ex-ante  cost  estimations  are  less 
precise  than  in  the  case  of  measures,  where  the  type  and  nature  of  projects  is  clearly  defined 
upfront.  For  former,  the  authorities  have  provided  a  target  in  terms  of  beneficiaries  and  the 
overall amount to be spent, often supported by evidence that the costs of the measure are in line 
with the investment absorption capacity of the sector. The Czech authorities did not provide an 
independent validation for any of the cost estimates proposed. 

Most  of  the  cost  estimates  rely  on  an  understandable  methodology,  which  is  based  on 
underlying  assumptions.  For  some  measures,  however,  the  methodology  is  not  sufficiently 
substantiated and the link between the justification and the estimated costs is not clear enough to 

72 

 
 
deem the costs reasonable. Furthermore, for several measures, it cannot be fully guaranteed that 
the comparability with past projects is fully assured and that the assumptions and adjustments are 
appropriate. This is for example the case for demand-driven schemes. This aspect and the lacking 
validation of the cost estimates by an independent public body are the main reasons preventing 
the plan from receiving a high rating on reasonability.  

Plausible costs  

Based  on  the  assessment  of  individual  cost  estimates  and  related  supporting  documents, 
most of the measures in the Czech plan are deemed plausible at least to a medium extent. 
Measures representing a significant majority of the plan are rated as “plausible” to a “high” or 
“medium”  extent.  For  most  of  the  measures  included  in  the  plan,  the  Czech  authorities  have 
provided reference costs including historical or comparative data for the cost drivers, which are 
the results of previous investments or tenders in Czechia or other Member States. For innovative 
schemes, studies or reports with cost estimates or input costs have been provided.  

Based on this evidence, the estimated cost can be considered consistent with the reference 
costs  for  the  large  majority  of  reforms  and  investment,  including  other  EU  programmes, 
independent studies on the costs of the projects, or based on market prices for unit costs.  

In  some  cases,  adjustments  to  comparative  costs  have  been  made,  ensuring  the 
comparability of the projects financed under the RRF with past projects. Nevertheless, the 
exact comparability of these projects cannot be established in all instances, in particular for the 
case  of  demand-driven  schemes.  Whilst  factoring  in  the  limitations  of  ex-ante  costing 
approaches,  the lack of  complete comparability is  the major a reason preventing the plan from 
receiving a high rating on plausibility. 

No double EU financing  

For  the  majority of measures in the plan, the Czech authorities have provided additional 
information  on  whether  the  measure  or  similar  measures  receive  funding from  other  EU 
sources. For each measure where other EU financing is envisaged, the name of the program has 
been provided, and, if available, Czechia has provided information on the amounts covered. In 
cases  where  the  delineation  of  the  projects  financed  from  other  EU  funds  was  possible, 
information on the delineation was provided, based on differences in the timing of the funding or 
the nature of the intervention.  

For  several  measures,  an  exact  delineation  is  not  possible  because  the  negotiations  of  the 
Partnership Agreement and Cohesion programmes for 2021-27 have not been finalised yet. 
While the resources have not been allocated to specific areas, calls and projects, the authorities 
provided assurance that no project to be financed from the RRF will receive funding from other 
EU funds. This applies to various investment areas, as the Cohesion policy funds are traditionally 
involved in different sectors, ranging from digital and green investment to social and education 
measures. Further detail on the overall arrangements ensuring the avoidance of double funding is 
provided under section 4.10.  

73 

 
 
 
 
Commensurate and cost-efficient costs 

The amount of the estimated total costs of the plan is commensurate to the expected social 
and  economic  impact  of  the  funded  measures  and  in  line  with  the  principle  of  cost-
efficiency.  The  plan  is  expected  to  address  a  significant  subset  of  challenges  identified  in  the 
country-specific  recommendations  (CSRs),  previous  Semester  country  reports,  as  well  as 
recommendations  monitored  through  the  Social  Scoreboard  (see  Box  3).  The  reforms  and 
investments  in  the  plan  are  also  aligned  with  the  European  “flagship  initiatives”  of  the  2021 
Annual  Sustainable  Growth  Strategy.  The  plan  contains  several  measures  that  aim  to  foster 
economic growth and economic cohesion in an inclusive manner. It is addressing weaknesses of 
the Czech economy, boosting the growth potential, stimulating job creation, and mitigating the 
adverse  effects  of  the  crisis.  This  is  visible  in  measures  that  sustain  the  acceleration  of 
digitalisation  of  the  public  administration  and  thus  addressing  an  important  investment  barrier, 
measures related to the green transition, which provide a new source of economic growth while 
allowing  phasing  out  polluting  industries,  or  measures  to  support  the  financing  of  SMEs, 
research and development, and highly innovative projects. Moreover, the plan contains measures 
that  aim  to  strengthen  social  cohesion, including  policies  aiming  at  reducing  inequalities  in 
education and integration of the most vulnerable groups in the labour market. This is visible in 
measures  destined  at  upskilling  and  reskilling  the  workforce,  measures  to  improve  the 
participation  of  women  into  the  labour  force  or  measures  to  further  improve  the  educational 
system  in  Czechia.  As  a  result,  even  though  the  plausibility  and  reasonability  of  the  cost 
estimates can only be considered medium, the positive expected impact of the plan on the Czech 
economy and society warrants a high rating in terms of commensurability and cost efficiency.  

The justification provided by Czechia on the amount of the estimated total costs of the recovery 
and resilience plan is to a medium extent reasonable and plausible, it is in line with the principle 
of cost-efficiency and commensurate to the expected national economic and social impact. 

Czechia provided sufficient information and evidence that the amount of the estimated cost of the 
reforms and investments of the recovery and resilience plan to be financed under the Facility is 
not covered by existing or planned Union financing. This would warrant a rating of B under the 
assessment criterion 2.9 of Annex V to the RRF Regulation. 

4.10 Controls and audit 

Robustness of internal control system and distribution of roles and responsibilities 

The  outline  of  the  internal  control  system  has  a  clear  structure.  Control  actors  are 
identified across all levels, but not all elements are fully defined. The national set-up for the 
RRF internal control system consists of two levels: 

a.  Management verifications carried out by the component owners and coordinating body; 

and 

b.  Audits carried out by the national audit body. 

74 

 
 
 
The  Managing  Council  of  the  national  recovery  and  resilience  plan  is  the  highest  decision-
making and approval body with the responsibility for the overall coordination and monitoring of 
the Plan. Payment claims have to be approved by this committee. The Ministry of Industry and 
Trade, as the central coordinating body for the RRF and its implementation, is responsible for the 
coordination, the monitoring and the reporting of the Plan and is the main point of contact for the 
Commission.  This  body  is  also  responsible  for  the  drawing-up  of  the  payment  claims  and 
management declarations.  

The Plan specifies 11 component owners for 26 components. The main responsibility for the 
first level of the control system lies on component owners. Component owners are responsible 
for (i) the overall management of the particular component; (ii) verification of the compliance of 
implemented  measures  with  applicable  Union  and  national  law;  and  (iii)  verification  of  the 
progress in  achievement of defined milestones and targets.  In order to monitor the progress on 
milestones  and  targets,  component  owners  will  set  up  system  with  regular  monitoring  reports 
submitted  by  the  final  recipients.  The  supporting  documents  related  to  the  fulfilment  of 
milestones will be stored in the main IT system, which is not in place yet, or in the systems at the 
level of component owners. 

The  second  level  of  the  control  system  is  entrusted  to  the  audit  body  –  Department  52  – 
Audit  authority  at  the  Ministry  of  Finance.  This  audit  body  is  functionally  and 
organizationally independent from the coordinating body and the component owners. The audit 
body for its audit work follows the international audit standards. In the Plan it is indicated that 
the audits will verify whether (i) the Plan is implemented in compliance with applicable Union 
and national law; (ii) internal control system provides adequate assurance that defined milestones 
and  targets  have  been  achieved;  and  (iii)  mechanisms  to  prevent,  detect  and  correct  serious 
irregularities  and  avoid  double  funding  are  working  efficiently.  The  audit  body  describes  in 
general the audit approach which includes (i) system audits to provide reasonable assurance that 
the  system  functions  effectively  and  prevents,  detects  and  corrects  irregularities;  and  (ii) 
substantive testing to verify that defined milestones and targets have been achieved at the project 
level. The audit strategy will be drafted within 3 months from the approval of the Plan and will 
be  reviewed  on  annual  basis.  This  will  be  followed-up  through  the  specific  milestone  to  be 
fulfilled before the first payment request is submitted to the Commission. The audit work will be 
carried  out  at  the  level  of  the  coordinating  body,  component  owners  and  if  needed  also  at  the 
level  of  final  recipients.  This  body  is  also  the  audit  authority  for  the  ESI  Funds  as  is  assessed 
positively  by  the  relevant  Commission  services.  Extensive  experience  from  the  audit  of  ESI 
Funds is  evident as regards the quality of procedures  for drawing-up of the summary of audits 
and planning and carrying out the audit activities. 

Adequacy of control systems and other relevant arrangements 

Concerning  the  prevention  and detection  of  serious  irregularities,  the  Plan  describes  to  a 
certain  extent  the  national  procedures  and  measures.  The  regular  risk  analysis  (including 
fraud  risk  analysis)  will  be  carried  out  by  the  coordinating  body  and  component  owners  on 
annual  basis.  Moreover,  all  bodies  involved  in  the  implementation  of  the  Plan  will  follow 
national anti-corruption strategy. The Plan also clarifies that the data mining and risk scoring tool 
Arachne will be used for the verification of the absence of conflict of interest, fraud, corruption 

75 

 
 
and,  where  relevant,  double  funding.  This  tool  will  be  also  used  for  the  monitoring  of  risks 
related to the implementation of the Plan and its results will be used for the purpose of updating 
the fraud risk assessment. 

The  Plan  describes  that  component  owners  will  be  responsible  for  the  collection  and 
storage of data on final recipients in line with requirements of Article 22(2), point (d) of the 
RRF  Regulation.  However,  the  assurance  that  the  application  of  beneficial  ownership  in  the 
context  of  the  RRF  internal  control  system  and  the  procedure  describing  the  collection  and 
storage  of  this  data  are  fully  aligned  with  the  definition  of  ‘beneficial  owners’  as  defined  by 
Article 3, point 6 of Directive 2015/849 is pending. Notably, the RRF Regulation requires that, 
when implementing funds under the RRF Member States must provide information on the use of 
funds in relation to beneficial owner(s), including corporate entities, trusts and legal entities, as 
defined in point 6 of Article 3 of Directive (EU) 2015/849 of the European Parliament and of the 
Council. The specific definition as defined in Directive 2015/849 is: 

‘beneficial  owner’  means  any  natural  person(s)  who  ultimately  owns  or  controls  the  customer 
and/or  the  natural  person(s)  on  whose  behalf  a  transaction  or  activity  is  being  conducted  and 
includes at least: 

(a) in the case of corporate entities: 
(i) 

the natural person(s) who ultimately owns or controls a legal entity through direct or 
indirect  ownership  of  a  sufficient  percentage  of  the  shares  or  voting  rights  or 
ownership interest in that entity, including through bearer shareholdings, or through 
control  via  other  means,  other  than  a  company  listed  on  a regulated  market  that  is 
subject to disclosure requirements consistent with Union law or subject to equivalent 
transparency  of  ownership 
international  standards  which  ensure  adequate 
information. 

A shareholding of 25 % plus one share or an ownership interest of more than 25 % in 
the customer held by a natural person shall be an indication of direct ownership. A 
shareholding of 25 % plus one share or an ownership interest of more than 25 % in 
the  customer  held  by  a  corporate  entity,  which  is  under  the  control  of  a  natural 
person(s), or by multiple corporate entities, which are under the control of the same 
natural person(s), shall be an indication of indirect ownership. This applies without 
prejudice to the right of Member States to decide that a lower percentage may be an 
indication of ownership or control. Control through other means may be determined, 
inter  alia,  in  accordance  with  the  criteria  in  Article  22(1)  to  (5)  of  Directive 
2013/34/EU of the European Parliament and of the Council (29); 

(ii) 

if, after having exhausted all possible means and provided there are no grounds for 
suspicion,  no  person  under  point  (i)  is  identified,  or  if  there  is  any  doubt  that  the 
person(s)  identified  are  the  beneficial  owner(s),  the  natural  person(s)  who  hold  the 
position of senior managing official(s), the obliged entities shall keep records of the 

76 

 
 
 
 
actions  taken  in  order  to  identify  the  beneficial  ownership  under  point  (i)  and  this 
point; 

(b) in the case of trusts: 
(i) 
the settlor; 
(ii) 
the trustee(s); 
(iii) 
the protector, if any; 
(iv) 
the beneficiaries, or where the individuals benefiting from the legal arrangement or 
entity have yet to be determined, the class of persons in whose main interest the legal 
arrangement or entity is set up or operates; 
any other natural person exercising ultimate control over the trust by means of direct 
or indirect ownership or by other means; 

(v) 

(c)  in the case of legal entities such as foundations, and legal arrangements similar to trusts, 
the natural person(s) holding equivalent or similar positions to those referred to in point 
(b); 

Accordingly, dedicated milestones have been proposed to ensure that the compliance review of 
the national procedures on the application of the beneficial ownership rules and the procedures 
describing the collection and storage of data on final recipients are finalized, including the use of 
the definition of beneficial owner as defined above, before the first payment request is submitted 
to  the  Commission.  The  satisfactory  fulfilment  of  these  milestones  will  give  the  necessary 
reassurance  that  the  legal  obligation  to  apply  this  definition  of  beneficial  ownership  is  met, 
including  on  trusts.  Should  the  milestones  not  be  considered  satisfactorily  fulfilled,  as  for  all 
such  milestones  and  targets  related  to  the  national  control  framework,  all  payments  under  the 
RRF  will  be  suspended.  Once  implemented,  the  application  of  these  milestones  will  be 
reinforced by the management declaration at the time of payment requests, as required by Article 
22(2)(c)(i)  of  the  RRF  Regulation.  Such  management  declaration,  with  the  accompanying 
summary of audits, will provide assurance that the control systems give the necessary assurances 
that  the  funds  were  managed  in  accordance  with  all  applicable  rules,  in  particular  rules  on 
avoidance of conflicts of interests. 

As  per  Article  22(2),  point  (b)  of  the  RRF  Regulation  the  Member  States  shall  take 
appropriate  measures  to  prevent,  detect  and  correct  conflict  of  interests  as  defined  in 
Article 61 of the Financial Regulation. The Plan remains very general concerning the control 
of  conflict  of  interests.  The  coordinating  body  should  draft  procedures  for  component  owners 
and  other  bodies  implementing  reforms  and  investments  on  the  verification  of  conflict  of 
interests in line with Article 61 of the Financial Regulation for all beneficial owners as defined 
by  Article  3,  point  6  of  the  Anti-money  laundering  Directive.  Accordingly,  a  milestone  is 
included in the Plan to ensure a guidance and procedures on the avoidance and management of 
conflict of interests is available before the first payment request is submitted to the Commission. 
Following  the  audit  carried  out  by  the  Commission  services  (DG  REGIO,  DG  EMPL  and  DG 
AGRI)  on  other  EU  programmes,  serious  deficiencies  in  the  design  and  functioning  of  the 
system to avoid a conflict of interests have been identified. Moreover, the coordinating body is 

77 

 
 
 
 
classified in  category 3  by the national audit authority  also  for inadequate procedures to  avoid 
conflict  of  interests.  This  means  that  major  issues  have  been  detected  and  substantial 
improvements are needed by the Ministry of Industry and Trade. Therefore, dedicated milestones 
are included in the Plan to ensure effective development and implementation of the action plan 
on  the  system  that  is  intended  to  be  used  for  the  Plan  in  the  area  of  conflict  of  interests. 
Moreover, a milestone on the independent audit of the effectiveness of the RRF internal control 
system to prevent, detect and correct situations of conflict of interests is included in the Plan as 
well. 

The basic implementation of the components will be tracked in the systems at the level of 
component  owners.  The  main  IT  system  for  the  RRF  will  be  under  the  responsibility  of  the 
coordinating body and is currently under development with the estimated availability at the latest 
by the submission of the first payment request. The aim of this system is to collect and aggregate 
data  on  milestones  and  targets  and  draw-up  payment  claims  and  reporting  on  progress  of  the 
Plan.  A  dedicated  milestone  on  the  repository  system  has  been  included  in  the  Plan  to  be 
completed  before  the  submission  of  the  first  payment  request.  The  audit  body  will  audit  this 
system in the first system audit at the level of the coordinating body. 

Adequacy of arrangements to avoid double EU funding 

The Czech authorities recognize that there are risks in respect of funding from several EU 
and  national  sources.  The  Czech  authorities  will  use  the  following  mechanisms  and  tools  to 
address  double  funding:  (i)  ex-ante  trainings  and  guidance  provided  to  the  final  recipients;  (ii) 
systematic segregation of funds; (iii) double funding verification before the Grant agreement is 
concluded;  (iv)  declarations  of  honour;  and  (v)  use  of  various  registers.  The  fact  that  the 
implementing  bodies  for  RRF  are  also  involved  in  implementing  of  the  ESI  Funds  gives 
prerequisite  for  cross-checking  the  data  with  traditional  ESI  Funds  management  systems  and 
avoid  double  funding.  Matrix  of  support  and  supported  activities  will  be  finalized  by  the 
coordinating body after the approval of the Plan with the objective to identify areas with a risk of 
potential double funding.  The additional measures such as coordination, controls and audits will 
be put in place for such areas. 

Legal empowerment and administrative capacity of control function 

The legal mandate of the bodies involved in the implementation of the Plan, the description 
of their tasks and responsibilities was adopted in the Government resolution No 467 on 17 
May  2021.  Component  owners  are  defined  in  the  Plan  (in  total  11  component  owners).  The 
coordinating  body  is  responsible  for  the  drawing  up  and  submitting  of  payment  claims.  The 
Managing  Council  is  responsible  for  the  approval  of  payment  claims.  The  audit  body  is 
responsible for the drawing up of the summary of audits which will be signed by the head of the 
audit  body.  The  Plan  provides  sufficient  information  about  the  administrative  capacity  of  the 
coordinating body and the audit body. The coordinating body is currently assessing the personnel 
needs of component owners and in the Plan it is indicated that their administrative capacity will 
be increased.  

The arrangements proposed by the Czech authorities in the Plan to prevent, detect and correct 
corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the  RRF, 

78 

 
 
including  the  arrangements  aimed  to  avoid  double  funding  from  the  RRF  and  other  Union 
programmes, are assessed as adequate. This would warrant a rating of A under the assessment 
criterion 2.10 of Annex V to the RRF Regulation. 

4.11 Coherence  

The plan provides a comprehensive response to the consequences of the COVID-19 crises, 
as well as a response to the main challenges identified based on the country´s performance 
and the systemic weaknesses of the Czech economy. The plan builds on the global vision of 
Czechia  as  an  innovative  economy  that  drives  sustainable  economic  growth,  a  modern  state 
providing quality public services to citizens and a healthy country. By working towards all three 
pillars, the plan focuses on six key policy areas, which are implemented through 26 components.  

Mutually-reinforcing measures 

The plan presents a comprehensive package of reforms and investments.  It builds to some 
extent  on  synergies  among  components  (e.g.  when  complementing  significant  infrastructure 
investment  with  reforms  to  speed  up the  construction  process  and  anti-corruption  measures,  or 
when applying energy efficiency requirements for public and residential buildings renovations or 
digital  transition  of  the  public  administration).  Reforms  are  concentrated  in  the  first  years  in 
order to create conditions for effective and targeted investment (e.g. developing e-health systems 
or  reform  of  educational  curriculum)  and  addressing  several  implementation  barriers  (e.g.  for 
faster  construction  process  or  buildings´  renovation).  Investments  in  new  user-friendly 
information system can be found in a number of components to help modernize and improve the 
quality  and  efficiency  of  the  public  services  and  policies  (e.g.  digitalization  of  hospitals  or  of 
judicial processes, digitalisation of schools and universities etc.). 

While  the  overall  balance  between  reforms  and  investments  is  ensured  at  the  level  of  the 
plan, investment is not accompanied by relevant reforms for several measures. This applies 
in particular to measures to support renewable energy sources, clean mobility as well as digital 
and sustainable transport infrastructure. Some important reforms in healthcare are underway, but 
they are not a part of the plan. 

No cases have been observed of areas where the measures proposed within any component 
(be it reforms or investments) contradict or undermine each other’s effectiveness. 

Complementarity of measures 

The plan presents a broadly  consistent vision throughout the thematic areas, components 
as well as regards the proposed reforms and investments.   

Components  from  1.1  to  1.6  pave  the  way  for  the  digital  transformation  of  the  economy. 
The  eGovernment  measures  aim  at  simplifying  communication  with  public  administration, 
increasing  satisfaction  of  users,  improving  interoperability  and  optimising  processes,  including 

79 

 
 
 
across a number of components. Cybersecurity should be developed in a systemic way focusing 
on  modernisation  and  expansion  of  police  forces’  capacity  to  detect,  identify  and  respond  to 
security and ICT incidents and on increasing cybersecurity of at least ten information systems. 
The  plan  aims  to  speed  up  the  deployment  of  digital  infrastructure,  in  particular  very  high 
capacity  networks,  that  should  serve  as  a  backbone  for  further  digital  transformation  of  Czech 
economy  and  society.  Digital  capabilities  of  businesses  should  be  focused  on  improving  the 
digital skills in the sectors with strategic importance for Czechia. Finally, digital skills are part of 
the school curricula reform as well as support to universities under components 3.1 and 3.2. 

In response to the target for achieving carbon neutrality, the green economy transition is 
pursued through five components focusing on reducing GHG emission. It focuses mainly on 
the  building  sector  and  transport  while  mobilizing  the  increase  of  RES  and  promoting  climate 
adaptation measures. The vast renovation programme to improve energy and green performance 
of  buildings  is  pursuing  through  the  dedicated  components  2.2  and  2.5  covering  residential 
buildings  as  well  as  public  buildings.  The  building´s  renovation  itself  integrates  a  number  of 
measures  improving  energy  performance,  integrating  RES  installations,  as  well  as  addressing 
climate  adaptation  or  awareness-raising  activities.  The  investment  is  partly  combined  with 
reforms,  which  are  addressing  implementation  bottlenecks  (e.g.  project  pipeline  preparation, 
support  for  training  and  retraining  of  workers  deploying  green  technologies,  one-stop  shop  for 
project applicants).   

Well-developed education components 3.1 and 3.2 are building on each other and address a 
key challenge of Czechia  – insufficient quality and inclusiveness of education at all levels. 
While component 3.1 focuses on revising the curricula for primary and secondary education in 
order to reinforce IT education, including improving the digital skills of teachers, component 3.2 
aims  at  addressing  growing  inequalities  in  education  by  providing  a  complex  support  to 
disadvantaged  schools  and  at  increasing  the  capacities  of  universities  and  adapting  the  study 
programmes to new forms of learning and new fields, in line with changing needs of the labour 
market.  This  is  linked  to  measures,  which  aim  at  improving  the  quality,  performance  and 
internationalization  of  higher  education  institutions  in  the  health  sector  (component  5.1)  or 
digitalisation  of  innovative  businesses  (component  5.2).  The  education  components  combine 
reforms and investments in a mutually supportive way to bring about changes in the content and 
form of education at all levels.  

A legislative reform ensuring stable financing of pre-school facilities for children below 3 years 
of age, while aiming at ensuring access to affordable childcare for children below 3 in all region 
will go along with the investment in increasing the availability of childcare services for children 
under the age of three which aims at increasing access to pre-school childcare for families with 
lower incomes and help in improving the educational outcomes of their children. 

Public administration components (4.2, 4.3 and 4.4) combine reforms and investments and 
should  create  a  more  favourable  investment  framework,  business  environment  and 
improve  quality  of  public  services,  including  at  regional  level.  The  components  cover 

80 

 
 
business environment, reform of the judiciary aiming at strengthening the legislative framework 
and  transparency  in  the  areas  of  courts,  judges,  prosecutors  and  bailiffs,  the  fight  against 
corruption, increasing the analytical capacities in the public administration and are closely linked 
to  digitalisation of public administration or public services  in  number of  components (e.g. 1.1, 
1.2, 1.4, 1.6, 4.5).   

Two health components focusing on investing in healthcare infrastructure and improving 
the education of health workers in acute care (6.1) and on increasing the resilience of the 
cancer  prevention  and  care  system  (6.2),  together  with  component  5.1  which  focuses  on 
excellence of research in selected medical science disciplines  and new university facilities 
for  medical  and  pharmaceutical  studies  are  complementary  to  each  other  and  combine 
both reforms and investments. Key reforms in the components 6.1 and 6.2 aim at strengthening 
the  resilience  of  the  health  system  which  have  been  negatively  affected  by  the  COVID-19 
pandemic, including in its part linked to cancer prevention and care or cardiovascular diseases. 
Building  a  centre  for  cardiovascular  and  transplant  medicine  under  component  6.1  will  be 
complemented by support to R&D consortium in this area under component 5.2. Establishment 
of  the  Czech  Oncology  Institute  and  Establishment  and  development  of  the  Centre  for  Cancer 
Prevention  and  Infrastructure  for  Innovative  and  Supportive  Care  at  the  Masaryk  Oncology 
Institute  under  component  6.2  is  accompanied  by  preparing  a  new  National  Oncological 
Programme for the Czech Republic for 2022-2030 and the new screening programmes for cancer 
prevention  under  the  same  component  and  by  support  to  R&D  consortia  projects  under 
component  5.2.  Digital  transformation  of  healthcare  is  supported  by  appropriate  measures  in 
Components 1.1 and 1.2 

As Czechia largely benefits from the Cohesion policy funds, significant complementarities 
are  visible  and  in  principle  spelled  out  in  the  text,  but  level  of  details  vary  across  the 
components. This is due to the fact that both programming documents, namely the Partnership 
Agreement and programmes (2021– 2027) are still pending finalisation and adoption. Therefore, 
an overall description of synergies at the horizontal level accompanied by summary tables offer 
only  a  first  overview  of  intended  complementarities  per  areas  covered  by  both  funds.  This  is 
complemented by a mechanism to avoid “double funding”. All potential areas of support under 
the  Cohesion  policy  funds  indicated  in  the  plan  are  still  subject  to  negotiations  with  the 
Commission and cannot be prejudged on the basis of the text in the plan. 

The plan does not present inconsistencies or contradictions between the different components. In 
order to promote wider coherence across instruments, notably with the European cohesion policy 
funds, a balanced territorial allocation of resources is encouraged. 

Taking  into  consideration  the  qualitative  assessment  of  all  components  of  Czechia´s  recovery 
and  resilience  plan,  their  individual  weight  (size,  relevance,  financial  allocation)  and  their 
interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a medium extent, represent coherent actions. This would warrant a rating 
of B under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

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ANNEX: TAGGING / COSTING  

Int. Field = intervention field 
Coeff. = Coefficient for the calculation of support to climate change objectives and to digital transition, 
on the basis of Annex VI and Annex VII of the RRF Regulation 

Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

 1.1.1 

 1.1.2 

 1.1.3 
 1.1.4 
 1.1.5 

 1.2.1 

 1.2.2 

 1.2.3 

 1.2.4 

 1.2.5 

 1.2.6 

 1.3.1 

 1.3.2 

 1.3.3 

 1.3.4 

Digital services for end users 
Development of open data 
and public data 
Conditions for quality data 
pool management and 
ensuring controlled data 
access 
eHealth 
Digital approach to justice 
Building and further 
development of agenda 
information systems 
Building and development of 
core registers and facilities 
for eGovernment 

Cyber security 
Centers of competence for 
support of eGovernment and 
eHealth 
Building and development of 
systems supporting eHealth 
Creating the conditions for 
digital justice 
Improve the environment for 
the deployment of electronic 
communications networks 
Supporting the development 
and further development of 
the 5G ecosystem 
Building high-capacity 
connections 
Coverage of the 5G corridors 
and support for the 

Budge
t 
(EUR 
mn) 

40.03 

6.36 

2.47 
55.89 
7.43 

36.58 

101.49 

105.84 

14.3 

12.76 

6.09 

62.84 

1.45 

111.93 

27.49 

82 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

011 

011 

Coeff. 
% 
100% 

100% 

011 
013 
011quater 

100% 
100% 
100% 

011 

100% 

011 
021quinqui
es 

100% 

100% 

013 

095 

100% 

100% 

011quater 

100% 

053 

100% 

054 

053 

100% 

100% 

054bis 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

Budge
t 
(EUR 
mn) 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

development of 5G networks 
Coverage of “white” 
municipalities in the 
investment-difficult places in 
rural areas by the 5G signals 
Research and development 
activities related to the 
development of 5G networks 
and services 
Reform: Institutional reform 
of the coordination and 
support system for digital 
transformation of economy 
(incl. RIS 3) 
European Centre of 
Excellence in AI "for Citizens 
Safety and Security" 
European Digital Media 
Observatory Hub (EDMO) 
Digital Transformation of 
best practice and know-how - 
establishement of strategic 
think-tank (Samuel Neaman 
Institute) 
Digital Transformation 
Platform 
European Blockchain 
Services Infrastructure 
(EBSI) - DLT bonds for SME 
financing 

5G Demonstration projects 
Reform: Institutional support 
for start-ups - EU Startup 
Nations Standards 
Czech Rise-Up 
Entepreneurship support post-
COVID-19 
Pre/seed. digital strategic 

11.78 

11.78 

0.35 

9.39 

1.69 

6.68 

4.32 

8.84 

43.2 

0.35 
23.56 

5.89 
54.98 

83 

 1.3.5 

 1.3.6 

 1.4.1 

 1.4.1.1 

 1.4.1.2 

 1.4.1.3 

 1.4.1.4 

 1.4.1.5 

 1.4.1.6 

 1.4.2 
 1.4.2.1 

 1.4.2.2 
 1.4.2.3 

054bis 

100% 

054bis 

100% 

021ter 

100% 

009bis 

100% 

021ter 

100% 

021ter 

100% 

021ter 

100% 

010 
010bis.  
021ter 

100% 

100% 

010 
010 

018 
010 

100% 
100% 

40% 
100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

technologies and spin-off 
investment funds 
Start-up internationalization 
Regulatory sandboxes 
Certification of strategic 
technologies 
Quantum Communication 
Infrastructure (QCI) 
Digitization of aviation 
industry 
Reform: The Creation of The 
Platform for the digitasation 
of the industry 
European and National 
Digital Innovation Hubs 
e/DIH 
European Reference and 
testing facility 
Programmes for digital 
transformation of 
manufacturing and non-
production companies and 
increasing resilience 
(including cybersecurity) 
Implementation of the 
recodified construction law 
and zoning law into Practice 
Creation of new Information 
system for the agenda 
Development and use of 
Public sector data in area 
planning 
Full use of Benefits from 
Digital Proceedings 
New technologies and 
digitization on railway 
infrastructure 
Electrification of railways 
Improving the environment 

 1.4.2.4 
 1.4.2.5 

 1.4.3 

 1.4.3.1 

 1.4.3.2 

 1.5.1 

 1.5.1.1 

 1.5.1.2 

 1.5.1.3 

 1.6.1 

 1.6.2 

 1.6.3 

 1.6.4 

 2.1.1 
 2.1.2 
 2.1.3 

Budge
t 
(EUR 
mn) 

8.44 
5.89 

4.32 

7.07 

39.27 

0.39 

8.68 

5.66 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

015 
010 

40% 
100% 

009bis 

100% 

021 quarter 

100% 

009bis 

100% 

010 

100% 

010 

100% 

010bis 

100% 

181.64 

010 

100% 

055 

011 

055 

055 

100% 

100% 

100% 

100% 

070 

100% 

36.35 

12.98 

0.97 

6.49 

37.51 
263.76 
453.69 

070 
066bis 
069 

40% 
100% 
40% 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

Budge
t 
(EUR 
mn) 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

 2.1.4.1 
 2.1.4.2 

 2.1.4.3 

 2.2.1 

 2.2.2 

 2.2.3 

 2.3.1 

 2.3.2 

 2.4.1.1 

 2.4.1.2 

 2.4.1.3 

 2.4.2.1 

 2.4.2.2 

 2.4.2.3 
 2.5.1 

81.97 

23.56 

196.37 

113.62 

120.3 
43.75 

(railway infrastructure 
support) 
Increasing safety at railway 
crossings 
Construction objects 
Protection of vulnerable road 
users (cyclists. pedestrians) 
Implementation of energy-
saving measures in the 
renovation of state buildings 
Implementation of energy-
saving measures to renovate 
public lighting systems 
Implementation of energy-
saving measures in the 
renovation of public buildings  129.02 
New fotovoltaic energy 
sources 
Modernization of distribution 
of heat in district heating 
system 
Construction of public 
transport infrastructure 
(Prague) 
Building non-public 
infrastructure 
Building recharging points for 
residential buildings 
Vehicles (el. H2) for business 
including E-cargo bikes 
Vehicles (el. H2) and non 
public charging stations for 
municipalities. regions. state 
administration 
Vehicles (battery trolleybuses 
and low-floor trams) for 
public transport in the City of 
66.77 
Prague 
Renovation and revitalization  332.17 

47.13 

11.78 

36.92 

23.56 

65.2 

5.66 

85 

069 
069 

40% 
40% 

075 

100% 

026bis 

100% 

026bis 

100% 

026bis 

100% 

029 

100% 

034bis0 

100% 

073 

100% 

077 

100% 

077 

100% 

077 

100% 

077 

100% 

074 
025bis 

100% 
100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

Budge
t 
(EUR 
mn) 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

 2.6.2 

 2.5.2 
 2.6.1 

of buildings for energy 
savings 
Replacement of stationary 
sources of pollution in 
households with renewable 
energy sources and 
installation of RES 
Flood protection 
Support of measures on small 
water courses and small water 
reservoirs 
Implementation of Land 
consolidation with a positive 
effect on the prevention of 
erosion and the capture of 
precipitation 
Building forests resilient  to 
climate change 
Retention of water in forests 
Building recycling 
infrastructure 
Circulatory solutions in 
businesses 
 2.7.2.1 
 2.7.2.2  Water saving in industry 

 2.6.5 
 2.6.6 

 2.7.1.1 

 2.6.4 

 2.8.1 

 2.8.1 

 2.8.2 

 2.8.2 

 2.8.3 

Investment support for 
revitalization of specific areas 
Investment support for 
revitalization of specific areas 
Investment support for the 
revitalization of areas in 
public ownership for non-
business use 
Investment support for the 
revitalization of areas in 
public ownership for non-
business use 
Investment support for the 
revitalization of areas in 
public ownership for business 

283.16 
99.36 

032 
040 

100% 
40% 

62.84 

040 

40% 

32.46 

050 

40% 

335.4 
11.78 

037 
040 

100% 
40% 

62.84 

045bis 

100% 

39.27 
39.27 

047bis 
047bis 

40% 
40% 

55.85 

026 

40% 

23.96 

025ter 

40% 

25.14 

026 

40% 

6.28 

046bis 

40% 

13.75 

026 

40% 

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

Budge
t 
(EUR 
mn) 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

use 
Investment support for the 
revitalization of areas in 
public ownership for business 
use 
Protection against drought 
and nature close flood 
protection of the city of Brno 
Rainwater management 
Specially protected areas and 
Natura 2000 sites and 
specially protected species of 
plants and animals 
Adaptation of aquatic. non-
forest and forest ecosystems 
to climate change. 
Implementation of the 
curricula reform and the 
DigCompEdu Framework 
Digital Equipment for 
Schools 
Development of employment 
policy (retraining and 
continuing professional 
training) - digital 
competencies 
Development of employment 
policy (retraining and 
continuing professional 
training) - competencies 
needed for digital transition 
and for addressing the needs 
of Industry 4.0 
Development of employment 
policy (retraining and 
continuing professional 
training) - Creation of a 
database of reskilling and 
upskilling courses 

 2.8.3 

 2.9.1 
 2.9.2 

 2.9.3 

 2.9.4 

 3.1.2 

 3.1.3 

 3.3.1.1 

 3.3.1.2 

 3.3.1.4 

5.89 

025ter 

40% 

29.93 
38.96 

040 
040 

40% 
40% 

21.4 

050 

40% 

26.9 

037 

100% 

22.07 

168.68 

108 

012 

100% 

100% 

127.64 

108 

100% 

127.64 

016 

40% 

0.39 

87 

011 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

 3.3.2 

 3.3.2 

 3.3.2 

 3.3.3.1.1 

 3.3.3.1.2 

 3.3.3.1.3 

 3.3.3.2.2 

 3.3.3.2.3 

 4.2.2 

 4.5.4 

Measure/Sub-Measure 
Name 

Budge
t 
(EUR 
mn) 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

Capacity building of pre-
school facilities 
Capacity building of pre-
school facilities 
Capacity building of pre-
school facilities 
Development of social care 
infrastructure (creation of 
new capacities of community-
based. outpatient and field 
social services) 
Development of social care 
infrastructure (reconstruction 
of community-based. 
outpatient and field social 
services. including facilities. 
reconversion of existing 
capacity) 
Development of social care 
infrastructure (reconstruction 
of community-based. 
outpatient and field social 
services. including facilities. 
reconversion of existing 
capacity) 
Development of social 
prevention. counseling and 
care services through the 
renewal of the electric vehicle 
fleet - electric cars  
Development of social 
prevention. counseling and 
care services through the 
renewal of the electric vehicle 
fleet - hybrid cars 
New quasi-equity instruments 
to support entrepreneurship   

Digitalisation of the cultural 
and creative sectors 

50.35 

025ter 

40% 

60.42 

026 

40% 

90.53 

026bis 

100% 

109.03 

025ter 

40% 

109.03 

026 

40% 

109.03 

026bis 

100% 

3.57 

077 

100% 

5.38 

077 

40% 

39.27 

047 

40% 

31.42 

88 

021bis 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/
Sub-
Measure 
ID 

Measure/Sub-Measure 
Name 

 4.5.6 

 5.2.2 

 5.2.4 

 5.2.6 

Creative vouchers 
Supporting the uptake of 
innovation in business 
practice 
Aid for research and 
development in the 
environmental field 
Aid for R & D in synergy 
effects with the Framework 
Programme for Research and 
Innovation 

Budge
t 
(EUR 
mn) 

21.99 

39.27 

Climate 

Digital 

Int. field 

Coeff. 
% 

Int. field 

Coeff. 
% 

020 

40% 

020 

40% 

7.85 

022 

100% 

19.64 

015 

40% 

89