The Czech Republic

1) REFERENCES

Commission Opinion [COM(97) 2009 final - Not published in the Official Journal]Commission Report [COM(98) 708 final - Not published in the Official Journal]Commission Report [COM(1999) 503 final - Not published in the Official Journal]Commission Report [COM(2000) 703 final - Not published in the Official Journal]Commission Report [COM(2001) 700 final - SEC(2001) 1746 final - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1402 final - Not published in the Official Journal]Commission Report [COM(2003) 675 final - SEC(2003) 1200 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its July 1997 Opinion, the European Commission considered that most sectors of Czech industry should experience no major problems integrating into the EU market, provided that the Czech Republic continued its restructuring and modernisation efforts and reinforced them in the case of heavy industries. It also stressed that, in the long term, efforts to improve the productivity and non-price -based competitiveness of Czech industry were required to maintain competitiveness in view of likely rises in wage and production costs.

The November 1998 Report stressed the need for efforts on the privatisation of strategic undertakings and on the process of restructuring, particularly of steel and other heavy industries.

The October 1999 Report indicated that Czech industrial policy had been re-defined since the last Report in order to pursue industrial revitalisation. Good progress had been made with privatisation, though further efforts were required in some sectors, such as steel. Progress had been made with regard to SMEs.

The November 2000 Report indicated that the government had encouraged the restructuring of businesses and accelerated privatisation, particularly through the Economic Revitalisation Agency, except in the steel sector.

The November 2001 Report recorded progress in drawing up the industrial policy and emphasised the slow pace of privatisation and restructuring. Progress was being made in implementing the policy to promote SMEs.

The October 2002 Report detailed the further progress made by the Czech Republic in the field of industrial policy, particularly concerning privatisation and restructuring and its policy on SMEs.

The November 2003 Report considers that Czech legislation on industrial policy and on SMEs essentially complies with Community policy. However, the privatisation and restructuring process has not yet been fully completed in the energy, telecommunications and steel sectors.

The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.

COMMUNITY ACQUIS

EC industrial policy seeks to enhance competitiveness, thus achieving rising living standards and high rates of employment. Its aim is to encourage an environment favourable to initiative, to the development of undertakings throughout the Community and to industrial cooperation, and to foster better exploitation of the industrial potential of innovation, research and technological development policies.

EU industrial policy combines instruments from a number of Community policies, and includes instruments related to the operation of markets (product specification and market access, trade policy, State aid and competition policy) and measures related to industry's capacity to adapt to change (stable macro-economic environment, technology, training etc.).

In order to cope with competitive pressure and market forces within the Union, the industry of applicant countries needs to have achieved a certain level of competitiveness by the time of accession. The applicant countries must show that they are pursuing policies aimed at open and competitive markets along the lines set out in Article 157 (ex-Article 130) of the Treaty on European Union. Cooperation between the EC and the candidate countries in the fields of industry, investment, standardisation and conformity assessment as provided for in the Europe Agreement is also an important indicator of development in the right direction.

EVALUATION

In the area of industrial strategy, the Czech Republic is implementing the Sector Operational Programme for Industry (2001-2006), which aims to strengthen competitiveness and prepare industry for the use of Structural Funds.

The law on investment incentives entered into force in January 2002. Privatisation and restructuring is progressing, but has not yet been fully completed in the energy, telecommunications and steel sectors. It will nonetheless be necessary to check that this is carried out in compliance with State aid rules and to speed up restructuring.

Since the 1997 Opinion, the Czech Republic has made efforts in all areas. This chapter is provisionally closed, no transitional arrangements have been requested and the Czech Republic has met its commitments (see the 2002 Report).

As regards SME policy, the Act on support to SMEs entered into force in January 2003, enabling the Czech Republic to comply with the Community definition of SMEs.

The Czech Republic endorsed the European Charter for Small Enterprises in 2002 and also pressed on with its medium-term strategy for SMEs (2001-2004). Efforts are still required, however, to improve the business environment, strengthen the administrative capacity of the SME Department of the Ministry of Industry and Trade, and to establish an SME "one-stop-shop".

The Czech Republic has made good progress since the 1997 Opinion. This chapter is provisionally closed, no transitional arrangements have been requested and the Czech Republic has met its commitments (see the 2002 Report).

Access to finance needs to be made easier and the legal framework improved.

Since 1998, the Czech Republic has taken part in the third Community programme for SMEs for the period 1997-2000 (1).

See also

(1) Decision of the Association Council between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, of 25 November 1998 adopting the terms and conditions for the participation of the Czech Republic in the Community programme in the field of small and medium-sized enterprises.

Official Journal L 6 of 12.01.1999

Last updated: 03.03.2004