Government Approves Request For Reduced EU Loan of CZK 19.4 Billion

The original proposal was for a significantly larger loan of CZK 137.4 billion. Credit: Freepik.

Prague, Aug 24 (CTK) – The Czech government yesterday approved a request for a reduced loan of CZK 19.4 billion from the European Commission, according to CTK sources.

The original proposal was for a significantly larger loan of CZK 137.4 billion. The Commission will now assess the Czech request.

Based on the new proposal, the ministries of regional development, interior, and industry and trade should receive the money from the loan.

The Regional Development Ministry is expected to receive CZK 8.4 billion, the Interior Ministry CZK 8 billion, and the Industry and Trade Ministry CZK 3 billion. The environment, transport, education, labour and social affairs, and health ministries, on the other hand, will no longer use money from the loan.

In the original proposal, the Interior Ministry was to use CZK 6.5 billion from the loan, but the most expensive item, cyber security, should now receive a further CZK 1.5 billion. The Ministry of Industry and Trade intends to use the loan to support projects in microelectronics and communications technology and co-investment funds for the development of strategic technologies. The Ministry of Regional Development will spend the money on affordable housing.

The Ministry of Environment has waived the loan on the condition that it receives other loans from the carbon credits in 2024 and 2025 for the New Green Savings Programme, each amounting to CZK 10 billion. The Transport and Education Ministries will use other sources to pay for reforms and investments in rail transport and schools.

Education Minister Mikulas Bek (STAN) said yesterday that he would explain the financing of his ministry’s reforms on Monday, 4 September, alongside Prime Minister Petr Fiala (ODS).

The Ministry of Labor and Social Affairs withdrew from the support of social infrastructure worth CZK 5 billion, while the health sector will not use the planned CZK 3.3 billion from the Commission’s loan.

EU member states have to submit their loan applications along with requests for changes to the already approved National Recovery Plan. The plan was established by the EU to mitigate the effects of the COVID-19 epidemic and restart the economy using European money from the EU’s Recovery and Resilience Facility between 2021 and 2027. The loans have a maturity of 30 years as of the date of the provision of the respective tranche.


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