Government to request that Chamber of Deputies extend state of emergency until 21 February, approves further assistance programmes for businesses

The government will ask the Chamber of Deputies to extend the state of emergency for another 30 days, i.e. until 21 February. The wording of the request was approved by the Andrej Babiš cabinet at a meeting on Monday 18 January 2021.

A further extension of the state of emergency is required by the current epidemiological situation in the Czech Republic. Though the numbers of new cases of people infected with the SARS-CoV-2 virus have been falling slightly in recent days, they nevertheless remain high, as does the burden on the Czech healthcare system. In order for this positive trend to continue, the government considers it necessary to keep the currently ordained crisis measures in effect, which is only possible under a state of emergency.

The government also agreed to minor adjustments to the currently valid rules, which will take effect 19 January. The most important change is the opening of retail shops with stationery, children’s clothing and children’s footwear. Vocational training and the acquisition of specific professional qualifications will also be permitted for selected professions. It also approved a measure allowing an initial medical examination and proof of ownership of a health certificate when commencing employment to be replaced with a sworn statement.

Also approved was a plan to establish a high-capacity vaccination centre in Prague, which would allow for large-scale vaccination of the population. The centre is to be created under the patronage of the Central Military Hospital. To this end the government also issued a new order allowing 500 soldiers in active service to be called in to run it. At the same time, the cabinet decided to increase the state reserves of medical material needed for vaccination – syringes and needles. In addition to the 12 million syringes, 12 million needles and 1.8 million fixed-needle syringes arranged by the Ministry of Health via the EU joint procurement mechanism, the State Material Reserves Administration will also purchase another 5 million syringes and the same number of needles so as to compensate for the decision to use six doses instead of five from each vial.

The government also took up several support programmes to assist segments of the economy hit by the ongoing effects of the coronavirus pandemic. It approved an extension of the Covid – Spas subsidy heading for the period from 1 January 2021 to 30 June 2021. The Ministry for Regional Development will announce the second call for this programme, which will allow clients who purchased vouchers for spa stays but could not use them due to the government measures to utilise them in the new year.

Financial assistance will now also reach owners of small businesses that offer tourists accommodations in what are termed “individual accommodation facilities”. These include cottages, chalets and small guesthouses of five or fewer rooms. Owners of such who offer accommodation services on a permanent basis for the purpose of profit and livelihood will be able to apply for a subsidy of CZK 200 per day under the Covid – Accommodation II programme. The existing subsidy programme for larger accommodation facilities will also be extended. The relevant period has been extended to 22 January.

The support programme for travel agencies will also be extended and expanded. The subsidy heading Covid – Travel Agencies II will follow up on the previous programme, at the same time eliminating the existing proportional disadvantage for large travel agencies. In the first programme, in keeping with the European Commission regulations, there was a ceiling of EUR 200 000 per Member State for each business for any three consecutive accounting periods; in the second this cut-off will be increased to EUR 800 000. The amount of the subsidy for individual applicants will be calculated proportionately based on the amount of contributions to the travel agencies guarantee fund. The allocation will thus be divided up in proportion to the volume of revenue of individual travel agencies.

The government also discussed and approved the launching of two guarantee programmes through which the state will guarantee the loans of businesses affected by the coronavirus through the Czech-Moravian Guarantee and Development Bank. The first guarantee programme Covid Guarantee TA will also concern travel agencies, in particular small and medium ones, which will be able to draw a state-guaranteed loan to cover legally mandated bankruptcy insurance. The support will be provided for a single insurance period started between 1 October 2020 and 31 December 2021.

The second guarantee programme Covid Guarantee – Sport is meant to help address the current problems of self-employed persons and SMEs operating in the sports sector. A bank guarantee from the Czech-Moravian Guarantee and Development Bank is meant to help them acquire a loan from commercial banks despite an unfavourable financial position. This will then serve them for example to make investments in the maintenance and updating of sports facilities, as well as say for energy deposits, wages of core staff, and the like. The programme will be funded from European resources, with the call for submissions to be announced by the end of January.

Cabinet will also send the Chamber of Deputies a draft amendment to the Compensatory Bonus Act. The amendment is meant to allow for the compensatory bonus to also be drawn by persons in bankruptcy, which to date had been disallowed by the rules laid down by the European Commission. The government however considers this restriction unreasonably harsh and after talks with the European Commission it obtained preliminary informal consent to the bonus being provided to persons in bankruptcy, to be implemented outside the Temporary Framework in the form of de minimis state aid.