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State aid: EU Commission approves €184 million Czech rent compensation scheme to support businesses affected by the coronavirus outbreak

The European Commission approved a CZK 5 billion (approximately €184 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 coronavirus outbreak.

The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020 and 8 May 2020. The public support, which will take the form of direct grants, will cover 50% of the original rent due for the months of April, May and June 2020, on the condition that the owner of the premises agrees on a 30% reduction of the original rent.

This aims at incentivising the private sector to mitigate the sudden 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 necessary, appropriate and proportionate to fight the health crisis, in line with Article 107(3)(b) TFEU, and the conditions set out in the Temporary Framework.

In particular, (i) the support per company will not exceed the €800,000 cap set out in the Temporary Framework; and (ii) the scheme will run until 31 December 2020. On this basis, the Commission approved the measure under EU State aid rules.

More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

https://ec.europa.eu/competition/state_aid/what_is_new/covid_19.html

Arianna Podesta –