(1)

Further to a request from Czechia on 7 August 2020, the Council, by means of Implementing Decision (EU) 2020/1345 (2), granted financial assistance to Czechia in the form of a loan amounting to a maximum of EUR 2 000 000 000 with a maximum average maturity of 15 years, and with an availability period of 18 months, with a view to complementing Czechia’s national efforts to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of that outbreak for workers and the self-employed.

(2)

The loan was to be used by Czechia to finance short-time work schemes and similar measures, as referred to in Article 3 of Implementing Decision (EU) 2020/1345.

(3)

The COVID-19 outbreak has immobilised a substantial part of the labour force in Czechia. This has led to repeated sudden and severe increase in public expenditure in Czechia in respect of the measures referred to in Article 3, points (a), (c), (d) and (e), of Implementing Decision (EU) 2020/1345.

(4)

The COVID-19 outbreak and the extraordinary measures implemented by Czechia in 2020, 2021 and 2022 to contain that outbreak and its socioeconomic and health-related impact had and are still having a dramatic impact on public finances. In 2020, Czechia had a general government deficit and debt of 5,8 % and 37,7 % of gross domestic product (GDP) respectively, which expanded to 5,9 % and 41,9 % respectively at the end of 2021. According to the Commission’s 2022 spring forecast, Czechia is expected to have a general government deficit and debt of 4,3 % and 42,8 % of GDP respectively by the end of 2022. According to the Commission’s 2022 summer interim forecast, Czechia’s GDP is projected to increase by 2,3 % in 2022.

(5)

On 22 September 2022 Czechia requested further financial assistance from the Union in the amount of EUR 2 500 000 000 with a view to continuing to complement its national efforts undertaken in 2020, 2021 and 2022 to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of the outbreak for workers and the self-employed. In particular, Czechia further extended and amended the short-time work schemes and similar measures set out in recitals (6) to (9).

(6)

The short-time work scheme known as ‘Antivirus’ Programme, as referred to in Article 3, point (a), of Implementing Decision (EU) 2020/1345, was designed to 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 as a result of adverse economic effects of the COVID-19 pandemic (Option ‘B’). It had as its legal basis the Government Resolution No 353 of 31 March 2020, as amended, and Article 120 of Act No 435/2004 Coll. (3), on employment, as amended. The Programme was extended and amended with Option ‘A plus’ through Government Resolution No 1039 of 14 October 2020 in order to provide full compensation of wage costs to employers forced to suspend or scale down their activity as a result of measures taken by the authorities. The Programme was also extended through several government decisions, with Option ‘A’ being active from 12 March 2020 until 28 February 2022, Option ‘A plus’ from 1 October 2020 until 31 May 2021 and Option ‘B’ from 12 March 2020 until 31 May 2021 and from 1 November 2021 until 31 December 2021.

(7)

The first compensatory bonus for the self-employed, the so-called ‘Pětadvacítka’ Programme, as referred to in Article 3, point (c), of Implementing Decision (EU) 2020/1345, introduced by ‘Law No 159/2020 Coll.’ (4), provided the self-employed who have been forced to suspend or significantly scale down their economic activity beyond normal business volatility as a result of COVID-19 public health risks or crisis measures taken by public authorities with a compensation bonus of CZK 500 per calendar day per person. ‘Pětadvacítka’ was active from 12 March 2020 until 8 June 2020. Introduced by Law No 461/2020 Coll. (5), its subsequent amendment, the ‘autumn compensatory bonus’ Programme ran from 5 October 2020 until 15 February 2021 and provided a tax bonus of CZK 500 per calendar day for the self-employed forced to suspend or significantly scale down their economic activity as a result of public health risks or crisis measures taken by public authorities. Law No 95/2021 Coll. (6) and the related Government resolutions (No 154/2021 (7) and 188/2021 (8)) introduced another amendment, called the ‘new compensatory bonus for 2021’ which was active from 1 February 2021 to 31 May 2021 and which raised the amount of the tax bonus to CZK 1 000 per day. The last amendment of this compensatory bonus for the self-employed, the ‘compensatory bonus for 2022’, introduced by Law No 519/2021 Coll. (9), also amounted to CZK 1 000 per day and ran from 22 November 2021 until 31 January 2022.

(8)

The partial waiver of social and health security contributions due by the self-employed, as referred to in Article 3, point (d), of Implementing Decision (EU) 2020/1345, had as legal basis ‘Law No 136/2020 Coll.’ (10) (for social security) and ‘Law No 134/2020 Coll.’ (11) (for health security). The State assumed payment of the corresponding contribution due each month from March to August 2020 of social and health security contributions due by the self-employed. While the Programme ended in August 2020, additional amounts had to be paid in 2021 as a result of settlements related to advanced payments paid by the self-employed in 2020. The measure consists of foregone revenues for the Government, which for the purpose of the implementation of Regulation (EU) 2020/672 can be considered equivalent to public expenditure.

(9)

The ‘Care allowance’ for the self-employed, as referred to in Article 3, point (e), of Implementing Decision (EU) 2020/1345, had as legal basis Government Resolutions No 262 of 19 March 2020 (12), No 311 of 26 March 2020, No 354 of 31 March 2020, No 514 of 4 May 2020, No 552 of 18 May 2020, No 1053 of 16 October 2020, No 1260 of 30 November 2020 and No 446 of 10 May 2021 and Article 14 of Act No 218/2000 Coll. (13) on budgetary rules, as amended, which applies to the self-employed in primary agricultural and forestry production, and Article 3 point (h) of Law No 47/2002 Coll. (14), as amended, on support to SMEs, which applies to all other self-employed. The Programme compensates the loss of income incurred by the self-employed as a consequence of the need to take care of children or care-dependent people as a result of the closure of childcare and social care facilities. The daily amount of support was CZK 424 for March 2020 and CZK 500 for the period from April to June 2020. The Programme was extended to the period from October 2020 to May 2021 when it provided a daily support of CZK 400.

(10)

Czechia fulfils the conditions for requesting financial assistance set out in Article 3 of Regulation (EU) 2020/672. Czechia has provided the Commission with appropriate evidence that the actual and planned public expenditure has increased by EUR 5 349 588 352 as of 1 February 2020 as a result of the national measures taken to address the socioeconomic effects of the COVID-19 outbreak. This constitutes a sudden and severe increase because it is also related to an extension or amendment of existing national measures directly related to the short-time work scheme and similar measures that cover a significant proportion of undertakings and of the labour force in Czechia. Czechia intends to finance EUR 215 333 982 of the increased amount of expenditure through Union funds and EUR 634 254 370 through its own financing.

(11)

The Commission has consulted Czechia and verified the sudden and severe increase in the actual and planned public expenditure directly related to short-time work schemes and similar measures, as referred to in the request of 22 September 2022, in accordance with Article 6 of Regulation (EU) 2020/672.

(12)

Financial assistance should therefore be provided with a view to helping Czechia to address the socioeconomic effects of the severe economic disturbance caused by the COVID-19 outbreak. The Commission should take the decisions concerning maturities, size and release of instalments and tranches in close cooperation with national authorities.

(13)

Given that the availability period indicated in Implementing Decision (EU) 2020/1345 has expired, a new availability period for the additional financial assistance is needed. The availability period for financial assistance of 18 months granted by Implementing Decision (EU) 2020/1345 should be extended by 21 months and as a consequence the total availability period should be 39 months starting from the first day after Implementing Decision (EU) 2020/1345 has taken effect.

(14)

Czechia and the Commission should take this Decision into account in the loan agreement referred to in Article 8(2) of Regulation (EU) 2020/672.

(15)

This Decision should be without prejudice to the outcome of any procedures relating to distortions of the operation of the internal market that may be undertaken, in particular pursuant to Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty.

(16)

Czechia should inform the Commission on a regular basis of the implementation of the planned public expenditure, in order to enable the Commission to assess the extent to which Czechia has implemented that expenditure.

(17)

The decision to provide financial assistance has been reached taking into account existing and expected needs of Czechia, as well as requests for financial assistance pursuant to Regulation (EU) 2020/672 already submitted or planned to be submitted by other Member States, while applying the principles of equal treatment, solidarity, proportionality and transparency,

(1)

Article 2 is amended as follows:

(2)

Article 3 is replaced by the following: