State aid: Commission approves two Czech employment schemes to support companies affected by coronavirus outbreak

The European Commission has found the modification of an existing scheme as well as a new measure to support Czech employers to be in line with the Temporary Framework. The existing scheme, approved on 27 July 2020 under case number SA.57102, consists in grants covering up to 80% of the employers’ wage costs. Czechia notified the following modifications to the scheme: (i) a prolongation of the scheme until 30 June 2021, (ii) an increase in the estimated total budget of the scheme, from €866 million to €970 million, (iii) an extension of the period in relation to which the aid may be granted, until 28 February 2021, and (iv) an introduction of co-financing of the scheme from the European Social Fund. It is estimated that around 280,000 businesses will benefit from the modified scheme. The Commission found that the modification is in line with the conditions set out in the Temporary Framework. In particular, (i) the modified measure will finance part of the wage costs for employees who would otherwise have been laid off, (ii) the aid is proportionate as it does not exceed 80% of the gross salaries, and (iii) the scheme respects the maximum duration of 12 months. Czechia also notified a new €160 million scheme to provide a higher level of support to businesses who were prohibited or substantially restricted in carrying out economic activities due to the coronavirus outbreak. This new scheme, consisting in financing up to 100% of the employers’ wage costs, is accessible to businesses of all sizes and covers the wages incurred between 1 October and 28 February 2021. The measure is expected to support around 27,000 businesses. The Commission found that the scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) the support will not exceed €100,000 per company active in the primary agricultural production, €120,000 per company active in the fishery and aquaculture sector and €800,000 per company active in all other sectors, and (ii) the aid will be granted before 30 June 2021. Employers can only benefit from one of the two approved schemes. The Commission concluded that both the amended scheme and the new measure are 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 measures under EU State aid 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 numbers SA.59889 and SA.59334 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.