Fragmented European subsidies have not yet led to sustained economic growth in the Czech Republic or increased competitiveness
PRESS RELEASE ON EU Report 2025 – Report on the financial management of European Union funds in the Czech Republic – 13 October 2025
European subsidies in the Czech Republic are scattered across many areas, with support often invested in tens of thousands of small projects that are unnecessary from the perspective of the national economy, do not bring the necessary added value, and do not have the potential to steer the Czech economy towards permanent and sustainable economic growth or increased competitiveness. These projects have not helped to bring the Czech regions up to the EU average either. At the same time, it appears that the global crisis is affecting the Czech Republic more significantly than most other Member States. This points to a misguided long-term direction of EU budget support and economic policy management in general. There has been no investment in new and progressive areas and sectors that would enable us to move towards a modern, innovative economy with high and sustainable growth. This is stated in the 18th report of the Supreme Audit Office (SAO) on the financial management of European Union funds in the Czech Republic, known as the EU Report 2025, published today.
"So far, we have not fully used the potential that European money has brought. But right now, we are in the final stages of preparing the Multiannual Financial Framework for the period after 2027, which sets the rules for using the EU budget for the next seven years. It is clear that it is not possible to maintain the current form and principles of the European subsidy system. Radical changes need to be made. It will be up to the new political representatives to negotiate rules and limits that will allow us to maximise the impact of every euro that comes our way," commented Miloslav Kala, SAO President.
According to him, this will require clearly targeting funds, concentrating support in selected areas of the economy, supporting projects with high potential for long-term growth and high added value, and ensuring that the funds spent have a multiplier effect. At the same time, it will be necessary to radically simplify the rules, continuously monitor the achievement of objectives, and increase the participation of subsidy recipients. The aim should also be to ensure that applicants and beneficiaries of subsidies do not have to use the costly services of external subsidy companies.
"Although it may seem that we are still receiving sufficient funds from Europe, we must bear in mind that there is significantly less money than in previous programming periods and that it will continue to decline noticeably. This makes it all the more important to set a very limited number of priorities and to use these resources efficiently," warned Miloslav Kala.
He pointed out that the EU's debt from market borrowing had increased significantly by the end of 2023, exceeding EUR 458 billion. This increase in debt is mainly attributable to borrowing for the NextGenerationEU instrument (around 60%), which could more than double by 2026. The repayment of principal and interest on NextGenerationEU debt could amount to EUR 25-30 billion per year for the upcoming Multiannual Financial Framework. This is almost 20% of the current EU budget. Repayment of these loans will not end until 2058. NextGenerationEU was primarily intended to revive the economies of Member States after the COVID-19 pandemic and to show the way to a new model of economic growth based on a clean, innovative, and inclusive economy and digital and technological sovereignty. "To what extent these goals have been achieved and whether this corresponds to the price we will pay for them is for you to judge," the SAO President urges readers of the EU report.
This year's EU report consists of two separate parts and includes, among other things, a summary of the results of the SAO's audit activities from 1 April 2024 to 31 March 2025. During this period, the SAO's Board approved a total of 31 audit reports, 19 of which, or 61%, concerned audits of EU budget funds.
What were the main findings of the audits? It was often stated that the financial support did not lead to the fulfilment of the objectives. For example, in its audit of funds earmarked for the system of care for children at risk and its transformation (Audit No 23/11), the SAO found that the number of children in institutional care had not significantly decreased, the care system had not been unified under a single ministry, and the desired changes in care quality standards had not been achieved. In its audit of funds earmarked for the development of combined freight transport (Audit No 23/13), the SAO stated that the support did not contribute to greater use of this type of transport: rail freight transport is stagnating, water freight transport is negligible, while road freight transport is growing. And what about employment support (Audit No 23/21)? Although the projects contribute to a short-term increase in employment – primarily for the duration of the project – no long-term benefit in terms of increasing the employment rate has been identified. The audit of funds for promoting social inclusion (Audit No 23/29) ended similarly: the support did not lead to addressing the deeper causes of social exclusion, only to mitigating some of the consequences.
The second part of the EU report is devoted to the preparation of a new Multiannual Financial Framework for the EU after 2027. In it, the SAO, as an independent institution, presents its main recommendations and draws attention to the significant risks associated with its inappropriate setting.
Communication Department
Supreme Audit Office