Spain looks at extending furlough into next year
SPAIN is likely to extend its furlough scheme until the end of the year, and possibly into 2021 for the worst-hit industries, as it grapples with an economic meltdown, the country’s labour minister has said.
A final decision on extending support will be made in September, based on economic data over the summer, Yolanda Díaz, a member of the radical Leftist party Podemos, said. In an interview with the Financial Times, Ms Díaz said: “The government is going to be there for the sectors that most need it – without any room for doubt. It would not make sense to undertake this gigantic, unprecedented effort in the Spanish economy [to preserve jobs] and then just let things fall away.”
She cited the tourism, aviation, maritime, leisure and cultural industries as those facing the most difficulty because they were unlikely to resume business as normal this year due to social distancing and a plunge in global air travel. Spain’s scheme pays about 70pc of the salaries of temporarily laidoff workers. Maintaining the scheme from March through September is expected to cost between €10bn (£9bn) and €11bn. It currently covers some 2m workers, down from a peak of 3.4m.
Last month the French labour minister said its own “temporary unemployment” scheme to avert mass layoffs could last up to two years. The UK’s furlough programme pays workers up to 80pc of their salary. It is set to expire at the end of October and will be gradually tapered back from next month.