EU accepts Czech 37 million support-scheme for products against coronavirus

Face Masks and other protective items - production in Czech Republic is co-financed by government. unsplash-logoJeremy Alford

European Commission has approved a CZK 1 billion (around €37 million) aid scheme in the Czech Republic to support investments by small and medium-sized enterprises (SMEs) in the production of products to tackle the coronavirus outbreak.

Margrethe Vestager, Executive Vice-President of the Commission responsible for competition policy, said: “To address the current health emergency, it is of utmost importance to accelerate the production of products to combat the coronavirus outbreak, such as drugs, medical equipment and protective clothing. This “Czech scheme”, worth up to €37 million, will provide an incentive for companies to focus their activities on the production of these key products and we continue to work closely with all Member States to find solutions to fight the pandemic in line with EU legislation.”

The Czech support scheme

The Czech Republic has notified to the Commission an aid scheme under the Temporary Framework to support investments in the production of products to combat coronavirus. The initial budget of the scheme will be CZK 300 million (around EUR 11 million). Subsequently, the budget may be increased to up to CZK 1 billion (around EUR 37 million).

The scheme is open to SMEs and provides for state support in the form of direct grants. It will cover 50% of the eligible costs incurred by enterprises in building up capacity to manufacture products to tackle the coronavirus outbreak.

The objective of the scheme is to improve and accelerate the production of products directly relevant to the coronavirus outbreak. These include medical products such as vaccines, hospital and medical equipment including respiratory equipment, protective clothing and equipment and diagnostic equipment. The acquisition of disposal facilities for infectious waste will also be supported.

The Commission has established that the Czech scheme fulfils the conditions set out in the Temporary Framework. In particular, the aid covers part of the investment costs for the production of the products concerned as well as the costs for the test run of new production facilities. Furthermore, investment projects under the scheme must be completed within six months of the date of granting of the aid.

The Commission therefore concludes that, in accordance with Article 107(3)(c) TFEU and the conditions laid down in the Temporary Framework, the aid scheme is aimed at a common objective of overriding importance and is necessary, appropriate and proportionate to the health emergency.

On this basis, the Commission has approved the measures under the EU State aid rules.

Source: EU-Commission