The Council of Ministers that is held today it must, finally, give an economic response to the serious crisis that the Covid-19 pandemic has unleashed. The Sanchez government last week approved a first package of measures that, as the president himself acknowledged, is far from sufficient in the complex context. And employers, freelancers and opposition have been very critical of this slow response. Executive source point out that the actions will present a “strong social character”, which will aim to help companies, especially smaller ones, and families in vulnerable situations. They also affirm that the main thing is to carry out measures that, in some cases, are still not entirely clear how they will be financed.
The Government is concerned that companies are running out of liquidity, and therefore plans to give access to Mass credit to companies and through various channels, one of them being the Official Credit Institute (ICO). Financial and business sources have already been informed that the work on these loans with State guarantee is very advanced, and they have also been told that a very low fixed interest rate will be applied.
At this point the Government is considering various options. On one side, households will be prevented from suffering cuts in basic services, such as electricity, water or gas for the economic effects of the health alarm. In addition, there is the promise of the Minister of Social Security, Jose Luis Escriva, to provide an extraordinary benefit to parents who lose work hours due to having to attend to their children after the closing of schools. “A new Social Security benefit for those parents who have to stay with their children and the company does not offer them a face-to-face work solution,” Escriva explained, although the Ministry still does not know for sure when it will be approved. And also the concern about the possible lack of liquidity also extends to families, so actions in this regard are not ruled out. Instead, what does seem dcut are measures such as suspension of mortgage payments, since in this case a negotiation between European entities and authorities would also be necessary, and direct aid does not seem to be contemplated either.
Regulation of ERTE
One of the main axes of the crash plan is the articulation of a new regulatory framework for Accelerated, Retroactive and Temporary Causes of Force Temporary Employment Regulation (ERTE) Files. It is a joint proposal of companies and unions for which the minimum period of execution of this measure would become five days and lThe affected workers would receive 75% of their salary under the format of an unemployment benefit managed by the State Public Employment Service (SEPE). This benefit would not consume the rights to benefits accumulated by the workers sent to unemployment and would give resources to those who have not contributed for long enough, which is considered essential for the economic shock plan to calm the spirits of the people in question. For weeks they have seen their situation change 180 degrees and are confined at home. The joint proposal pointed out that all the cost would pass to the State but sources familiar with the development of the project pointed out yesterday that as a modification, the Government introduced the possibility of sharing expenses with companies.
It is one of the areas in which the Government has been most asked to act. Companies, numerous economists and even international organizations have done so, as was the case with the International Monetary Fund (IMF) during the past week. In the Ministry of Finance they affirm that they are working on relevant actions in this regard, but do not confirm that they will be approved today despite numerous requests. Over the weekend, CEOEya requested that tax payments can be split and deferred “for a sufficient period” for “companies that have suffered significantly.” This proposal goes beyond what the Executive has proposed so far, which last week announced that it will allow a moratorium for small companies and self-employed workers of up to six months free of interest in the first three months.
The concern of SMEs
Cepyme, the employers of these medium and small companies, yesterday registered an avalanche of queries about solutions to respond to the state of alarm and the paralysis of economic activity. «What drowns small and medium-sized entrepreneurs is not knowing what they can do, especially in terms of staff flexibility, equipment, telework possibilities …», Explains Gerardo Cuerva, president of this association and direct interlocutor of the Government in the crash plan. Cuerva admits that tourism and the car have been the most affected for the moment “going from 100 to zero”, argues that the impact on the three million SMEs will be on the whole of society and defends despite the never-seen difficulties They present must look forward and trust the great adaptation of these companies.
And the self-employed?
Undoubtedly, one of the groups that will suffer the most from the closure of shops and the economic downturn. The self-employed ask for concrete measures for them, such as the suspension of the quota for the next two months and that the unemployment benefit be guaranteed. And they hope that these points will be approved today because, otherwise, they threaten «block requests for cessation of activity».
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