We know how to secure and utilise billions from the EU. However, they do not always deliver the expected results.
PRESS RELEASE ON THE EU REPORT 2026 – Report on the Financial Management of EU Funds in the Czech Republic – 2 November 2026
The Czech Republic is set to receive more than CZK 1.3 trillion from European funds between 2021 and 2027. These resources should be used economically, efficiently and only where their use makes sense. It is not simply a matter of spending the money. However, the SAO’s audit findings have long shown that Czech entities have learnt to draw down funding in a formally correct manner but often direct it to areas where it is not needed, or to projects that lose their relevance over time.
" At a time of record budget deficits, the state simply cannot afford to pour billions of crowns into playgrounds, pavements that lead nowhere, or the drafting of stacks of methodological guidelines that nobody uses. None of this will boost the overall performance of the Czech economy. In many economic debates, the term 'subsidy' has become synonymous with waste, a lack of targeting, and the squandering of potential. Merely spending money is not a success. Success lies in directing funds where they will contribute most significantly to the growth of society as a whole," says Miloslav Kala, SAO President.
The ‘EU Report 2026’, published today – the SAO’s nineteenth report on the financial management of European Union Funds in the Czech Republic – highlights the need for a fundamental change in approach. Among other things, the report summarises the findings of 14 audits that focused wholly or partly on EU funds and were completed between 1 April 2025 and 31 March 2026.
Less money, greater emphasis on results
In the next programming period, i.e. from 2028 to 2034, the Czech Republic is likely to manage a lower volume of European funds than before. This makes the conditions for their use even more important. According to the SAO, it is necessary to focus support on a significantly smaller number of strategic areas, reduce the fragmentation of subsidy programmes, simplify administration and, above all, evaluate the actual benefits of the supported projects.
The European Union is also advocating the same change in approach. From 2028, the EU plans to switch to a conditional disbursement model, under which the payment of European funds will be linked to the achievement of specific objectives, milestones and reforms. Simply full utilization of the allocated funds will no longer be considered a success.
Return to market principles
The SAO considers it crucial to reintroduce standard market principles and incentives into the subsidy environment. "It is necessary to increase the co-financing by subsidy recipients, in other words, the share they pay out of their own pockets. The only ones truly capable of ensuring the efficiency and cost-effectiveness of how European funds are used are the recipients themselves—provided, of course, that they are required to make a significant financial contribution to the investment and bear the associated risks," states Miloslav Kala.
The SAO also recommends significantly expanding the use of financial instruments such as loans and guarantees. The Czech Republic lags far behind the EU average in their use. While in the Czech Republic these financial instruments represent less than 2.5% of funding from EU funds, the EU average stands at approximately 9%.
Another positive step could be the new Act on the Management and Control of Public Finances, effective from January 2027, which emphasises accountability for results, risk management and adherence to the principles of effectiveness, economy, and efficiency.
Billions spent, dismal results
The SAO audits conducted in recent years have revealed several cases in which European funding did not deliver the expected results. A few examples from this year’s EU Report:
- Clean mobility: Despite investments of CZK 5.3 billion, the Czech Republic ranks among the weakest EU countries in terms of the expansion of electromobility; among other shortcomings, it failed to meet some of its targets regarding charging infrastructure.
- Energy Savings and Renewable Energy Sources: Support amounting to CZK 26.4 billion had only a negligible impact on overall energy consumption in industry and services, amounting to 1.1%. The other programmes also failed to deliver the expected results.
- Hospital preparedness for emergency situations: Support totalling CZK 18.6 billion – instead of systemic changes that would have advanced the Czech healthcare system’s capacity to manage emergencies, unnecessary equipment was often purchased merely for stockpiling purposes.
- Shifting freight transport from road to rail and waterways: Despite financial support totalling CZK 650 million, the volume of intermodal transport is declining, while road transport is on the rise.
- Digital education: A total of CZK 8.2 billion failed to achieve any of the programme’s priority objectives.
- Employment of disadvantaged groups: Projects amounting to CZK 1.2 billion generated predominantly short-term effects without any proven long-term impact.
"Unless private capital and the proverbial invisible hand of the market play a much greater role again, even the most ingenious changes to the subsidy-drawing rules will have no chance of bringing this runaway train back on track," concludes Miloslav Kala, SAO President.
Communication Department
Supreme Audit Office