Czech ministry and industry association assess possible support for businesses over high energy prices

The Ministry of Industry and Trade (MPO), in cooperation with the Confederation of Industry and Transport of the Czech Republic (SP), is assessing possible support for businesses due to high energy prices under the European Commission’s so-called Temporary Crisis Framework. David Hluštík from the MPO communications department told ČTK. The Temporary Crisis Framework makes it possible to use additional aid instruments related to the Russia-Ukraine conflict, noted Bohuslav Čížek, director of the SP’s economic policy section. The ministry did not comment on further support.

Russia launched its invasion of Ukraine on 24 February. The European Commission published the Temporary Crisis Framework at the end of March. Companies affected by sanctions against Russia and high energy prices can receive up to tens of millions of crowns through direct grants, tax and payment relief, or guarantees and loans. Whether and how member states use this option depends on their decision.

Support for additional costs resulting from higher gas and electricity prices may apply to the period from February to December this year. Only companies that demonstrate a monthly increase in energy costs of 200 percent compared with the same period last year will be eligible for grants. One company will be able to receive a maximum of two million euros (around CZK 50m).

According to Hluštík, the MPO wants to obtain an estimate of the financial requirements of businesses that would be eligible for support. „In meetings (with the MPO), we point out that the situation is critical and that this measure must be quickly finalised, and we must make use of this Temporary Crisis Framework for energy prices,“ Čížek said. He added that some conditions are set very strictly, meaning that only a small number of companies would be entitled to compensation. The SP therefore proposes increasing the maximum grant amount or easing the condition regarding the rise in electricity or gas prices.

According to the SP, the Czech Republic should also not limit itself to using only part of the Temporary Crisis Framework. „The crisis and restrictive measures against Russia affect the economy in many ways, including through disruptions to trade ties,“ Čížek added. Assistance is also needed for exporters, to whom the state could offer a guarantee programme. According to Čížek, Germany, for example, is already using such a programme. „Other measures are still being discussed at the working level, and we would like to see concrete progress here as well,“ he added.

The impact of the war in Ukraine on Czech companies is being addressed by an MPO working group called Czech Industry and Ukraine. It has been operating since the end of March and meets roughly once every 14 days. The team consists of ministry deputy ministers and representatives of the Confederation of Industry and Transport, the Chamber of Commerce and the Confederation of Employer and Business Associations.