PM: Veto threat secured higher EU funding for ČR

Brussels, Feb 8 (CTK) - The threat that the Czech Republic might block the negotiations on the EU's 2014-20 long-time budget helped Prague raise the sum it will be able to draw from European funds during the period to more than 20.5 billion euros, Prime Minister Petr Necas told Czech journalists Friday.

He was speaking after more than 24 hours of negotiations that continued throughout last night until early tonight.

The Czech Republic will draw the above money within the EU cohesion policy through which billions of euros are sent mainly in aid of poorer regions.

"The negotiations were very complicated and I do not deny that they were also very demanding," Necas said.

The EU leaders eventually agreed on spending at 957 billion euros, a decrease of around 3 percent on the last budget.

"A cut has been made...It is a really austerity financial framework," Necas said.

The amount the Czech Republic will get from EU funds will palpably decrease compared with 2007-13 when the country had some 26.7 billion euros available.

This was, however, expected given the budget cuts and the Czech Republic growing richer within the EU.

Necas said the sum for the Czech Republic per capita will be the fourth highest in the EU.

In the ending period the Czech Republic holds first position.

Before the summit, Necas said the proposed volume of money for the Czech Republic in the EU funds is too small and threatened with a veto of the negotiations.

Eventually, the sum was raised by 900 million euros in 2011 prices.

"The veto was meaningful," Necas said.

If the Czech Republic were not serious about the threat to block the negotiations, it would not have attained an increase in the sum, Necas said.

The Czech Republic will also gain further money from the common agricultural policy fund, from which 5.4 billion euros are to be provided for Czech farmers' direct payments in 2011 standing prices and another 1.9 billion euros in support of the countryside.

The setting of caps on additional subsidies to large farms will be on a voluntary level for which the Czech Republic was also striving.

Necas conceded, however, that the Czech Republic has had problems with money drawing in the current financial framework, particularly with the effectiveness of its use and its transparent drawing.

Necas said he believes that the Czech Republic will take a lesson from these mistakes in the next period and that it will, for instance, largely simplify the structure of particular programmes and lower the number of individual operational programmes.

Necas said it is important from the Czech point of view that it was eventually agreed on that VAT will be recognisable, which will be a big relief for the Czech budget.

This means that not only the prices of projects, but also VAT will be covered from the EU funds. This change will bring the Czech Republic a revenue of 2.8 billion euros.

Next Finance analyst Marketa Sichtarova said the Czech Republic can paradoxically be satisfied with the allocation of a smaller amount of money.

She said EU funds do not help boost the Czech Republic's economic growth, but on the contrary, they further slow it down because they place higher demands on public finances.

Money drawing from the cohesion funds raises the country's debt because the state must add its own money to the drawn means, Sichtarova said.