EU Commission Approves Czech Rent Compensation Scheme

On 3 November 2020, the European Commission announced that it has decided to approve, under the state aid rules, a CZK 3 billion (approximately EUR110.5 million) Czech scheme to support retail businesses and service companies renting premises, which were limited or forbidden to carry out their activities due to the measures imposed by the government in the context of the outbreak of the 2019 novel coronavirus disease.

On 3 April 2020, 8 May 2020, and 29 June 2020, the Commission adopted amendments to extend the scope of the Temporary Framework to cover further types of support measures. On 13 October 2020, the Commission prolonged the period of application of the Temporary Framework.

The Czech Republic notified a scheme under the Temporary Framework that will provide support in the form of direct grants, which will cover 50% of the rent due for the months of July, August, and September 2020.

The purpose of the scheme is to mitigate the liquidity shortages that the affected companies are facing due to the measures taken by the Czech government to limit the spread of the coronavirus.

The Commission found that the Czech scheme is in line with the conditions set out in the Temporary Framework. In particular, the support per company will not exceed EUR800,000 as provided for in the Temporary Framework.

The scheme will run until 30 June 2021. The Commission concluded that the measure is necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a member state.