New MFF – Five Challenges for the Czech Republic

Size and Flexibility

• The Czech Republic is advised to promote an increase of the European budget. A larger MFF would limit cuts in both Cohesion Policy and Common Agriculture Policy - the two most important EU policies for the Czech Republic.
• The flexibility of the MFF should be increased through three different instruments: the reform of the Special Instruments outside the MFF, mandatory margins in EU programmes, which could be transferred between budget chapters, and a limitation of budget headings.

Resources

• The Czech Republic should consent to increasing its payments to the EU budget.
• The Czech government is advised to consider a transformation of the current VAT revenue scheme. Simultaneously, it should be open to introducing a seigniorage as a new resource for a potential separate Eurozone Budget.

Priorities

• The future MFF should reflect the needs of European citizens so that the European Union is doing what it is expected to do.
• With reference to Czech opinion polls, the Czech government should promote the strengthening of Security and Citizenship, Global Europe, and defence cooperation.

Cohesion Policy

• In case of limiting the funds allocated to the Cohesion Policy, the Czech government should promote a vertical decrease of funding instead of restricting developed regions only.
• The Czech Republic is advised to promote a new categorisation of regions, i.e. to support the introduction of a new scheme that would better differentiate nuances in economic disparities.
• The Czech government should limit the number of priority areas financed by the European Structural & Investment Funds (ESIF) so that the EU aid is more concentrated and provides a more visible effect.

Common Agriculture Policy

• The Czech Republic should refuse to cap direct payments as it would significantly harm farmers due to the structure of the Czech agriculture (large farms).
• Shall the government fail with this request, it might argue for: 1) a redistribution of direct payments within national states; 2) open a debate about co-financing the first pillar.

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