Since the last update on 24 March, the Government adopted several new measures to tackle the spread of the coronavirus. Also, the Government decided to extend the state of emergency until 11 April.
Since 24 March, the Government adopted several new measures to support employment. On 26 March, it decided that financial support to employees that have to take care of a child will be extended to the full duration of the closure of schools. The child has to be younger than 13.
Since 26 March, the rules for persons that travel across borders to work were updated. Workers in medical sector, social services and in public rescue services can cross the borders now. For all other workers, the restrictions to cross borders still apply.
On 31 March, the Government updated the Antivirus programme focused on the protection of employees that compensates for the financial resources paid by companies. From this date, companies will be able to apply for the compensations online. The Government believes that this measure will limit the number of employees made redundant and will prevent the increase in unemployment.
On the same day, the Government approved a one-off financial aid to self-employed persons of 25 000 CZK (approximately 900 EUR). The self-employed persons would have to prove that they suffered economic damage because of the application of extraordinary measured issued by the Government. In addition to that, applicants will have to prove that their revenue during the period between January and March 2020 decreased by at least 10% compared to the same period in 2019 and that their gross income was at least 180 00 CKZ (approximately 6 500 EUR) last year. The proposal still needs to be approved by the Parliament.
The Government proposed a legislative act that would help people dealing with insolvency by loosening the current rules.
New support programmes for businesses
Several new programme were approved to help companies:
• Technology COVID 19 – the programme is focused on SMEs that would either acquire new devices and equipment for the production of medical devices and personal protective equipment, would expand the existing production to produce such products, or would transform their production lines for this purpose. The budget of the programme is 300 mil. CZK (approximately 11 mil. EUR) and the financial support will range from 250 000 to 20 mil. CZK (9 000 to 725 000 EUR).
• Czech Rise Up – the programme will support acquisition of material for the production of protective and medical devices or reimbursement of labour costs for implementation of new solutions that can be immediately put into practice, but their mass production hasn’t started yet. Furthermore, it will support selected non-investment expenditures on the use of existing technologies to bring new medical and non-medical solutions, and development of new products that could be used for new medical and non-medical solutions against COVID 19 into practice. The budget of the programme is 200 mil. CZK (approximately 7.2 mil. EUR) and the financial support will be up to 5 mil. CZK (approximately 180 000 EUR).
Since 30 March, the Government started the project of smart quarantine that aims to prevent further spreading of the coronavirus. The project will map all the contacts of the persons that had a positive test on coronavirus with the help of modern technologies. The data should help to track persons that could be infected. If the infected person agrees, data about his location and payment history will be obtained from his mobile phone. With this data, an interactive map will be created that would help the infected person to indicate persons he/she was in contact with. Those persons would be tested to prevent a possible further spreading of the virus. The Government got inspired by South Korea, Singapore and Hong Kong, where similar projects were introduced. The first region to start with the project will be South Moravia. If the project proves to be successful in the region, it will be gradually extended to all the regions in the Czech Republic. The aim of the Government is to implement the programme in the whole country by 12 April.
Government proposes to extend state of emergency until 11 May
At the meeting on 1 April, the Government decided to propose to the Parliament to further extend the measures related to the state of emergency until 11 May. The Parliament will vote on this proposal on 7 April. At the same meeting, Members of the Parliament will vote on several other measures to support businesses and self-employed.
The Ministry of Finance proposed a moratorium on payments of loans and mortgages that would be applicable for all banks and non-bank companies. Both natural and legal persons that would be interested in this option would be eligible to cease to pay the instalments for 3 to 6 months.
Furthermore, the Government proposed a law that would prohibit landlords to end the contract will the tenant if he/she is unable to pay the rent due to the loss of income because of the measures related to coronavirus. The Government proposed a similar measure for the commercial rentals as well. The Government proposed measures focused on the labour market as well. They would for example enable unemployed persons to register at the labour office online.
Due to the expected decrease in state budget revenues and increase in expenditures, the Government expects that the budget deficit will be increased by tens of billions CZK. Therefore, it proposed to create a financial reserve of 4% GDP and continuously consolidate the debt in the coming years. This measure would be possible because of the activation of the general escape clause of the Stability and Growth Pact of the EU.
The proposals presented on 1 April need to be approved by the Parliament.
As of 2 April, there were 3 604 confirmed cases of coronavirus with 40 deaths and 61 cured patients. The number of tested persons reached 60 990.
Source: Government of the Czech Republic, BusinessInfo.cz
Prepared by the team of foreign office CzechTrade Brussels