Spain looks at ex­tend­ing fur­lough into next year

The Daily Telegraph - Business - - Business - By Si­mon Foy

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.

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