The Government plans to put the bandage on the economic wound opened by the coronavirus pandemic today and the exceptional contingency measures adopted on Saturday to contain it, which included the closure of the bulk of shops and all educational centers in Spain or the confinement of the country, which will throttle consumption. The plan consists of a stimulus package in the form of loans and public guarantees for tens of billions of euros to try to overcome the recession and, on the other hand, of labor measures to try to contain the job destruction that began to break loose yesterday during the first working day under alarm.
The great unknown was yesterday in the amount of liquidity that the Government was going to be able to mobilize for today through loans from the Official Credit Institute (ICO) and public guarantees aimed at banks granting more financing to companies. Different sources pointed to an initial figure of 20,000 million expandable to 100,000. The resulting amount would join the 14,000 million liquidity provided last Thursday, when deferrals of 30,000 euros were approved in the payment of personal income tax, VAT and companies to SMEs and the self-employed with a turnover of no more than six million annually; and the 400 million in ICO credits already provided for tourism, transport and hospitality companies.
The long-awaited package of labor measures was already more defined yesterday. Employers and unions already had the “verbal commitment” of the Executive to adopt the measures agreed jointly by the leaders of the CEOE-Cepyme employers and the CC OO and UGT plants and the Prime Minister, Pedro Sanchez, last Thursday.
The plan included three conjunctural legal changes while the coronavirus crisis lasts for temporary employment regulation (ERTE) files that would benefit both companies and workers.
Specifically the minimum contribution period required for the worker to collect unemployment benefit while his job is suspended will be eliminated; the benefits consumed in said time will not count as spent for future periods of unemployment; and companies will not have to pay workers’ contributions for the duration of the ERTE.
Furthermore, it seems that the Government will agree to include the closure of companies and the suspension of activities due to the coronavirus as a cause to be able to carry out an ERTE by “force majeure.” Unlike economic, technical, organizational and production causes, which require a long period of negotiation with the unions, these require only the approval of the labor authority of the autonomous community, which must be pronounced in five days. The social partners also request that the required documentation be lightened.
All in all, eThe plan could also shorten the ERTE term for objective reasons, the most common, so that the consultation period and the Inspection report are not delayed by seven days.. In addition, if the company has suspended activity, the ERTE would be retroactive from the date of communication to the staff.
The Executive will also approve this Tuesday various measures for the more than three million self-employed workers. In principle, for those who decide to close their business, the cause of “force majeure” due to the impact of the coronavirus will be created for the access of these workers to the cessation of activity benefit (similar to unemployment benefit and which is now practically not granted by the requirement of your requirements).
In turn, for himFreelancers who have workers and maintain them or for those who do not want to shut down their businesses, the Executive will approve a suspension (not postponement) of the payment of the fee to Social Securityl, which would be considered for a period of two months, at least.
It was also under study yesterday, according to some sources, that the State completes the amount of the regulatory base that is taken for the provision of cessation of activity, from the current 70% to 100% or that the self-employed who had not quoted the cessation of activity the 12 months prior to closing may also collect the benefit.
In order to cope with absences from work for child or elderly care due to the closing of schools or day centers, the Government would be considering new paid leave or new causes for suspension of the employment relationship. In both cases, the cost of these grants would be financed with a specific fund, which employers and unions have already requested.
Finally, it is expected that, once these mitigation measures have been approved, the Government urges companies to facilitate telework, even in sectors and companies where it is not established or planned, something that was taken out of Saturday’s decree at the last moment after dividing the government. It remains to be seen how it is rescued now and its degree of demand.
The municipalities ask to be able to spend their surplus
The Spanish Federation of Municipalities and Provinces (FEMP) prepares a battery of proposals for the Government in the face of the crisis created by the extension of Covid-19, among which it considers that local entities are allowed to spend the surplus they have on measures that they face to the situation.
The Board of Spokespersons of the entity held a meeting by videoconference yesterday Monday. The president, Abel Caballero, has raised the debate on a series of measures proposed by the PSOE, PP and IU to reach an agreement and deliver them to the Government.
Between them, the municipalities demand that the spending rule be relaxed, one of the limitations of the Stability Law to control the deficit of the public administrations and that the municipalities have been asking for a relaxation for them for a long time. This rule prevents local entities from spending the annual surplus except in very specific projects that must be authorized by the Ministry of Finance, so that the money becomes savings. According to the data provided by the FEMP last February, it is calculated that the municipalities will close 2019 with between 4,000 and 5,000 million euros in surplus, which will be added to the remnants of previous years to around 26,000 million euros.