April 13. 2024. 5:42

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Czechia opposes European Sovereignty Fund

The Czech Republic opposes the European Commission’s plan to create a new European Sovereignty Fund as part of the EU’s response to the US Inflation Reduction Act.

The European Commission wants to support investments in strategic areas, especially clean technologies, through the new fund. Financing and the specific shape of the planned instrument are under discussion, but the initial position of the Czech state and local businesses is dissenting.

“We do not want to split support between different instruments. We see the negative aspects regarding funding,” said Martin Hronza from the Czech Industry and Trade Ministry during a debate organised by Czech Business Representation to the EU.

“The fund should not be used to overpay investors, who should choose whether they get a higher subsidy here or in the US,” Hronza added.

According to Hronza, there are still too many questions about the fund. For example, it is unclear whether the fund will target the right target or whether the support will be symmetric, the Czech official said.

The Czech Republic also lacks a macroeconomic impact analysis of the current situation that would consider inflation and country debt. According to the country, an investigation is needed to create the best solution.

The idea of a new fund does not please the Confederation of Industry and Transport either.

“In our view, it would not be a good idea to set up new instruments, such as the Sovereignty Fund, before optimising existing financial instruments. Only then can we talk about something else,” the director general of the Czech Confederation of Industry Dagmar Kuchtová said.

According to Kuchtová, European businesses do not need additional funds but rather simplified regulations.

“Europe is generally perceived as an over-regulated market,” she said, adding that “the problem lies in these regulations”.

According to her, some EU legislative proposals, like the Due Diligence Act that obliges companies to secure responsible and sustainable corporate behaviour throughout global value chains, should be swept from the table.

(Ondřej Plevák, Aneta Zachová | EURACTIV.cz)