9. května 2016
Ladies and Gentlemen, I am very pleased to be here at the FEPS Seminar and have the opportunity to speak to you about the Czech Republic and its relationship with the EU, especially at this time when just a few days ago, at the beginning of May, we marked the 12th anniversary of our membership of the EU.
For the Czech Republic, becoming a member of the EU meant a completion of the journey started after the fall of the communism when, under the political leadership of the first Czech President Vaclav Havel, the return to the family of free, democratic, stable and prosperous European countries was of paramount importance. The prospect of integration into the Euro-Atlantic structures (both the EU and NATO) was considered as a safeguard of successful political and economic transformation and as a beacon of stability, security and prosperity in the tumultuous times of transition.
And that holds true even today, twelve years after we joined the EU. Let me explain why I believe so.
To start with, the economic benefits of the membership are simple undeniable. According to our estimates, during our first ten years in the EU, the Czech economy grew by 1,1 percentage point faster than it would have if we had stayed out of the EU, cumulatively gaining more than 3 trillion CZK. It is needless to say that the higher economic growth translated into lower unemployment. Furthermore, the Czech Republic is dependent on its exports and as much as 80 % of them are directed into the EU, proving that our economy profits enormously from the existence of the single European market. From the economic perspective it is quite easy to understand that there is simply no alternative to our membership of the EU.
But, of course, it is not only about the economy. Being part of the EU is essential also strategically and politically. Let me elaborate on that in a bit more detail. Over the course of its existence, the EU has evolved into a unique organism. After more than sixty years of integration efforts, it has achieved unprecedented success in the form of long-term peaceful cooperation among 28 different and independent Member States, which is based on common values of mutual solidarity and respect. This cooperation is underscored by a functioning institutional arrangement, and some of the states even have a common currency. Basic liberties enable freedom of movement, commerce, settlement and employment on a scale that is unprecedented in history. Thanks to the close cooperation among its member states, the European Union has become a key player on the world stage, promoting stability and peace in the world. It also acts as a guarantor of the basic values on which our society is based.
For all these reasons, I am fully convinced that the Czech membership of the EU is of strategic importance and that the EU is for us the natural and favourable environment offering the best possible framework and conditions under which we must strive to further promote the development of our country.
And that leads me to my next remark. The EU should not and must not be seen as a sort of exogenous set of rules and regulations imposed on us from Brussels, or as a compound of lifeless institutions full of bureaucratic machines aimed at taking away our sovereignty and freedom. Unfortunately, this sort of Eurosceptic or sometimes rather Euroignorant (i.e. Europe is not what matters) mindset was typical of some of the representatives of former governments, and event head of state. It was precisely this way thinking that had done quite a lot of damage, both in terms of our chances to use the potential of the memberships to the fullest possible extent and in terms of affecting the general public by cementing the negative image of the EU in the eyes of ordinary citizens. In the end, it was detrimental also in terms of our reputation – our negotiating potential was limited by the very limited allies that were willing to coalise with us.
Against this backdrop, the current Government faced quite a daunting challenge upon taking office to change precisely that Eurosceptic mindset and the perception of being regarded as a trouble-maker.
How to achieve that? The current Government has undertaken to break with the legacy of isolationism, constant refusals and short-sighted goals pursued by the some of the former governments. Instead, in its Policy Statement, it declared to „actively strive for a European Union which is politically influential and capable, economically competitive, a defender of democratic values and promoter of social cohesion and human dignity. The aim of our European policy is focus on the core of the European integration and operate in the European area as a comprehensible and credible partner“.
Furthermore, in the spirit of this new approach, the current Government has adopted a new strategic paper setting out its principles and priorities regarding the EU – the Czech Strategy in the EU: An Active and Intelligible Czech Republic in a United Europe. In this strategy, the Government reiterates that it views the Czech membership of the EU first and foremost as a political project, a strategic choice and a fundamental economic, social, cultural and security framework for further development of the Czech Republic, while it also serves as an ideological anchor. The Government believes that being a full-fledged member of the EU is in the strategic interests of the Czech Republic.
Now, let me briefly turn to the main priorities that the Czech Government has set in relation to the EU.
The Strategy includes five priorities:
• Operational Common Security and Defence Policy
In view of the increasing responsibility of Europe for its own protection and security and a major deterioration of the situation in the immediate surroundings of the EU, the Government considers an operational Common Security and Defence Policy („CSDP“) to be a priority, and we actively participate in High Representative Mogherini's exercise and hope that the European Global Strategy will be a well-targeted document tackling the security challenges we face. The Government shall support greater cooperation between civil and military instruments, better linking of CSDP activities with other EU tools and activities, a general increase in CSDP operability as well as strengthening other civil capabilities of the EU.
• Deepening the Single Market
Removing barriers within the internal market in goods and services and a deeper internal market in the fields of the digital agenda and energy is a long-term priority of the Czech Republic within the EU. The Government insists on preservation and indivisibility of all four EU freedoms, in particular the freedom of movement of persons that is considered one the greatest benefits of the EU membership. We are therefore bit puzzled by proposals to revise the regime for posting of workers. The Commission proposal is not based on impact assessment and risks creating yet further barriers on the internal market.
Another prerequisite crucial to the internal market's development is strong support for research and innovation having regard to the need for more coherent collaboration between the research and business sectors. R&D results must be oriented towards market needs – all of this relating to the aim of creating a framework for free movement of knowledge across the EU.
• Effective Use of Structural and Investment Funds
EU policy on economic, social and territorial cohesion aims at improving the quality of Czech citizens' lives i.e. through modernization of the country's economy and strengthening its industrial base, and as such it is regarded as a key investment tool of the Government. Therefore, the Government shall seek to ensure an adequate level of resources be allocated to this policy within the EU budget into the future. For its part, the Government shall ensure that the Structural and Investment Funds are put to timely and proper use. Conformity of Czech and EU legislation, consistent setting of long-term priorities, high-quality staffing, simplification and harmonization of rules for EU funds at the national level and an integrated approach to the use of funds and preparation of high-quality projects will play a key role in the effective utilization of these resources.
• Common Action against Tax Evasion
Tax evasion and fraud limit the ability of Member States to fulfil their basic role. At the same time, they are in conflict with social justice and harmful to competition. Therefore, the EU should be looking for a collective solution to this problem. The Government shall seek to make tax havens as transparent and open as possible and shall, generally, pursue their overall global restriction. The EU internal market should be based on the quality of the business environment, innovation and efficiency rather than on unfair tax competition which depletes public budgets. The Czech Republic shall promote the introduction of the reverse charge mechanism as the most effective instrument for tackling VAT fraud in the EU. In respect of direct taxation, the Government shall support initiatives against tax evasion and aggressive tax planning and is also ready to continue in discussions on the possible harmonization of rules for calculating the corporation tax base.
• Preparation for Accession to the Eurozone
The Government is well aware of the strong economic links between the Czech Republic and the Eurozone, the benefits of introducing the Euro in terms of deeper trade relations, transaction costs savings, price transparency and monetary stability; and the opportunity to influence the inner workings of Eurozone institutions, whose decisions already have an impact on the Czech Republic today. The Czech Republic is compliant with the Maastricht criteria with the exception of membership of the European Exchange Rate Mechanism (ERM II), which is a strictly political decision. The Government shall lead a comprehensive public debate on the effects of accession to the Eurozone in order to prepare the ground for a political decision to join ERM II before 2020 as well as the subsequent decision on the Czech Republic's accession to the Eurozone.
Let me make one more remark concerning our priorities. In order to be successful and achieve our priorities, we need to put a high emphasis on the development of good relations with our partners in the EU and on seeking like-minded allies. In this respect, the Czech Republic has been building on the continued cooperation with our neighbours within the V4, i.e. with Slovakia, Poland and Hungary, on a number of sectoral issues, and I am glad to be able to say that the V4 has become a recognized voice in the arena of European politics.
Apart from the V4 cooperation, I believe it is necessary to underscore our intense ties to another country – Germany. In recent years, the relationship between the Czech Republic and Germany has been repeatedly described as the best it has ever been in history, and thanks to intensive contacts, active communication and searches for joint topics, our relations have continued to improve. However, we must not relent, and we must carefully protect and care for our cooperation. That was also, among other things, the message that PM Sobotka delivered during his speech at the Humboldt University in Berlin almost exactly a year ago.
His plea for a renewed impetus to Czech –German relations resulted in signing the Joint Declaration on the Czech – German Strategic Dialogue including the Working Programme of the cooperation among particular ministries. The Joint Declaration on the Czech – German Strategic Dialogue follows the Treaty between the Czechoslovak Federative Republic and the Federal Republic of Germany on the good neighbourhood and friendly cooperation of 1992 and the Czech – German Declaration on the mutual relations and their future development of 1997. Apart from concrete bilateral cooperation, it puts emphasis on a shared Czech – German responsibility for the future of the EU. The bilateral cooperation shall be enhanced in 9 areas, e.g. Foreign and European policy, Science and Research, Energy, Climate and Environmental Protection.
The Joint Declaration, therefore, has the potential to grow into a valuable platform for mutual cooperation on matters related not only to mutual bilateral issues, but also on EU-related issues, and helps prove those who claim that Czech –German relations are fraught to be quite wrong.
