Implementing decision 2020/1345 - Granting of temporary support to the Czech Republic to mitigate unemployment risks following the COVID-19 outbreak - Main contents

EN

Official Journal of the European Union

L 314/17

On 7 August 2020, the Czech Republic requested financial assistance from the Union with a view to complementing its national efforts to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of the outbreak for workers and the self-employed.

The COVID-19 outbreak and the extraordinary measures implemented by the Czech Republic to contain the outbreak and its socioeconomic and health-related impact are expected to have a dramatic impact on public finances. According to the Commission’s 2020 Spring forecast, the Czech Republic was expected to have a general government deficit and debt of 6,7 % and 38,7 % of gross domestic product (GDP) respectively by the end of 2020. According to the Commission’s 2020 Summer interim forecast, the Czech Republic’s GDP is projected to decrease by 7,8 % in 2020.

The COVID-19 outbreak has immobilised a substantial part of the labour force in the Czech Republic. This has led to a sudden and severe increase in public expenditure by the Czech Republic in respect of the short-time work scheme known as the ‘Antivirus’ Programme (with its sub-programmes Option A and Option B) and similar measures targeting non-wage labour costs (‘Antivirus’ Programme Option C) or support for the self-employed, as set out in recitals (4) to (8).

More specifically, ‘Government Resolution No 353 of 31 March 2020’, as amended, the legal basis of which is Article 120 of ‘Law No 435/2004 Coll. on employment’, as amended, which is referred to in the Czech Republic’s request of 7 August 2020, introduced the ‘Antivirus’ Programme Options A and B. Those measures are designed to partially compensate wage costs of private employers forced to suspend or significantly scale down their economic activity as a direct consequence of measures taken by the authorities (Option A), or indirectly due to adverse economic effects of the pandemic (Option B), for example employees not able to work due to travel restrictions. Under Option A, the state contribution is provided for 80 % of the compensatory wages paid but not more than CZK 39 000 per employee per month. Under Option B, the state contribution amounts to 60 % of the compensatory wages paid but not more than CZK 29 000 per employee per month. Employees benefiting from the scheme cannot be dismissed during the employer’s participation in the scheme. The measures run from 12 March to 31 October 2020 (2).

Furthermore, the authorities have introduced the ‘Antivirus’ Programme Option C, on the basis of ‘Law No 300/2020 Coll.’ and ‘Law No 187/2006 Coll.’ (3), which are referred to in the Czech Republic’s request of 7 August 2020. That reduces non-wage labour costs (for example, social security contributions paid by the employer) of small companies (up to 50 employees) that maintain employment and the wage bill at a level of at least 90 % of what it was at the end of March 2020 and in March 2020, respectively. Only 90 % of the total expenditure of the measure has been requested to ensure that assistance is matched to expenditure that has maintained employment. The...