CORONAVIRUS GOVERNMENT MEASURES IN SPAIN
The new government measures, announced by President Pedro Sánchez this Tuesday, the 17th of March, are summarized in a mobilization of up to 200,000 million euros if the boost of private resources is computed. The battery of decisions encourages companies to prioritize temporary employment regulation files (ERTE) over definitive ones (ERE), meets the social needs of groups considered vulnerable and seeks to protect large Spanish listed companies from interference from outside Europe. In more detail, they are as follows:
GUARANTEES TO MOBILIZE 200,000 MILLION
Pedro Sánchez announced on Tuesday the mobilization of up to 200,000 million euros, around 20% of Spanish GDP, to face the impact of the coronavirus crisis. Of this amount, 117,000 million come from the public sector and the rest would be injected through the revitalization that will be achieved in private resources.
SOCIAL INJECTION FOR AUTONOMOUS COMMUNITIES (REGIONS) AND CITY HALLS
600 million of those 200,000 are destined to the financing of basic benefits of the social services of the autonomous communities. "We are not going to leave anyone behind, especially the most vulnerable," stressed the chief executive. Of this sum, half goes to a contingency fund that would strengthen the care for the elderly, homeless and in elderly homes. Another 300 million will relax the spending rule of the municipalities, who will be able to use their surplus if they invest it in social measures.
MORATORIUM FOR THE PAYMENT OF MORTGAGES
The Government has imposed a moratorium on the payment of mortgage payments to banks for those who have seen their income reduced or have become unemployed due to this pandemic. "No one will be evicted in this crisis," said the president. The moratorium covers people "in a situation of special vulnerability", which will be decided based on income and family situation. This measure to make exceptions within defaultings will impact the balance of financial entities.
FOREIGN TRADE AND SEARCH FOR VACCINE
These measures, with the State as guarantor, presents in its line of guarantees an additional sum of 2,000 million for exporting companies, so as to facilitate the restructuring of agricultural export credits when it has been burdened by any type of drought. 30 million are also reserved for vaccine research for Covid-19.
NO CUTTING OF SUPPLIES
Household budgets are also taken into account on the social side of this package of measures. In addition to the moratoriums for the payment of mortgages, vulnerable groups will also have support in dealing with the payment of "basic supplies" such as water, electricity and gas. For a month, a period that can be extended as this crisis progresses, cutting off these supplies is prohibited.
INTERNET CONNECTIONS, ALSO "ESSENTIAL"
Among the "essential" public services, the Government has had internet this time. In the confinement forced by the pandemic, connections have proven essential, with unprecedented spikes in online traffic due to the weight of telework, distance education and leisure activities at home, in addition to calls and messages. In fact, last Saturday it was decreed that among the few establishments that may remain open are those of "technological and telecommunications equipment".
THE GAS CYLINDER WILL NOT RISE
Gas cylinder prices and the regulated gas rate will remain unchanged for the next six months. The Executive does not want price increases in these rates, understanding that many consumers at risk of being vulnerable depend on it for energy. Last Saturday, the Government already warned that it could "adopt the necessary measures to guarantee the supply of electricity, petroleum products, and natural gas."
EXTENSION OF THE ELECTRICAL SOCIAL BONUS
As a complement to the prohibition of power supplies cut among vulnerable groups, the Government has also established an extension to the validity of the electric social voucher for beneficiaries who must renew their application, a process that can be carried out until September 15th. This bonus consists of a discount on the electricity bill, which ranges from 25% to 40%. According to data from last February, more than 1.29 million families enjoy this help.
TEMPORARY EMPLOYMENT REGULATION FILES IN IN FIVE DAYS AND WITHOUT COMPUTING IN UNEMPLOYMENT BENEFITS
The royal decree provides for an acceleration of the mechanisms and deadlines to carry out any type of Temporary Employment Regulation File (ERTE), files that would be decide in just five days. The State would take care of those affected, so that they receive benefits even if they had not contributed the time necessary to access the unemployment benefit. This exceptional period will not count in the computation of the unemployment benefit that the worker accumulates.
DISCONTINUOUS PERMANENT WORKERS
The unemployment benefit is extended to the cooperative worker members as long as they can prove that the suspension or reduction of the working day has been due to the effects of this health crisis. Discontinuous permanent workers and those who carry out permanent jobs, but in a repeated periodical manner, may also benefit from unemployment benefit, provided that "their employment contracts have been suspended due to the exceptional situation".
COMPANIES EXEMPTED BEFORE SOCIAL SECURITY
The royal decree law not only makes the ERTE more flexible to try to avoid a flood of layoffs, but also allows the Social Security quotas to be exempted from paying by the companies for the workers affected in those files. The companies, in fact, would not even have to make a request to the General Treasury of Social Security; directly, this will not invoice the contributions of previously identified employees.
TOTAL REDUCTION OF DAY TO CARE DEPENDENTS
Those who have dependents in their care, up to a second degree of consanguinity, will be able to "organize their work time in a more satisfactory way to be able to attend to their obligations of care " Thus, working people may reduce up to 100% of the working day or reorganize it according to their needs before the closure of schools and social centers. This possibility of conciliation must be communicated to the company with a minimum of 24 hours in advance.
70% OF THE REGULATORY BASE FOR SELF-EMPLOYED
Those activities which are "severely affected" by Covid-19 can also benefit in the chapter of self-employed workers. The conditions for doing so are that the work has been suspended due to the state of alarm or that billing in the month prior to the request has been reduced by at least 75% compared to the average recorded in the previous semester. The amount would be 70% of the regulatory base and also paying fees to Social Security will not be obligatory.
SELF EMPLOYED WITH EMPLOYEES IN CHARGE: BENEFIT AND ERTE
The self-employed with dependent workers may also request this benefit. They should process an ERTE for these and, in turn, access the aforementioned extraordinary benefit. Whether you have employees under responsibility or not, the benefit has duration of one month, extendable until the last day of the month in which the current alarm status ends, as long as it is extended. Some members of the Executive have already pointed to the possibility that the scenario will continue.
SHIELD TO THE LISTED COMPANIES
The Executive wants "to prevent companies from countries outside the European Union from taking control of Spanish entities in strategic sectors, taking advantage of the conjunctural drop in the value of their shares in this situation," the Prime Minister warned yesterday. Therefore, the Spanish listed companies are being armored at a particularly difficult time, as they have accumulated large losses on the Stock Exchange due to the impact of the coronavirus.
NEITHER RENEW THE DNI NOR PASS THE ITV
Every National Identity Document (DNI) that expires during the state of alarm decreed last Saturday will have 12 more months of validity, "until March 13, 2021", as the Government explained yesterday. Likewise, drivers are no longer required to pass the Technical Vehicle Inspection (ITV) during this exceptional period, so the review has been subject to an "immediate suspension" throughout Spain.