Authors: Petr Kadlec, Jakub Kocmánek
On 13 October 2020, the European Commission published the fourth amendment to its communication of 19 March 2020 “Temporary framework for state aid measures to support the economy in the current COVID-19 outbreak” (the “Temporary Framework”).[1]
(i) direct grants of up to EUR 800,000, (ii) guarantees on loans, (iii) subsidised interest rates for loans, (iv) short-term export credit insurance, (v) aid for COVID-19 relevant research and development, (vi) aid for upscaling production of medical materials, (vii) investment aid for the production of COVID-19 relevant products, (viii) selective deferrals of tax and/or of social security contributions, (ix) aid for employment maintenance programmes, (x) recapitalisation measures.[2]
A number of these state aid measures have been implemented in the Czech Republic, such as direct grants up to EUR 800,000 for spa vouchers and under the COVID Rent programme, guarantees on loans under the COVID I – III programmes, aid for the production of medical materials, and aid for COVID-19 relevant research.
By the fourth amendment, the European Commission has extended and prolonged the Temporary Framework:
The Temporary Framework was originally intended to apply until the end of 2020.[3] The Commission has now prolonged the measures set out in the Temporary Framework until 30 June 2021 and, for recapitalisation of undertakings, until 30 September 2021. The Commission has declared that it will assess whether to further prolong the Temporary Framework before its expiration in June 2021.
The Temporary Framework now (above the EUR 800,000 limit applicable to grants) allows financial aid of up to EUR 3 million[4] for payment of uncovered fixed costs. The contribution may be provided to undertakings whose turnover declined by at least 30% compared to the same period in 2019. The contribution may apply to fixed costs which are not covered by other sources (insurance, other forms of state aid, and the like). The aid intensity will not exceed 70% of the uncovered fixed costs of medium-sized and large enterprises, and 90% of the uncovered fixed costs of micro and small enterprises.[5]
[1] Communication from the Commission of 19 March 2020, C(2020) 1863 final: HERE.
[2] We covered the Temporary Framework in the past: HERE
[3] Recapitalisation measures were to be enabled until 30 June 2021.
[4] The limit will always apply to the entire group of undertakings.
[5] Small enterprises are enterprises which employ fewer than 50 persons and whose turnover and/or balance sheet total does not exceed EUR 10 million.
