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Government approves COVID III guarantee programme for companies and releases 2.5 billion for Care-giver’s Allowance for SEP programme

Office of the Government, 18.05.2020

Companies with up to 500 employees affected by the coronavirus contagion will be able to ask banks for a loan with a state guarantee. The government of Andrej Babiš approved the announcement of the COVID III guarantee programme at their meeting on Monday 18 May 2020. It also agreed with the designation of 2.5 billion crowns for the support of self-employed persons (SEP) that have to take care of children during the pandemic and with the draft of an act that enables healthcare service providers to be compensated for expenses that arose for them in connection with the ongoing epidemic of the COVID-19 disease.

The COVID III guarantee programme follows the previously announced COVID I, COVID II and COVID Prague programmes, but unlike them will have countrywide scope and will support businesses with up to 500 employees. According to the approved act on the provisioning of a state guarantee by the Czech Republic for securing the debts of the Czech-Moravian Guarantee and Development Bank, the allocation of the programme in connection with alleviating the negative impact caused by the SARS-CoV-2 virus is CZK 150 billion, which allows the support of loans in a volume of up to CZK 500 billion.

The government approved the proposal by the Ministry of Industry and Trade that the state support (portfolio guarantee) will apply for operating loans of up to CZK 50 million that will be provided until 31 December 2020. Business with up to 250 employees will be able to ask for an operating loan up to the amount of 90% of the principle of the guaranteed loan, though at most CZK 45 million. Business with up to 500 employees will be able to get a loan up to the amount of 80% of the principle of the guaranteed loan, though at most CZK 40 million. The length of the guarantee in both cases will be at most three years. You can find further information in the press release of the Ministry of Industry and Trade (in Czech language).

The government also approved the further support of innovative companies that have focussed on new projects for the production of protective equipment in the Czech Republic and other new technologies in the fight against the COVID-19 disease. The Ministry of Industry and Trade has already supported these projects through the Czech Rise Up - Smart Measures against COVID-19 subsidy programme, thanks to which it managed to implement seventeen successful projects for more than CZK 550 million.

The government has already approved its continuation, the Czech Rise Up 2.0 subsidy programme, which will contain two challenges. The first is already closely focused on the final phase of the completion of research and development, e.g. the certification and protection of the rights of a medical solution in accordance with the approved notification of the European Commission. The second will be oriented on the continuation of support in the de minimis form for a narrowly-defined group of projects that will focus on the use of existing technologies for the creation of medical and non-medical solutions, the goal of which is to manage the economic and social consequences of the crisis, the preparation for an eventual second wave of the pandemic and the support of strategic technologies over the medium-term horizon. The ministry is planning on earmarking up to CZK 300 million for this programme. More in the press release of the Ministry of Industry and Trade (in Czech language).

The government also approved the release of up to CZK 2.5 billion from the government budget reserve for the Ministry of Industry and Trade to finance the Care-giver’s Allowance for SEP subsidy programme. The objective of this form of state support is to support those self-employed persons, including persons doing business in the areas of primary agricultural and forestry production, who had to interrupt their business to take care of a school-age child up to 13 years of age or a person up to 26 years of age dependant on outside help in level I in the period when the schools and social services were closed due to a government decision. These small-scale entrepreneurs can ask for a subsidy in the amount of CZK 500 per day.

The government approved the release of a further CZK 5 billion from the government budget reserve for the financing of the COVID - RENT programme to support entrepreneurs affects by the global spread of the COVID-19 disease caused by the SARS-CoV-2 virus and acknowledged its announcement and parameters. The programme should provide support to businesses operating a retail business activity or providing services to customers in business premises on the basis of a lease or sublease agreement if they were subject to a ban on the sale of goods or services in their business premises as a result of the approved extraordinary measures, thereby decreasing their ability to create a profit and pay their rent. Such affected businesses will be able to request support amounting up to CZK 10 million. A condition is that the landlord lowers the price of the rent by 30 per cent for April to June and the operator itself pays 20 percent of the rent. More in the press release of the Ministry of Industry and Trade (in Czech language).

The ministers also approved the draft of an act for the compensation of entities providing paid healthcare services taking into account the effects of the epidemic of the COVID-19 disease in 2020. The goal of the proposal is to specify a legal framework for the compensation of expenses that arose for health service providers in connection with the ongoing epidemic of the COVID-19 disease. The act should impose the obligation on health insurance companies to compensate these expenses and to authorise the Ministry of Health to issue decrees meant for the calculation of this compensation in the event that the relevant providers of healthcare and social services did not come to an agreement with the health insurance companies themselves. Extraordinary expenses for the consequences of the epidemic are not included in the payment decree for this year, because it was prepared and agreed upon before the epidemic broke out. The Ministry of Health estimated the expenses of healthcare facilities connected with the coronavirus at roughly CZK 5 billion and their non-payment would place the healthcare facilities into great financial difficulties. The Ministry of Health press release (in Czech language) contains more details

The cabinet also approved the draft of an act on some measures for alleviating the effects of the epidemic of the coronavirus designated as SARS-CoV-2 in the area of demonstrating the fulfilment of the qualifications for the purpose of employment relations. If Parliament approves the act, it will be possible to only formally fulfil the requirements of the legal regulations and technical standards for the performance of the negotiated types of work for a half year after the end of the state of emergency. This particularly applies to the fulfilment of qualifications of employees and the extended validity of existing documents. The reason is that, due to the approved extraordinary measures with regard to the epidemic, it is not objectively possible to ensure the examination of the qualifications and periodic training of dozens of professions.

The government also noted the new extraordinary measures of the Ministry of Health for managing the COVID-19 epidemic. Some of these are extensions of existing measures that had to be extended by the ministry by its own measures after the end of the state of emergency. Now, however, a further easing in the wearing of masks will be valid effective from Tuesday 19 May, when office employees will no longer have to use them if they sit at least two metres from one another. Workers in facilities with a high heat load also do not have to use them. The football match between Teplice and Liberec on Saturday 23 May also got an exception from the valid restrictions on movement, where there can be up to 150 people in the stadium and the players and officials can use the change rooms and showers.

The ministers also learned about the rules that should apply from 25 May, when the last large wave of the relaxation of the extraordinary measures is planned. From next Monday, for example, up to 300 people should be able to attend mass events, restaurant interiors will also be opening, though only until 11 p.m., the operation of hotels will be renewed, it will be possible to go on tours of castles and châteaus and tattoo parlours will also be able to open. This all must be under the fulfilment of strict hygienic measures specified by the Ministry of Health. It will once again be possible, with restrictions, to visit patients in healthcare facilities and social service facilities and students of the first years of elementary school will be able to return to school voluntarily. You can find an overview of the extraordinary measures of the Ministry of Health in the press release (in Czech language).

The government also discussed the Smart Quarantine project. The Minister of Health was told to assume the responsibility for the project and to submit the solution to the Smart Quarantine 2.0 project to the government by 25 May. The central COVID-19 management team will be implemented into the Ministry of Health’s organisational structure. The Minister of Health should also submit a proposal for the staffing of Smart Quarantine in the organisational structure of the Ministry of Health and the regional hygienic stations, including a proposal for increasing the number of relevant systematic sites and budget requests for its financing and to ensure the technical and IT solutions for Smart Quarantine 2.0 through the state enterprise NAKIT. The 1st Deputy Prime Minister and the Minister of the Interior also received the task of proposing the contractual, technical and IT solutions for Smart Quarantine 2.0 by the same date.

The Government also decided to replenish the state stockpile of personal protective equipment and medical supplies, while the Administration of State Material Reserves will release funds of up to CZK 1.243 billion from the government budget reserve and the Ministry of Health’s unconsumed capital expenses, which were assigned to expenses related to the COVID-19 epidemic. The Ministry of the Interior will also hand over to the Administration of State Material Reserves the stock of personal protective equipment and medical supplies that it purchased at its own expense from the applicable funds. More in the press release of the Ministry of Industry and Trade (in Czech language).

Autor: Office of the Government