State aid: Commission approves €18.5 billion Czech guarantee scheme for companies affected by coronavirus outbreak

The European Commission has approved an approximately €18.5 billion (CZK 500 billion) Czech scheme for guarantees on loans to support lending to companies with up to 500 employees that are affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April and 8 May 2020. Under the scheme, the support will take the form of State guarantees on loans. The scheme will be managed by the Czech promotional bank, Českomoravská záruční a rozvojová banka, a.s. (CMZRB). The measure aims at limiting the risks associated with issuing loans to companies with up to 500 employees that are most severely affected by the economic impact of the coronavirus outbreak, enhancing access to external financing, thus ensuring the continuation of their activities.The Commission found that the Czech measure is in line with the conditions set out in the Temporary Framework. 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. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Czech scheme of about €18.5 billion will support companies with up to 500 employees that are most severelyaffected by the coronavirus outbreak by facilitating their access to finance in these difficult times. We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.” More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.57195 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.