Factsheet for case 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|
|Case created||03 April 2020 (updated 06 January 2021)|
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 (Česká národní banka, ČNB)], as of 15 December 2020, 3,115 applications were supported from the COVID II programme in the total amount of CZK 14,052,000,000 (€520,444,444 approx.).
No evaluation or information on effectiveness is available by now, however, 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.
|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, case CZ-2020-14/255 (measures in Czechia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.