Background information

COVID I provided an interest-free state loan for SME´s which business activities were affected by COVID-19. It was prepared by the Ministry of Industry and Trade of the Czech Republic (Ministerstvo průmyslu a obchodu České republiky, MPO ČR ) and the Czech-Moravian Guarantee and Development Bank (Českomoravská záruční a rozvojová banka, ČMZRB , which also managed the measure. Loans should allow businesses to cover their basic operational expenses, acquisition of small tangible or intangible assets, the acquisition and financing of inventories or for other operating expenditures.

Content of measure

The total amount of the programme is CZK 600,000,000 (approx. €21,818,181). The call was opened for applicants 16 March 2020.

COVID I Loan programme provided support in the amount of CZK 500,000 (approx. €18,181) up to CZK 15,000,000 (approx. €545,454) with zero interest rate. Loans were granted up to 90% of eligible expenditure with maturity of 2 years, including the possibility of deferred repayment for up to 12 months. There were also no fees associated with the processing and granting of the loan or its possible early repayment.

Applicants had to provide that their contractual performance had been delayed, suspended or cancelled due to measures taken to prevent the spread of coronavirus infection.

Use of measure

165 companies were supported with the total a amount of CZK 981,000,000 (€36,333,333 approx.) by COVID I.

No evaluation or information on effectiveness are available by now, however, there was a lot of criticism of COVID I and COVID II measures. The Chamber of Commerce of the Czech Republic (Hospodářská komora České republiky, HK ČR ) carried out a survey among its members in April 2020, which highlighted the tangle of bureaucracy and lack of clarity in the COVID I and COVID II programmes. To apply, companies needed to complete complex forms forecasting the next three years, which is an impossibility in the current situation. Also the capacity of Czech-Moravian Guarantee and Development Bank (Českomoravská záruční a rozvojová banka, ČMZRB), when approving the loans, was very low and the process too long.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies	European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

Employers organisations, which are members of the tripartite body (Council of economic and social agreement, Rada hospodářské a sociální dohody, RHSD) were informed and consulted in both formal (requested by institutional settings) and informal ways. They were not involved into the management of policy measures.

Views and reactions

Partially in agreement. Not all suggestions to the proposal of policy measure made by employers´ organisations have been accepted, however, employers' organisations were ready to compromise.

Sources

• 16 March 2020: CMRZB: Text of the call for proposals (ČMRZB: text výzvy) (www.cmzrb.cz)
• 05 April 2020: CMRZB: COVID I Interest-free state loan (ČMRZB: COVID I Bezúročný úvěr) (www.cmzrb.cz)
• 28 May 2020: MPO ČR: List of companies supported by COVID I (MPO ČR: Seznam společností, které obdržely podporu v programech COVID I a COVID II) (www.mpo.cz)
• 19 June 2020: Chamber of Commerce: Survey among Prague entrepreneurs on COVID-19 measures (HK ČR: šetření mezi pražskými podnikateli ohledně vládních opatření proti COVID-19) (www.komora.cz)
• 21 June 2020: CMRZB: Number of applications finalized/in process (ČMRZB: počet schválených a vyřizovaných žádostí) (www.cmzrb.cz)