For reconstruction after floods, the Czech Republic can also use money from the European budget, specifically subsidies from cohesion funds or the solidarity fund. But there won’t be many of them and it will take weeks, maybe even months, before they reach those in need.
According to estimates, the damage caused by the September floods in the Czech Republic will reach tens, perhaps up to a hundred billion crowns. The restoration of the affected area will take years.
More than a third of the estimated damage should be covered by the state budget, which is why the government has increased this year’s budget deficit by 30 billion crowns. It was approved by the House of Representatives last week. The government expects another 10 billion for next year.
Photo: EU
Other resources are offered by European funds. After the floods, the President of the European Commission, Ursula von der Leyen, announced that up to 10 billion euros (about 250 billion crowns) from the EU’s cohesion funds would be available for the affected countries.
Prime Minister Petr Fiala then specified that the European Union would release up to 50 billion crowns specifically to the Czech Republic. However, he did not emphasize that this is not new money, but the use of previously allocated funds.
50 billion from the EU for floods? The reality is different
Therefore, the Czech Republic can use up to 50 billion crowns from European subsidies for post-flood reconstruction, and in addition, in a more favorable regime, when it receives the subsidy in advance and without the need for co-financing from the national budget. But it is money that the Czech Republic is already counting on for the current subsidy period and planned to invest it for other purposes.
In addition, the Czech Republic ranks among the countries that use up their subsidy package quickly, which is becoming a disadvantage at the moment. By the end of 2027 or 2030, the country only has about 66 billion crowns left to use.
“It is money that the EU has already given us and there is not much left of it. If we were to use it, we will not use it again for things like social housing, soft projects aimed at employment and other necessary matters,” he explained in the podcast for Euractiv.cz, Deputy Minister for Regional Development Radim Sršeň (STAN).
The deputy estimates that the country will only use billions of subsidies from the subsidies, more precisely from the so-called cohesion funds. However, it is not yet “black on white”, under what conditions, he pointed out. Although the European Commission has already announced some of them, it still has to formally adjust the rules for the use of subsidies.
The Czech Republic must apply for money from the solidarity fund
The Czech Republic can receive additional money from the EU Solidarity Fund. It was created in 2002 in response to floods in Central Europe and today is part of the EU’s solidarity reserve, whose maximum annual budget the EU increased this year to 1.5 billion euros (over 38 billion crowns).
For example, it can be financed or reimbursed for the restoration of destroyed infrastructure, the provision of temporary accommodation, the cleaning up of disaster-affected areas or urgent medical assistance to the population affected by a serious threat to public health.
After the floods, the Czech Republic has twelve weeks – specifically until December 5 – to quantify the damage and request a contribution from the fund. Exactly how much he gets depends on the amount of damages. The solidarity fund can cover 2.5 percent of their amount.
“We expect that it will be about 1.5 billion for the Czech Republic. Even if it were two billion, it is a relatively small amount,” estimated Sršeň.
In any case, it will take at least a number of weeks, if not several months, before it will be possible to use European funds for the purposes of post-flood reconstruction. MEPs, who must approve support from the Solidarity Fund, therefore called on the European Commission to proceed quickly at the September plenary session.
“Unfortunately, help is not coming fast enough because the current system is too complex. How can we justify to citizens that they have to wait several months for the European Solidarity Fund to release the necessary funds? They need concrete help, and now. I urge the European Commission to make the process of releasing funds made it more efficient and faster,” urged Czech MEP Danuše Nerudová (STAN, EPP).
MEPs have been asking for the acceleration of the processes for a long time, so after the “reform” of the fund from 2014, 25 percent of the expected contribution can be used more quickly, but a maximum of 100 million euros.
A recovery fund could also help
But where the Czech Republic could find more European money to help it recover after the floods, is the recovery fund. It was created by the EU in response to the coronavirus pandemic, and member countries draw on it through already created and approved “recovery plans”. They describe exactly how the country can use the money from the pandemic fund.
“We have reserves in the National Recovery Plan, so I can imagine that if there is a will from the European Commission, we could find the money in it,” Deputy Sršeň told the editors.
“It’s at the very beginning. It’s more about our idea at the Ministry for Regional Development, but the recovery plan is in charge of the Ministry of Industry and Trade. It’s for a special meeting, which, I think, should be started,” urged Sršeň.
The Ministry of Industry and Trade did not respond to the editor’s question as to whether it was considering this possibility before the publication of the text. However, if the Czech Republic wanted to use the money from the recovery fund, it would have to adjust its National Recovery Plan, as the spokeswoman for the European Commission explained to the editors.
“The transfer of money must be formally requested from the European Commission. The Commission would then evaluate the request and the updated plan would ultimately have to be approved by the Council,” she specified.
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