On 26 February, the European Commission published its Country Reports, as part of the European Semester process. The reports point out to some improvements in the EU member states, but the overall tone is rather critical. Although macroeconomic indicators have evolved positively, the economic recovery remains modest and fragile and unemployment, named the main problem, remains too high, at above 10%. The pace of structural reforms in EU economies is too slow, according to the Commission, and they are much needed to tackle long-term problems, such as fiscal deficits and unsustainable levels of debt. The country reports will be the starting point of discussions with member states on their country-specific recommendations.

The Czech Republic report starts rather positively, with the Commission praising good fiscal deficit and debt levels, very good employment numbers, as well as solid economic growth. It also notes that good economic performance has again led to convergence with the EU average in terms of GDP-per-capita – this indicator has stalled after the crisis. Then the report starts being critical. Domestically-owned companies are insufficiently integrated in global value chains, R&D is weak and poses threats to transition to innovation-driven economy. Although some country-specific recommendations from 2015 were tackled – there has been progress in battling tax fraud, corruption and healthcare effectiveness, problems such as unequal access to education and unattractiveness of teacher professions remain. The main findings of the report, with regard to the next country-specific recommendations, concern: tax evasion, long-term sustainability of public finances, participation in the labor market of under-represented groups (women with small children, low-skilled workers, Roma community), inequalities in access to education, inefficiencies in the business environment and weaknesses of public administration (including e-government), public procurement, investment, R&D, transport infrastructure and energy efficiency.

For more, click here. The Czech Republic report can be accessed here.