Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to the Czech Republic to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak
Date: 2020-08-24
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Czechia, EU loan, emergency aid, employment aid, epidemic, fight against unemployment, infectious disease, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 24.8.2020  COM(2020) 448 final 2020/0213 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to the Czech Republic to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council  Regulation  2020/672  (“SURE  Regulation”)  lays  down  the  legal  framework  for 
providing  Union  financial  assistance  to  Member  States,  which  are  experiencing,  or  are 
seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. 
Support  under  SURE  serves  for  the  financing,  primarily,  of  short-time  work  schemes  or 
similar measures aimed at protecting employees and the self‐ employed and thus reducing the 
incidence of unemployment and loss of income, as well as for the financing, as an ancillary, 
of some health-related measures, in particular in the workplace. 

On 7 August 2020, the Czech Republic has requested the Union financial assistance under the 
SURE Regulation. In accordance with Article 6(2) of the SURE Regulation, the Commission 
has  consulted  the  Czech  authorities  to  verify  the  sudden  and  severe  increase  in  actual  and 
planned  expenditure  directly  related  to  the  short-time  work  scheme  called  “Antivirus” 
Programme    (with  its  sub-programmes  Option  A  and  Option  B)  and  similar  measures 
targeting non-wage labour costs (“Antivirus” Programme Option C) and support for the self-
employed, incurred in response to the COVID-19 pandemic.  In particular it concerns:  

(a) 

(b) 

(c) 

(d) 

(e) 

Antivirus  Programme  options  A  and  B,  which  is  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,  shortage  of 
inputs and/or reduced demand for outputs. Under Option A, the state contribution is 
provided for 80% of the wages paid but not more than 39,000 CZK per employee per 
month. Under option B, the state contribution amounts to 60% of the 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 August 2020.  

Antivirus Programme option C, which partially compensates 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.  The  base  of  the  calculation  is 
capped at 150% of the average gross wage in the Czech Republic. The support can 
be provided for some or all of the period from June to August 2020.  

“Pětadvacítka” Programme, which provides self-employed persons who are forced to 
suspend or significantly scale down their economic activity due to public health risks 
or  crisis  measures  taken  by  public  authorities  with  a  tax  bonus  of  CZK  500  per 
calendar day per person. The program is split into two bonus periods: from 12 March 
to 30 April 2020, and from 1 May to 8 June 2020.  

the  partial  waiver  of  social  and  health  security  contributions  due  by  the  self-
employed who maintain activity during the provision of support. The state assumes 
payment  of  the  corresponding  contribution  due  each  month  from  March  to  August 
2020. The waived amount is capped at a level established in the law.   

the  “Care  allowance”  for  self-employed  which  compensates  the  loss  of  income 
incurred  by  self-employed  persons  as  a  consequence  of  the  need  to  take  care  of 
children  or  care-dependent  people  due  to  the  closure  of  child  and  social  care 

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facilities. The daily amount of support is CZK 424 for March and CZK 500 for April 
to June. . 

The Czech Republic provided the Commission with the relevant information.  

Taking into account the available evidence, the Commission proposes to the Council to adopt 
an  Implementing  Decision  to  grant  financial  assistance  to  the  Czech  Republic  under  the 
SURE Regulation in support of the above measures. 

• 

Consistency with existing policy provisions in the policy area 

The present proposal is fully consistent with  Council Regulation 2020/672, under which the 
proposal is made. 

The present proposal comes in addition to another Union law instrument to provide support to 
Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 
November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) 
No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, 
which amends that instrument to  extend its scope to  cover major public  health emergencies 
and to define specific operations eligible for financing, was adopted on 30 March.   

• 

Consistency with other Union policies 

The proposal is part of a range of measures developed in response to the current COVID-19 
pandemic  such  as  the  “Coronavirus  Response  Investment  Initiative”,  and  it  complements 
other  instruments  that  support  employment  such  as  the  European  Social  Fund  and  the 
European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and 
lending in this particular case of the COVID-19 outbreak for supporting Member States, this 
proposal  acts  as  a  second  line  of  defence  to  finance  short-time  work  schemes  and  similar 
measures,  helping  protect  jobs  and  thus  employees  and  self-employed  against  the  risk  of 
unemployment.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this instrument is Council Regulation 2020/672.   

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  follows  a  Member  State  request  and  shows  European  solidarity  by  providing 
Union financial assistance in the form of temporary loans to a Member State affected by the 
COVID-19  outbreak.  As  a  second  line  of  defence,  such  financial  assistance  supports  the 
government’s increased public expenditure on a temporary basis in respect of short-time work 
schemes  and  similar  measures  to  help  them  protect  jobs  and  thus  employees  and  self-
employed against the risk of unemployment and loss of income. 

Such  support  will  help  the  population  affected  and  helps  to  mitigate  the  direct  societal  and 
economic impact caused by the present COVID-19 crisis.  

• 

Proportionality 

The proposal respects the proportionality principle. It does not go beyond what is necessary to 
achieve the objectives sought by the instrument.  

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3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out. 

• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

4. 

BUDGETARY IMPLICATIONS 

The  Commission  should  be  able  to  contract  borrowings  on  the  financial  markets  with  the 
purpose  of  on-lending  them  to  the  Member  State  requesting  financial  assistance  under  the 
SURE instrument.  

In  addition  to  the  provision  of  Member  State  guarantees,  other  safeguards  are  built  into  the 
framework in order to ensure the financial solidity of the scheme: 

 

 

A rigorous and conservative approach to financial management; 

A  construction  of  the  portfolio  of  loans  that  limits  concentration  risk,  annual 
exposure and excessive exposure to individual Member States whilst ensuring 
sufficient resources could be granted to Member States most in need; and 

 

Possibilities to roll over debt. 

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2020/0213 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Council Regulation (EU) 2020/672 to the Czech 
Republic to mitigate unemployment risks in an emergency situation following the 
COVID-19 outbreak 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having regard to Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of 
a  European  instrument  for  temporary  support  to  mitigate  unemployment  risks  in  an 
emergency (SURE) following the COVID-19 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

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 its socio-economic consequences for workers.  

The  COVID-19  outbreak  and  the  extraordinary  measures  implemented  by  the  Czech 
Republic to contain the outbreak and its socio-economic 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.  

(4)  More specifically, “Government Resolution No. 353 of 31 March 2020, as amended”, 
and  “Article  120  of  Law  No.  435/2004  Coll.,  on  employment,  as  amended”,  as  they 
are  referred  to  in  the  Czech  Republic’s  request  of  7  August  2020,  introduced 
“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 wages paid but not more 
than  CZK  39  000  per  employee  per  month.  Under  Option  B,  the  state  contribution 

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OJ L 159, 20.5.2020, p.1. 

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(5) 

(6) 

(7) 

(8) 

amounts to 60% of the 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 
August 2020.  

Furthermore, the authorities have introduced “Antivirus” Programme Option C, on the 
basis  of  “Law  No.  300/2020  Coll.”  and  “Law  No.  187/2006  Coll.”2,,  as  they  are 
referred to in the Czech Republic’s request of 7 August 2020. That measure partially 
compensates 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. 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 base of the 
calculation is capped at 150% of the average gross wage in the Czech Republic. The 
support can be provided for some or all of the period from June to August 2020. 
The “Pětadvacítka” Programme, as introduced by “Law No. 159/2020 Coll.”3, as it is 
referred to in the Czech Republic’s request of 7 August 2020, provides self-employed 
persons  with  a  tax  bonus  of  CZK  500  per  calendar  day  per  person  to  those  who  are 
forced  to  suspend  or  significantly  scale  down  their  economic  activity  due  to  public 
health  risks  or  crisis  measures  taken  by  public  authorities.  The  program  is  split  into 
two bonus periods: from 12 March to 30 April 2020, and from 1 May to 8 June 2020. 
The  tax  bonus  consists  in  foregone  revenues  for  the  government,  which  for  the 
purpose  of  the  implementation  of  Council  Regulation  2020/672  can  be  considered 
equivalent to public expenditure. 

On  the  basis  of  “Law  No.  136/2020  Coll.  (for  social  security)”  and  “Law  No. 
134/2020 Coll. (for health security)”, as they are referred to in the Czech Republic’s 
request of 7 August 2020, the authorities have introduced the partial waiver of social 
and health security contributions due by self-employed persons who maintain activity 
during  the  provision  of  support.  The  state  assumes  payment  of  the  corresponding 
contribution  due  each  month  from  March  to  August  2020.  The  waived  amount  is 
capped at a level established in the law. 

Finally, on the basis of “Government Resolutions No. 262 of 19 March 2020, No. 311 
of 26 March, No. 354 of 31 March, No. 514 of 4 May and No. 552 of 18 May; Article 
14  of  Law  No.  218/2000  Coll.,  on  budgetary  rules,  as  amended  (for  S/E  in  primary 
agricultural and forestry production), Article 3 letter h) of Law No. 47/2002 Coll., as 
amended,  on  support  to  SMEs  (for  all  other  S/E)”,  as  referred  to  in  the  Czech 
Republic’s  request  of  7  August  2020,  the  authorities  have  introduced  the  “Care 
allowance” for self-employed persons. That measure compensates the loss of income 
incurred  by  self-employed  persons  as  a  consequence  of  the  need  to  take  care  of 
children or care-dependent people due to the closure of child and social care facilities. 
The daily amount of support is CZK 424 for March and CZK 500 for April to June. 

(9) 

The Czech Republic fulfils the conditions for requesting financial assistance set out in 
Article  3  of  Regulation  (EU)  2020/672.  The  Czech  Republic  has  provided  the 
Commission with appropriate evidence that the actual and planned public expenditure 

2  Law  No.  300/2020  Coll.,  on  the  waiver  of  social  security  contributions  and  contributions  to  the  state 
employment policy paid by some employers as taxpayers in connection with emergency measures during the 
epidemic in 2020 and amending Law No. 187/2006 Coll., on health insurance, as amended   

3  Law No. 159/2020 Coll., on a compensation bonus related to crisis measures related to the incidence of SARS 

CoV-2 coronavirus, as amended   

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has  increased  by  EUR  2  940  446  745  as  of  1  February  2020  due  to  the  national 
measures taken to address the socio-economic effects of the COVID-19 outbreak. This 
constitutes a sudden and severe increase because the new measures cover a significant 
proportion of undertakings and of the labour force in the Czech Republic. The Czech 
Republic intends to finance EUR 940 446 745 of the increased amount of expenditure 
through Union funds and its own financing.  

(10)  The Commission has consulted the Czech Republic and verified the sudden and severe 
increase  in  the  actual  and  planned  public  expenditure  directly  related  to  short-time 
work  schemes  and  similar  measures  referred  to  in  the  request  of  7  August  2020,  in 
accordance with Article 6 of Regulation (EU) 2020/672.  

(11)  Financial  assistance  should  therefore  be  provided  with  a  view  to  helping  the  Czech 
Republic  to  address  the  socio-economic  effects  of  the  severe  economic  disturbance 
caused by the COVID-19 outbreak. 

(12)  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 
under Articles 107  and  108 TFEU.  It  does not  override the  requirement  for Member 
States to notify instances of potential State aid to the Commission under Article 108 
TFEU. 

(13)  The  Czech  Republic  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 the Czech Republic has implemented that expenditure. 

(14)  The  decision  to  provide  financial  assistance  has  been  taken  taking  into  account 
existing  and  expected  needs  of  the  Czech  Republic,  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, 

HAS ADOPTED THIS DECISION:  

The Czech Republic fulfils the conditions set out in Article 3 of Regulation (EU) 2020/672.   

Article 1 

Article 2 

1. 

2. 

3. 

The  Union  shall  make  available  to  the  Czech  Republic  a  loan  amounting  to  a 
maximum of EUR 2 000 000 000. The loan shall have a maximum average maturity 
of 15 years. 

The availability period for financial assistance  granted by this Decision shall be 18 
months starting from the first day after the entry into force of this Decision.  

The  Union  financial  assistance  shall  be  made  available  by  the  Commission  to  the 
Czech Republic in a maximum of eight instalments. An instalment may be disbursed 
in  one or several  tranches. The maturities of the tranches under the first  instalment 
may  be  longer  than  the  maximum  average  maturity  referred  to  in  paragraph  1.  In 
such  cases,  the  maturities  of  further  tranches  shall  be  set  so  that  the  maximum 
average  maturity  referred  to  in  paragraph  1  is  respected  once  all  instalments  have 
been disbursed.  

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4. 

5. 

6. 

The  first  instalment  shall  be  released  subject  to  the  entry  into  force  of  the  loan 
agreement provided for in Article 8(2) of Regulation (EU) 2020/672.  

The Czech Republic shall pay the cost of funding of the Union referred to in Article 
4 of Regulation (EU) 2020/672 for each instalment plus any fees, costs and expenses 
of the Union resulting from any funding.  

The Commission shall decide on the size and release of instalments, as well as on the 
size of the tranches.  

1. The Czech Republic may finance the following measures: 

Article 3  

(a) 

(b) 

(c) 

(d) 

(e) 

the “Antivirus” Programme as provided for by Government Resolution No. 353 of 31 
March  2020,  as  amended,  and  Article  120  of  Law  No.  435/2004  Coll.,  on 
employment, as amended; 

the “Antivirus” Programme Option C, as provided for by Law No. 300/2020 Coll.; 

the “Pětadvacítka” Programme, as provided for by Law No. 159/2020 Coll.;  

the  partial  waiver  of  social  and  health  security  contributions  due  by  the  self-
employed), as provided for by Law No. 136/2020 Coll. (for social security) and Law 
No. 134/2020 Coll. (for health security);  

the  “Care  allowance”  for  self-employed  persons,  as  provided  for  by  Government 
Resolutions No. 262 of 19 March 2020, No. 311 of 26 March, No. 354 of 31 March, 
No. 514 of 4 May and No. 552 of 18 May; Article 14 of Law No. 218/2000 Coll., on 
budgetary  rules,  as  amended  (for  S/E  in  primary  agricultural  and  forestry 
production), Article 3 letter h) of Law No. 47/2002 Coll., as amended, on support to 
SMEs (for all other S/E). 

Article 4 

The  Czech  Republic  shall  inform  the  Commission  by  [DATE:  6  months  after  date  of 
publication  of  this  Decision],  and  every  6  months  thereafter  of  the  implementation  of  the 
planned public expenditure until such time as that planned public expenditure has been fully 
implemented.  

This Decision is addressed to the Czech Republic.  

Article 5 

This Decision shall be published in the Official Journal of the European Union.  

Done at Brussels, 

Article 6 

For the Council 
The President 

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