European Commission approves €1.9 billion Czech scheme to support companies in context of coronavirus outbreak

The European Commission has approved an approximately € 1.9 billion (CZK 50 billion) Czech scheme to support companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Many EU companies have seen their revenues and activities significantly decline because of the restrictive measures put in place to limit the spread of the coronavirus. This €1.9 billion Czech scheme will ensure liquidity support to companies affected by the coronavirus outbreak. We continue working in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Czech support measure

Czechia notified to the Commission an approximately €1.9 billion (CZK 50 billion) scheme, addressed to companies of all sizes and active in all sectors, except the financial sector.

Under the scheme, the aid will take the form of direct grants, guarantees or loans to compensate beneficiaries for the expenditures incurred in the period February 2020 to December 2021. Eligible companies are those that experienced a minimum decline in turnover in the range of 25% to 50% during the relevant period, if compared to the same period before the coronavirus outbreak. In the particular case of companies active in the cultural sector, the eligible ones are those that have been prevented or restricted from providing cultural services to the public because of the measures put in place by the government to limit the spread of the virus.

The aim of the scheme is to provide the beneficiaries with sufficient liquidity to continue their activities during and after the coronavirus outbreak.

The Commission found that the Czech measure is in line with the conditions set out in the Temporary Framework. In particular, (i) the aid will not exceed €225 000 per undertaking active in the primary production of agricultural products, €270 000 per undertaking active in the fishery and aquaculture sector and €1.8 million per undertaking for undertakings active in all other sectors; (ii) the aid will be granted before 31 December 2021; and (iii) in case of guarantees and loans granted through financial intermediaries, safeguards will be put in place to ensure that the advantage is passed onto final beneficiaries,.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules.


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