The economic impacts of the current pandemic may significantly increase the differences among regions in the Czech Republic, the European Commission pointed out in set of new recommendations. According to Brussels, all EU countries should now focus on investing in health care and helping affected companies and employees.
Brussels delivers recommendations regularly to all member states on how to boost economic performance in the economic cycle known as the European Semester.
The latest package of suggestions is influenced by the drop in economic growth due to the spread of coronavirus, which prompted the EC to temporarily relax the rules on budget deficits and state aid to companies.
“For this immediate phase, our focus is on investing in public health and protecting jobs and companies,” said the EC Vice President Valdis Dombrovskis on the temporary relaxation of fiscal surveillance. However, he noted that as soon as conditions allow it, the EU executive will “need to strike a balance between achieving fiscal sustainability while also stimulating investment.”
Commissioner for Economy Paolo Gentiloni emphasized that money invested by countries to support companies or employees should take into account current EU priorities, in particular, “making a success of the green and digital transitions and ensuring social fairness.”
That also means everyone must pay their share: there can be no place for aggressive tax planning in a Europe of solidarity and fairness, said Gentiloni, clearly referring to US technology companies such as Google and Facebook, which many countries want to tax to fill gaps in budgets caused by the crisis.
In the case of the Czech Republic, the European Commission stated that the current situation poses a significant risk of increasing regional and local disparities.
According to Brussels, the proof of this is already evident in the growing differences between the Karlovy Vary and Ústí nad Labem regions and other parts of the country. According to the EC, the looming increase in unemployment or income inequality calls for a “targeted political solution.”
The Commission said that the Czech Republic had managed to reduce the spread of the coronavirus thanks to the timely implementation of measures, adding that there is room for improvement for the Czech healthcare system in the future.
“To mitigate the impact of COVID-19, it will be necessary to improve the flexibility and crisis preparedness of the health care system in the future,” the EC recommended.
According to Brussels, the crisis in the Czech Republic might have a special impact on vulnerable groups, including women caring for pre-school and school-age children as the schools were closed for two months.
The Czech government could reduce the impact of the pandemic by investing in childcare and easing working conditions for mothers, for example, through flexible working hours.
The Commission also recommended investing more in education as the public expenditure on education per pupil is quite low in the Czech Republic.
Title image: Plant processing complex of food company Setuza in Usti nad Labem, Czech Republic, seen on Monday, Feb. 5, 2007. Investment group M. L. Moran sold 100 percent of Cesky olej and a controlling stake in food company Setuza to Campaspol, M.L. Moran said today. Campaspol is a joint venture of German Campa and Czech Spolchemie companies. The transaction whose price was not disclosed has to be okayed by the anti-monopoly office UOHS. (AP Photo/CTK, Libor Zavoral)