Czechs take alarm that cohesion funds could be chopped in re-shaped EU

It’s been confirmed that Brexit talks will finally begin on June 19. But the flipside of those talks are moves within the remainder of the EU-27 to reshape their own cooperation and structures. And there are major fears in the Czech Republic that much of that effort will focus on the Euro zone countries and that key funds for the rest – such as the Cohesion Funds – could be scrapped.

Karla Šlechtová, photo: Filip JandourekKarla Šlechtová, photo: Filip Jandourek Czech Minister for Regional Development Karla Šlechtová sounded the alarm on Thursday when she warned that EU Cohesion Funds could be scrapped after 2020. Šlechtová said that signals suggest big Western countries are not keen paying into the fund aimed at mainly helping Central European countries catch up with them.

Britain’s exit means the disappearance of one major net contributor to the EU budget. And the biggest EU countries using the single currency euro are also now looking at the possibility of creating their own sort of cohesion fund that would help iron out the major disparities between the fast growing wealthy regions, such as Bavaria, Flanders, and Luxembourg, and the likes of the rust belt former industrial and depopulated rural regions across the Continent.

Minister Šlechtová is not the only one this week highlighting moves to reshape the euro zone, already accounting for around 85 percent of the whole EU economy, which might increasingly leave other EU countries trailing behind.

It was also a topic at the three day Prague European Summit. Czech economist Martin Špolc works for the European Commission and spoke in Prague about some of the possible changes put forward such as a separate Euro zone budget.

"One of the ideas that we have put forward is how to better connect the national reforms and structural reforms of individual member states in the euro zone with the EU budget and promote EU investments on priority policies where there is a consensus they have to be done. There would be a possibility that if Eurozone countries agree on a strategic investment or infrastructure project, let’s say, that part of the EU budget would be used for that and explicitly supporting that. Whether non euro zone countries outside of this scheme, whether they would be excluded, again that’s another question. But there are ambitious proposals.ʺ

Photo: Alexas_Fotos, CC0 Public DomainPhoto: Alexas_Fotos, CC0 Public Domain Aleš Chmelař is a chief economist at the Czech Government Office and underlined that some of those ambitious proposals are a matter of concern.

ʺI think that in this process the number one priority is almost to keep the integrity of the EU-27. What we see is a very dangerous, let’s say, dynamic in which some countries in order to solve the costs or find the resources of cyclical euro zone problems, which are of course important. And they are trying to find them in other areas, especially of the European budget where polices such as the Cohesion Policy are extremely important to maintain the integrity of the internal market.

At the moment Czechs are getting around EU 2.7 euros for every euro they are putting in.