The Czech government approved a request for a loan from the EU’s recovery fund – the Next Generation EU – which is significantly lower than initially proposed.
The original proposal envisaged a loan worth €5.7 billion, but it was reduced to €805 million. Industry and Trade Minister Jozef Síkela (STAN) confirmed the amount at a press conference after the government cabinet meeting on Wednesday.
According to the new proposal, only the ministries of regional development, interior and industry and trade should receive the money from the loan. Síkela said the country will use the money for digitalisation, chip development, new technologies and affordable housing projects.
Projects concerning the health sector and education are no longer part of the loan as initially planned.
“The reduction is based on negotiations and consultations with the European Commission, which clearly showed us that some projects would be better financed from the state budget, or in the case of transport projects, for example, through a loan from the European Investment Bank,” Síkela said.
“Also, in view of the fact that some conditions for some types of projects as prepared by the European Commission are too binding,” he added.
Czechia is currently trying to consolidate its public finances. As EURACTIV.cz understands, a high loan from the EU recovery fund was seen as too risky for the state budget.
EU countries have to submit the loan application at the same time as the request for changes in the already approved National Recovery Plan – a plan was created to mitigate the impact of the COVID-19 pandemic and kick-start the economy.
The loans have a maximum repayment period of 30 years from the date of issuance.
(Aneta Zachová | EURACTIV.cz)
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