Relief programmes under scrutiny as Czechs worry about COVID-19 economic fallout

Photo: Ladislav Bába / Czech Radio

A new survey suggests that close to a half of Czechs fear economic fallout from the coronavirus pandemic. Official unemployment numbers remain relatively low, but may in fact be considerably higher, if surveys are to be believed. And while the government has implemented relief programmes, their practical effect has come under criticism from opposition MPs and the private sector.

Jana Maláčová,  photo: ČTK/Roman Vondrouš
More than one-third of Czechs have used up their savings since the government placed the country – and much of its service and entertainment sectors – into lockdown over a month ago, suggests a recent survey by research firm Behavio.

Forty-nine percent of respondents in the study said they were worried about the financial impact of the coronavirus, while 11 percent said they had already lost their job.

Official data from the Labour Office, where the unemployed register, suggests a lower impact.

Social and Labour Affairs Minister Jana Maláčová gave the expected government figure in a discussion on TV Prima’s Nedelni Partie programme on Sunday.

“The numbers I get daily from the Labour Office look good so far. Our forecast shows that unemployment in April will lie at around 3.4 percent. That means roughly 250,000 job seekers.”

The government has implemented a number of relief programs to ease the burden of businesses. These include increased lending ceilings for state-owned investment banks, interest free loans, support for the self-employed and financial compensation for companies whose employees or business activity has been impacted by issues related to the current situation.

However, many business owners and entrepreneur association leaders have criticised the relief programmes for being insufficient, administration-heavy and too slow. 

For example, Michal Frantík’s company, which manufactures digital printers, applied for a government loan over a month ago and is still waiting, despite promises from the Industry and Trade Ministry that it would process such requests within two weeks.

“We filled out the form and we even received an evidence number with an email saying that they would get back to us. No communication has arrived since.”

Photo: Ladislav Bába / Czech Radio
Criticism has also been voiced by the opposition. Speaking to Ms Malacova on TV Prima was TOP 09 MP and former finance minister Miroslav Kalousek, who proposed that a financial deposit be paid out to businesses immediately.

“Time is often much more important than the amount. These companies first have to pay their employees and then they get a contribution from the tax authority. The problem is they often do not have the liquidity to pay them in the first place, and are forced to look for the money elsewhere. Would it be possible for the tax authority to send them a deposit, which would be settled after the crisis?”

Low liquidity that many firms face could also be helping skew the unemployment data, as some employees have been asked by businesses unable to pay them to accept a delayed payment of their salary.