Bid to shore up the economy
Measures announced to help businesses and residents
ON Wednesday night the national Parliament approved the unprecedented mobilisation of €200 billion (20% of the country’s GDP) to compensate for the devastating economic impact of the coronavirus pandemic.
Deputies also approved the suspension of all evictions, conditional moratoriums on mortgage payments, speeding up temporary redundancy procedures (ERTEs), and extraordinary payments for the selfemployed who cease trading or have recorded severe losses.
Other initiatives included €400 million for loans from the official credit institute (ICO) to help badly affected sectors, such as tourism, and exemptions from social security contributions for employees in the tourism sector who are on discontinuous contracts which lay them off between February and June.
Tax debts were deferred and it was prohibited to cut off electricity, water or gas supplies to vulnerable households, amongst other measures that were announced last week.
Earlier that day, the Cabinet agreed further economic measures, including how to distribute the €325 million allocated for social policies, and a line of bank guarantees totalling €20 billion for businesses, small and medium-sized companies (PYMEs) and the selfemployed, explained minister for the treasury María Jesús Montero.
The emergency social fund is being divided amongst the regional authorities, by and large according to population but also taking into account the dispersion and percentage of people aged over 65, she said.
This funding must be used for ‘indispensable and urgent’ policies to help especially vulnerable collectives, such as the elderly, dependents, the homeless and single-parent families.
A fund of €25 million is specifically to guarantee the right to food of children who are in poverty or vulnerable, which is being awarded either directly or in food, to families with children who regional governments or local social services have awarded school dinner grants to for this academic year. This aid will continue for as long as the schools are closed, noted Sra Montero.
The first tranche of bank guarantees for businesses, totalling €20 billion, is intended to help them cover costs such as salaries, bills, invoices, loan payments or taxes, and can be used to take out new loans or renew existing ones.
For PYMEs and the self-employed, the guarantees cover 80% of the amount borrowed, while for other businesses they cover 70% of new loans and 60% of renewals.
In Valencia region, president Ximo Puig announced that the first round of measures to help the self-employed and businesses totals €97 million and can be accessed through the regional finance institute (IVF).
Schoolchildren in the Valencia region who receive the school dinner grant (beca comedor) will be given a €60 voucher for their parents to spend on food for them at the supermarket Consum.
Alicante provincial government held a full council meeting online on Wednesday, at which it approved €3 million to be shared among municipalities with fewer than 30,000 inhabitants to cover social spending due to the coronavirus crisis.
This amount is coming from unspent funding and can be increased in the future according to the requirements of town halls, explained its Partido Popular (PP) president, Carlos Mazón.
Priority will be given to the smallest municipalities for use on home help, especially for the elderly, disabled or dependant; providing rehabilitation or occupational therapy at homes; helping the homeless; reinforcing social services; or guaranteeing that families can cover basic needs.
Only 11 municipalities in the province are large enough to be excluded from this aid, since in principal they are better able to cope, but the provincial government will help them too if necessary, noted PP deputy Eduardo Dolón.
Sr Mazón added that ‘once the rate of contagions drops’, they will implement initiatives to accelerate the economic recovery of the province’s productive sectors, especially tourism.
In the Valencia region, by Wednesday more than 120,000 workers had been affected by ERTEs and on Monday a report by the centre for economic prediction (Ceprede) estimated that approximately 32,000 jobs would be lost, principally in hospitality and shops.
Nationwide, Ceprede estimates that the four-week stop could cost a total of 300,000 jobs, most of them at PYME’s, which are worst affected.