Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure CZ-2020-14/255 – Updated – measures in Czechia
, applies regionally
|Time period||Temporary, 02 April 2020 – 03 April 2020|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Soňa Veverková (Research Institute for Labour and Social Affairs) and Eurofound|
|Measure added||03 April 2020 (updated 28 May 2022)|
After the termination of COVID I interest-free state loan programme, the Czech government introduced the COVID II state guarantee programme for SMEs which are at risk of bankruptcy due to the measures in connection with the spread of COVID-19.
Loans for SME´s were provided by commercial banks while the state run Czech-Moravian Guarantee and Development Bank (Českomoravská záruční a rozvojová banka, ČMZRB secured the loans and offered financial aid for loan interest.
The call was opened 2 April 2020 and ended 3 April 2020, later replaced by COVID III state guarantee programme. The total amount for COVID II programme was CZK 4,000,000,000 (€145,190,563).
The measure run under the Operational Programme Enterprise and Innovation for Competitiveness (Operační program Podnikání a inovace pro konkurenceschopnost, OPPIK .
The loan was aimed at SMEs with trade permission in Czech Republic (except of Prague region) who were forced due to approved anti-COVID-19 measures to shut down or limit their businesses. Business activity of the SME had to be included at the supported economic activities list, which was, however, very wide and included accommodation, logistics, manufacturing industry etc.
ČMZRB secured the commercial loan up to 80% with the maximum period of 3 years. SME could also apply for financial support on the loan interest up to CZK 1,000,000 (€36,298 approx.). Loan to be secured were limited to CZK 15,000,000 (€544,465). The loans were intended to cover salaries, rent, utility costs and supplier-customer invoices.
The program was financed from the EU Structural Funds within the OPPIK and was therefore not intended for the implementation of projects in the capital city of Prague. Financial support for projects implemented in Prague can be applied for in the COVID Prague guarantee program.
According to Czech National Bank , as of 15 December 2020, 3,141 applications were supported from the COVID II programme in the total amount of CZK 14,076,000,000 (€539,620,472 approx.).
There has been a lot of criticism of COVID I and COVID II measures. The Chamber of Commerce of the Czech Republic (Hospodářská komora České republiky) conducted a survey among its members in April 2020, who highlighted the tangle of bureaucracy and lack of clarity in the COVID I and COVID II. 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.
In February 2022, the Ministry of Regional Development of the Czech Republic published an evaluation Analysis of the ESIF measures responding to the COVID-19 pandemic and evaluation of the ESFI. This analysis evaluates some of the COVID-19 antiepidemic measures, namely COVID I interest-free state loan, COVID II state guarantee programme, COVID III state guarantee programme, COVID Prague and Technology-COVID call within OPPIK.
This evaluation shows that the positive impact of the above mentioned antiepidemic measures cannot be yet statistically confirmed. The moratorium on debts and mortgages declared in the first phase of the COVID-19 pandemic played a major role regarding the survival rate. However, in combination with the above mentioned measures, it has likely only delayed the insolvency of a number of beneficiaries. In general, no statistically significant difference in the trends of employment rates was observed when comparing supported and unsupported enterprises.
Evaluation study also have proven that the support was not strongly focused on the economic sectors that were most affected by the pandemic (tourism, HORECA, accommodation services). In general, above mentioned measures applied were appropriate, however, should have been more targeted on most affected sectors and regions.
|Does not apply to workers||
||Does not apply to citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Consultation through tripartite or bipartite social dialogue bodies||Consultation through tripartite or bipartite social dialogue bodies|
Social partners' role in the implementation, monitoring and assessment phase:
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 the policy measure.
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.
Eurofound (2020), COVID II state guarantee programme, measure CZ-2020-14/255 (measures in Czechia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CZ-2020-14_255.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.