Petr Dubinsky

EC OK’s €37M Support For Czech Firms Making Coronavirus Medical Supplies

The European Commission (EC) approved CZK 1 billion in aid for Czech firms producing medical supplies needed to combat coronavirus.

The European Commission has approved a Czech aid scheme of up to CZK 1 billion (approximately €37 million) to support investments by small and medium-sized enterprises (SMEs) in the production of products that are relevant to 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.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Speeding up the production of products relevant to tackle the coronavirus outbreak, such as medicines, medical equipment and protective clothing, is of utmost importance to address the current health crisisThis Czech scheme of up to €37 million will incentivise companies to direct their activities to production of these crucial products. We continue to work closely with all Member States to find solutions to fight the pandemic, in line with EU rules.

The Czech support measure

Czechia notified to the Commission under the Temporary Framework scheme to support investments in the production of coronavirus-relevant products. The scheme will have an initial budget of CZK 300 million (approximately €11 million). Such budget may be subsequently increased to up to CZK 1 billion (approximately €37 million).

Under the scheme, which will be open to SMEs, the public support will take the form of direct grants. The public support will cover 50% of the eligible costs companies have to bear to create production capacities to manufacture coronavirus-relevant products

The aim of the scheme is to enhance and accelerate production of products directly relevant to coronavirus. These include medicinal products such as vaccines, hospital and medical equipment including ventilators, protective clothing and equipment as well as diagnostic tools. The acquisition of infectious waste disposal facilities will also be supported.

The Commission found that the Czech scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid will cover a share of investment costs necessary for the production of the products concerned and the costs of trial run of new production facilities. Furthermore, under the scheme, investment projects will be completed within six months after the date of granting the aid.

The Commission therefore concluded that the aid scheme will contribute to the achievement of a common objective of crucial importance, is necessary, appropriate and proportionate to fight the health crisis in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Framework.

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