Date Published: 17/03/2020
ARCHIVED - Spain approves 20 billion euro package of economic measures to prevent the destruction of employment
ARCHIVED ARTICLE Credit is made available to businesses to improve liquidity and temporary redundancies are given greater flexibility
The Spanish cabinet has approved a second package of economic measures designed to cushion the impact of coronavirus on the businesses and those who will suffer economic hardship as a result of the epidemic and State of Emergency in Spain.
The 20 billion euro package, an amount equivalent to 20% of GDP, “would be the largest mobilization of resources in the democratic history of Spain” and is 45 pages long.
"These are difficult days, " said Prime Minister, Pedro Sánchez.
"Extraordinary times require extraordinary measures," he added.
Half of the money is destined for publicly supported loan guarantees so that companies are able to maintain solvency and liquidity, maintain jobs and remain economically active rather than shutting down altogether due to a lack of liquidity.
Another 17 billion will support the collectives that are hardest hit by the projected economic downturn which will follow the shutdown and will find it hardest to get through as jobs are shed and businesses inevitably fold.
The approved decree includes a moratorium on the payment of mortgages on the habitual residence for workers and the self-employed who are in a situation of economic vulnerability and for those affected by Covid-19.
At present the measure is applicable only to these sectors of the population for those found to be in an economically vulnerable situation due to Covid-19, and to those diagnosed with Covid-19 but it has not been ruled out that the suspension of payment could be extended to anyone made redundant as a result of the national emergency at some point in the future. Indications are that the exemption from mortgage and rental payments is likely to be established for a period of between 1 and 3 months.
The measure is intended to assist workers who lose their income as a result of the crisis and those self-employed who suffer a drastic fall in their income levels as a result of the economic downturn expected during and after the crisis.
This follows in the wake of what was approved days ago in Italy and yesterday in France. It would form part of the "social shield", which also includes streamlining the procedures to activate temporary redundancies (ERTEs Click here for information about what an ERTE is and how it is applied), support for workers and companies affected by the drop in activity "and the economic emergency derived from the coronavirus", measures to guarantee the liquidity of the companies and a last one to promote research to obtain the vaccine against the virus.
The flexibility of the ERTEs will allow companies to enforce partial working hours and implement ERTEs more easily. Any small businesses which are facing economic hardship are strongly advised to talk to their accountant about the flexibility given to them by this new decree and discuss their options.
The decree also includes a ban on cutting basic supplies (water, electricity and gas) to vulnerable groups.
Further measures are directly intended to help companies maintain employment, giving contributions exemptions as well as measures designed to support the self-employed who suffer from a fall in turnover and additional money is being made available to exporters to help with cashflow.
Workers are also permitted to adapt their working hours, or even stop working altogether if they are required to care for another person, giving them some protection against being sacked for non-attendance at work due to their personal situation at home.
The text establishes some of the measures that unions and employers had demanded. One is this flexibility of the ERTE and another is the recognition of unemployment benefits without minimum contribution periods or reduction of accumulated rights.
In other words, all those who are made redundant because of the coronavirus will have the right to claim unemployment benefit regardless of whether they have paid into the system for the normal minimum time period established previously.
Businesses will not have to pay the social security contributions of redundant employees as is normally the case.
“The crisis is temporary and it has to be viewed as temporary” the Prime Minister said, ”this freezing of the economy is temporary and afterwards we will have to face the reconstruction of the country.”
Basic measures summarised:
1. Families
-6 billion allocated for health care, focusing mainly on the elderly. Workers forced to give up their jobs to look after dependents and family members cannot be sacked. They also have the right to adopt flexible hours in this eventuality.
Mortgage moratorium for those affected economically and those who lose their jobs of 1-3 months. No evictions and water, electricity and telecommunications will not be cut off in the event of non-payment due to economic hardship or unemployment.
2. Workers rights
Employees are given greater flexibility to work from home, change their working hours and stop work to care for dependents suffering from the virus
ERTEs: Greater flexibility for companies to issue
ERTEs. The normal minimum period for those issued with these temporary redundancy notices has been waived so unemployment benefit can be claimed immediately.
3. Self-employed: greater flexibility for payment of social security contributions
4. Support for research against the coronavirus.
30 million euros to support vaccination research
5.Support for businesses.
100,000 million euros of credit guarantees to enable companies to maintain liquidity.
Foreign investment rules will change to protect companies from hostile takeovers when they are most vulnerable
Support for exporters
Companies can oblige employees to work shorter hours and adjust pay accordingly, enabling them to keep workers in employment.
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What to do if you are in the Region of Murcia and believe you may have contracted the virus
The regional government has set up a special helpline to supply information to members of the public (900 121212), and also urges people to call the 112 emergency services line if they suspect that they may have contracted the virus rather than going straight to hospital or to a medical centre. Medical staff will be sent to your home to test for the virus.
The Region’s public hospitals have limited the number of visitors to just one per patient.
Sensible precautions
The advice being issued to members of the public by medical authorities all over the world coincides on the following points:
- Wash hands frequently with either soap and water or a sanitiser gel
- Catch coughs and sneezes with disposable tissues – and throw the tissues away immediately after use before immediately washing your hands!
- If you don’t have a tissue, use your sleeve – and wash the item of clothing used at the next opportunity
- AVOID touching your eyes, nose and mouth with unwashed hands
- AVOID close contact with people who are unwell
- Don´t panic!