Press Advisories

1. 4. 202022:37

Government asks MPs to prolong state of emergency by another 30 days, will present Coronavirus aid-law package to Parliament

At its extraordinary session on Wednesday, 1 April 2020, Andrej Babiš's Government passed several bills and will present them to Parliament for discussion in the state of legislative emergency. They include a range of further steps intended to help cope with the impacts of the Coronavirus epidemic on society. The Cabinet will also request that the state of emergency be extended by another 30 days, i.e., until 11 May.

The Government declared a state of emergency in the Czech Republic from 14h00 on 12 March 2020 for a period of 30 days due to the health threat in connection with establishing the incidence of Coronavirus SARS CoV-2. Under the Constitutional Act on Security of the Czech Republic, the Government may only extend the state of emergency beyond the thirty-day limit with the prior approval of the Chamber of Deputies.

The Government has agreed that the conditions for declaring the state of emergency in the Czech Republic still exist, and that initiation of the state of emergency allowed for the adoption of effective measures that have contributed greatly towards keeping the spread of Coronavirus under control. The Government believes that for successful management of the epidemic, it is necessary to extend the state of emergency by another 30 days. The Central Crisis Team shares this belief. At the extraordinary meeting on 7 April Prime Minister Andrej Babiš will therefore request MPs to allow the state of emergency to be extended until 11 May.

At that meeting the Government will also present several bills for discussion in Parliament in the state of legislative emergency. These concern steps intended to help make it easier for entrepreneurs, firms and individuals to cope with the consequences of the emergency measures adopted, the anticipated downturn in the economy and other impacts on society.

For instance, the Ministry of Finance has proposed a moratorium be declared on the repayment of loans and mortgages by means of the draft act on certain loan repayment measures in connection with the COVID-19 pandemic. If passed in Parliament and signed by the President, this will be binding on all banks and non-banking companies. It will enable debtors (natural persons and companies) to suspend repayment for three or six months, as they choose, provided they express an interest in doing so. The Government also passed the bill on consumer loans. This is intended to broaden the limitation of contractual penalties arising from the delayed repayment of consumer loans or pecuniary debts of self-employed individuals three months in default, which is the period the Insolvency Act considers as proof of such individual's insolvency. The aim is to avert the possibility of debtors falling into a debt spiral. For more information, see the press release of the Ministry of Finance (in Czech language).

The draft act on certain measures to mitigate the effects of the Coronavirus SARS-CoV-2 epidemic on tenants of premises serving as accommodation, recipients of loans granted by the State Housing Development Fund and in connection with the provision of payment relating to the usage of flats and non-residential premises in buildings that contain flats is also intended to help people in financial distress because of a loss of earnings due to the measures announced by the Government. This extraordinary legislation prohibits landlords from serving notice on defaulting tenants who are in financial distress due to the epidemic. It also introduces the possibility of deferring the due date of instalments on loans granted by the State Housing Development Fund until 30 November 2020. For more information, see the website of the Ministry for Regional Development (in Czech language).

The Government is also proposing a similar measure to protect tenants of commercial premises that have problems paying the rent because of loss of income. The temporary moratorium prepared by the Ministry of Industry and Trade in the draft act to mitigate the effects of the Coronavirus SARS-CoV-2 epidemic on tenants of business premises will apply to them also.

The ministers also approved two proposals by the Ministry of Labour and Social Affairs that are to help deal with the impacts of the Coronavirus crisis in the employment sector. The draft act on certain adaptations in the employment sector in connection with emergency measures during the epidemic in 2020 will mean, for example, that firms requesting support as part of the Government-approved Antivirus programme will not have to submit confirmation of debtlessness. The amended Act on Employment should, among other things, make it possible for people to register with the Labour Office on-line. For more information, see the press release of the Ministry of Labour and Social Affairs (in Czech language).

The ministers also sent the draft amendment to the act on certain conditions for doing business and performing certain activities in the tourism sector to Parliament. The main aim of this legislation is to introduce new obligations for providers of accommodation via computing platforms such as Airbnb to inform the local Trade Licensing Office, if requested by that office, of the number of tourism contracts concluded, the total price of these services, and the address at which the guests were staying. It will then be possible to pass this information on to other state supervisory authorities such as the Regional Hygiene Station, so that these guests (usually foreigners) can be traced if the spread of an infectious disease is suspected. For more information, see the website of the Ministry for Regional Development (in Czech language).

The draft act on the powers of the Police of the Czech Republic and the Municipal Police to penalise violations of emergency measures adopted in connection with the incidence of Coronavirus SARS CoV-2 in the Czech Republic was also sent to the Chamber for for discussion in the state of legislative emergency. It should enable the Police of the Czech Republic and the Municipal Police to deal on the spot with offences constituting breach of the emergency measures set by the Government under the Crisis Act or the emergency measures set by the Ministry of Health under the Act on Public Health Protection. Police officers will therefore be able to fine offenders on the spot, even in cases that until now had to be heard in administrative proceedings. For more information, see the press release of the Ministry of the Interior (in Czech language).

The Government also passed the bill on budget responsibility rules. This bill is a response to the anticipated downturn in the state budget income and growth in expenditure, which will signify a deterioration in the state budget balance of tens of millions of Czech Crowns. Therefore, in order to mitigate the impacts of the economic slump the Government has proposed to create a financial reserve of four percent GDP for 2021 and to consolidate public finance in subsequent years. The European Commission enabled Member States to allow temporary fiscal rules by activating the so-called escape clause. For more information, see the press release of the Ministry of Finance (in Czech language).

The Government also discussed several emergency measures. For example, it agreed to extend the temporary re-introduction of border control (in Czech language) in the Czech Republic until 23h59 on 24 April, to instruct the regional council presidents and the Mayor of Prague (in Czech language) to set aside special beds in medical facilities for clients of welfare service institutions with proven COVID-19 (at least 60 beds per 100,000 inhabitants), and to permit the operation of household goods stores (in Czech language) where it is possible to purchase protective respiratory devices, protective gloves and disinfectant. It also approved the release of CZK 17.8 million from the government budget reserve to chapters of the Ministry of Justice (in Czech language) in connection with provision of personal protective equipment against the spread of COVID-19.

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