The Czech Republic and the Lisbon process

The Czech Republic has prioritised the areas of competitiveness, employment and sustainability of public finance. It scores highly in areas such as new technology and education, but less well in labour productivity.

The public debate on the Lisbon strategy in the Czech Republic is only irregular and informal. Last year the government set four main priority areas for the Czech economic policy in connection with the Lisbon strategy. These are competitiveness, employment, sustainability of public finance and sustainable development.

Competitiveness: the Czech government claimed it would focus on R&D especially by enhancing the non-governmental investment in R&D. It wants to support innovation through the promotion of progressive technologies and support to entrepreneurship and SMEs as well. In October 2004 it endorsed a new programme designed to overcome administrative barriers to entrepreneurship. 

Employment:  The government wants to take measures in the field of education (via a law on further education) and increase levels of employment especially through raising motivation to work and fighting long-term unemployment through higher investment in HRD (Human Resources Development). 

The deep reforms providing the long term ‘Sustainability of public finances’ will be crucial for macroeconomic stability, meeting the Maastricht criteria and the requirements of the Stability and Growth Pact. Therefore all the other priorities should probably be subordinated to the second stage of public finance reform consisting of the reform of the pension system, modernisation of the social security system, tax reforms. On the other side, the political will to start the radical reforms will not be strong, especially in pre-election period (election scheduled for June 2006, but early election still remains an option due to government crisis). The later the reforms come, the stronger the natural pressure from financial markets will be. Urgent need for public finance reform will therefore strongly limit the government in the implementation of other priorities.

Sustainable development: The European Strategy for Sustainable Development and the Strategy for Food Security are supposed to be fully implemented in the framework of the third pillar of the strategy.

Overall there was very little public discussion on the ongoing relaunch of the Lisbon agenda. The Czech government issued its position in February 2005, supporting the Commission’s proposal. The last major conference took place in March 2005 under the auspices of the vice-chairman of the senate. The emphasis in discussion was put on two most burning issues – research and development and healthy public finances. 

The Czech government supports the European Commission's intention to focus on growth and jobs as well as being in favour of fewer priorities and stronger political responsibility for achieving the goals. Vice Prime Minister Martin Jahn stated that "it is absolutely necessary to attain the economic and social goals first to be able to assure high environmental standards". The government also claimed that "well and smoothly functioning internal market is a key area to attain the Lisbon goals" and therefore it "strongly supports further progress in free movement of services and the labour force". 

The Czech-Moravian Confederation of Trade Unions (CMKOS) strongly support the Lisbon strategy, but they share the current doubts of ETUC (European Trade Union Confederation) about social goals being left out and too much focus being on liberalisation and weakening social rights.

EUROPEUM Institute for European Policy (www.europeum.org): Strongly supports the changes proposed by European Commission, but recalls that the most burning problems - low productivity growth, employment, R&D - must be solved primarily at national level.

This article was written by EURACTIV.cz, the Czech partner portal of EURACTIV

Although participation of the Czech Republic in the Lisbon Process has been officially declared in the document 'Strategy towards the Enlarged EU' in November 2001, the Czech Republic has truly been involved in the process only since 2003. In March 2003 the government adopted the 'Report on the current position of the Czech Republic towards the Lisbon Process', and starting from May 2003, national MPs have been present at the negotiations of the Council. 

The main co-ordination role in the process is undertaken by the Czech prime minister. The key institutions involved in the process in the Czech Republic comprise: Ministry of Social affairs, Ministry of Education, Ministry of Informatics, Ministry of Finance, Ministry of Foreign Affairs, Ministry of Transport, Czech National Bank, Ministry of Industry and Trade, Ministry of Environment, Ministry for Regional Development and Office for the Protection of Competition. To enhance co-operation and communication among the relevant institutions, a special interdepartmental committee for the Lisbon Strategy has been established at the Office of the Government. 

In most of the criteria, the Czech Republic is average in comparison to the other EU member states. According to the latest Lisbon scoreboard by CER (Centre for European Reform) the Czech Republic is number 16 in the 'Lisbon league table'. The Czech Republic lags behind the other member states especially in terms of labour productivity, where it reached only 64% of the EU average. 

Current gross expenses on research and development (GERD) are significantly lower than the EU average. During the year 2001 it accounted for 1.3 % GDP, which is far behind the Lisbon goal of 3% GDP for GERD. It is a positive fact that nearly half of the expenses are covered by the private sector. 

On the positive side the Czechs received top marks from the Commission for the use of new technology (93% of businesses have access to the internet, whereas the average in the EU-15 is 86%).

In the area of education the Czech Republic has one of the highest percentages of population who have achieved at least higher secondary education (92%). On the downside it has an extremely low share of university graduates (11.6 %).

The total employment rate in the Czech Republic (approximately 65 %) slightly exceeds the EU average, but is far from the goal of 70%. The Czech Republic has a very low level of poverty risk mainly thanks to the low differentiation in incomes and high share of social transfers. On the other hand there are hidden dangers in structural unemployment. Long term unemployment accounts for more than 40% of total unemployment and the Czech Republic has also quite high differences (although lower than EU average) from region to region.

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