Could the Czech Republic end up paying out in the EU?


Enlargement of the European Union is now just under 2 months away. Many in 10 accession countries see their entry into the EU on 1 May as an historic opportunity, hard won after years of social and economic reforms. But Czechs are curious about how their country will fare financially in the EU. Will the Czech Republic be a net beneficiary from the Union's budget?

This road bridge in central Bohemia was built with the help of over two million euros of European Union money. But the question many Czechs are now asking is: will EU funds still be available once they and the other nine new countries join the Union on May 1? That's something I discussed with Ivo Slosarcik of the Prague-based think tank Europeum.

"The amount of money the Czech Republic will receive will significantly depend on its own activity because only some money flows automatically, such as flows to farmers based on their production."

In other areas, however, it is down to individual Czech applicants, be they regions, companies or other organisations, to prepare projects, which would meet EU criteria. If they fail to do so, the country will simply miss out.

Photo: European Commission
"In the budget there is reserved some amount of money for the Czech Republic, but it doesn't mean that 100 percent of that money will really go to the Czech Republic. It will depend whether the Czech Republic will be ready to prepare projects and implement them."

Even if Czech agencies don't get organised and receive all the money available to them, Ivo Slosarcik says the Czech Republic will be a net beneficiary, even though it will not receive as much as Ireland or the Mediterranean countries did. And, he says, things should actually improve after the first few years.

"We hope that a few years later the Czech Republic will become a more intensive net beneficiary, in particular due to an increase in payments in the agricultural sector. As you know, the Czech Republic and all newcomers will start at 25 percent of Common Agricultural Policy payments. It will go up by five percent, then ten percent increase per year over the next ten years. So this will influence the amount of money the Czech Republic will get."

The astronomical clock at Prague Town Hall
The famous astronomical clock at Prague Town Hall. Prague, unlike the poorer regions of the Czech Republic, has received hardly a cent of EU money. The city is judged to be too rich, with per capita GDP rated at 125 percent of that of the EU average. The man in charge at the Town Hall, mayor Pavel Bem, says - unlike the Czech Republic in general - Prague will in fact be a net contributor to the EU.

"Prague will give more, including the fee and payment of the Czech Republic to the European Union than the city of Prague will receive in the future. So as regards the structural policy I would say we are definitely in a disadvantageous situation."

Only around 10 percent of the Czech population live in the capital; the rest of the country will be hoping that they at least benefit financially from European Union membership.