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EDITIONS
EU Enlargement Friday, 19 June, 1998, 09:32 GMT 10:32 UK
Czech Republic: country report
Czech Republic and its neighbours
The European Commission has recommended that negotiations to join the Union should begin with the Czech Republic, Hungary, Poland, Slovenia, Estonia, and Cyprus.

The Commission's report on the Czech Republic is summarised below.

The country's political institutions function properly and respect the limits on their competences. Legislative elections held in 1992 and 1996 were free and fair. However, since late 1997 a caretaker government has been in place and legislative elections should be held in June 1998. The unexpected change in government has not affected negotiations for EU membership.

Vaclav Havel
Czech President Vaclav Havel
No major problems exist over respect for fundamental rights. However, attention should be paid to slack laws governing freedom of the press and conditions governing any further extension of a law excluding from public service members of the former security services and active members of the communist regime. The operation of a citizenship law particularly affects the minority Roma population.

Economic growth in the Czech Republic has been sustained since 1994. GDP per head is about 55% of the EU average for a population of 10.3 million. Tight fiscal policies are in place, inflation stands at about 9% and unemployment is among the lowest in Europe.

The Czech Republic is a functioning market economy but progress needs to be made in strengthening corporate governance and the financial system. In terms of facing the competitive pressure and market forces within the Union, the Czech Republic should be able to cope. Trade has been successfully reoriented towards the west.

The country has a trained and skilled workforce. Its economy benefits from strong direct foreign investment and relatively good infrastructure. The main challenge will be implementing structural change of enterprises. The banking sector is dominated by a few partly state-owned banks and competition is not strong.

Although significant elements of the Europe Agreement have been adopted on schedule, much legislative work remains to be done and a few serious bilateral problems have arisen. The legislative work that has been done needs to be backed up by implementation.

The Commission recommends the commencement of negotiations for accession with the Czech Republic, believing that a reinforced pre-accession strategy should help better prepare the Czech Republic meet the obligations of EU membership. A progress report will be presented by the Commission no later than the end of 1998.

See also:

28 Nov 97 | World
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