The state has been criticized for failing during the first round, which ran from 2004 to 2006, to create a straightforward system for applying for the funds, which are designed to strengthen the economies of new EU member states. The stakes are higher for the second round of funding — the country will receive three to four times more money.

Officials predict the sum will reach 34.9 billion euros ($40.8 billion/1 trillion Kč), including national co-financing, money that recipient countries are required to contribute from their own state funds as a percentage of whatever they receive. The EU co-financing regulations, which encourage countries to distribute money responsibly, are designed to prevent misuse.

The government has received 2.6 billion euros in Structural Funds to distribute during the first period. Applicants, which range from small businesses to scientific institutions doing research and development, have complained the funding is too difficult to obtain. There is also talk that the government might end up having to refund some of the undistributed money.

Some government officials have acknowledged that the first round of funding was not a smashing success. Rhetoric is strong for making the next round more effective.

"The next period is the last chance to strengthen the Czech economy with EU money," Deputy Prime Minister for the Economy Martin Jahn said at a Nov. 15 conference held to evaluate fund distribution and discuss future challenges. Rather than benefiting from the EU budget, said Jahn, "if the Czech economy keeps developing at the pace it is now, shortly after 2013 we will only be contributing to the EU budget."

Jahn, who in mid-October announced his decision to leave the Cabinet, said the government will have a tough time finding the money in the state budget to provide co-financing for the funds. He added that the business sector would be well advised to keep an eye on the government to make sure it distributes the funds correctly.

Finding co-financing

Ministries responsible for distributing the funds, including the Regional Development, Industry and Trade and Environment ministries, are preparing to grapple with the challenge of providing co-financing.

It looks formidable, in part because ministries will not receive additional money from the government to pay for co-financing. They'll have to find the resources within their regular budgets.

The Industry and Trade Ministry, for example, is working on merging its national programs aimed at supporting small and midsize enterprises and research and development with Structural Funds' programs. The measure would allow the ministry to direct all national support to allocating Structural Funds.

"Our strategy is to merge national programs with Structural Funds' programs so that they do not overlap," said Martin Tlapa, deputy industry and trade minister.

Tlapa said the ministry will restructure its budget and make it clear to some officials that they should reprioritize their budgets to maximize EU matching funds in the next round.

Jahn has also pointed out that the state must create the administrative power necessary to effectively distribute the money. "It is necessary to make sure that ministries allocate enough people to handle the task," he said.