COVID-19: The Spanish Government announces a royal decree-law of economic and social protection measures
Mortgages, supplies and vulnerable people
-The right to housing of people with more difficulties is guaranteed. To do this, a moratorium is established on the payment of mortgage loan installments that will benefit those workers who see their income reduced or go unemployed as a result of this emergency situation.
-600 million euros are earmarked for financing basic benefits of the corresponding social services of the autonomous communities and local entities, with special attention to home care for the elderly and dependents.
Half of the money will go towards making the spending rule more flexible so that municipalities can use their surplus if they invest it in social care items: care for dependency, social services and all kinds of problems associated with the coronavirus
-Protection is extended to energy and water supplies, guaranteeing essential public services. As a novelty, telecommunications services are also ensured, a system that after the state of alarm was decreed has become key, with a large part of the population forced to remain confined to their homes.
Likewise, the duration of the electricity social bond is extended to the beneficiaries who had to renew their application, who will be able to carry out the process until next September 15.
Job protection
Salaried workers are allowed to adapt or reduce their working hours, even up to 100%, to meet the needs of conciliation and care. Among the exceptional circumstances that may justify these changes are the closure of educational centers or residences or the absence of the person who until now was in charge of caring for minors or dependents. The reduction of working hours will not require any prior notice, beyond that derived from good faith and will not be limited in its enjoyment by a minimum or maximum percentage, and may even reach a one hundred percent reduction and without being punished or fired. The figure of a Social Security benefit that compensates for this reduction is not established, nor is the bonus of 600 euros provided for in the Italian measures for cases in which teleworking is impossible and it is necessary to hire a caregiver.
-Regarding telework, its preferential nature is emphasized, simplifying the way of doing it, considering the obligation to carry out the risk assessment on an exceptional basis, through a self-assessment carried out voluntarily by the worker himself.
-Temporary workforce adjustments are promoted through the flexibility of the Temporary Employment Regulation Files. The ERTES caused by the Coronavirus crisis will be considered force majeure and workers will have the right to the contributory unemployment benefit, even if they do not meet the required prior contribution requirement. The collection of this benefit will not count towards the subsequent collection of the unemployment benefit. Likewise, the employer will be exonerated from the business contribution of Social Security contributions.
Unlike the Spanish, the Italian government has prohibited for two months that companies can fire their employees for economic reasons derived from the emergency situation. However, terminations of employment for disciplinary reasons will be allowed.
-For the self-employed group, access to cessation of activity is made more flexible so that they can quickly collect a benefit in the event of financial difficulty. This aid, which would last one month, but could be extended, will be calculated with 70% of the regulatory base or with 70% of the minimum base when the minimum contribution period cannot be credited to qualify for the benefit.
The beneficiaries will be autonomous, including corporate and employer, whose activity is suspended due to the declaration of the state of alarm or whose billing in the month prior to which the benefit is requested is reduced, at least, by 75% in relation to the average billing for the previous semester.
The collection of the benefit will be “compatible with the exemption from payment of Social Security contributions” and with the approval of ERTE for its workers, if it has salaried employees.
-People who are receiving unemployment benefit will have their benefit renewed without having to renew the documentation in person. The offices for the care of the unemployed serve online.
Business liquidity
-The operability of the companies will be ensured in order that a short-term liquidity difficulty does not become a solvency problem. For this reason, the creation of a line of guarantees and public guarantees for a value of up to 100,000 million euros has been approved. This will allow mobilizing between 150,000 and 200,000 million euros. The State will be the guarantor of the operations. In this way, companies will be able to request loans from private banks with the endorsement of the State. This is a different measure from the 200 million euros in public credits, granted through the ICO, approved last week.
-In addition, additional lines of guarantees of 2,000 million euros are approved for exporting companies with agile mechanisms, especially favoring small and medium-sized companies.
-On the other hand, the Public Administrations will help their contractor companies to mitigate the consequences of COVID-19 in public sector contracts. A specific regime of suspension of public contracts will be established, with extension of terms and compensation of salaries, in order to avoid the termination of contracts and the consequent loss of employment.
-To support the productive and business system, the Government also reforms the regulations on foreign investment, with the aim of preventing companies from countries outside the European Union from taking control of Spanish entities in strategic sectors, taking advantage of the economic downturn of the value of its shares in this situation of economic crisis. The stock market crash that we have suffered in recent days has left some of the main strategic companies in the country exposed “to take a shot”, which saw their shares plummet to a minimum. Only last week the Ibex 35 lost almost 21% of its value.
Specific subsidies for SMEs in difficulties are missed as has been done by France, a country that has created a solidarity fund for small companies with less than one million euros of annual turnover that have stopped having income or have seen them reduced in at least 70%. It is estimated that they will be around 600,000, and they will receive 1,500 euros with a simple declaration, without requiring any type of audit. The estimated cost reaches 2,000 million.
Scientific investigation.
The Government is also committed to strengthening scientific research to develop a vaccine or cure for COVID19. For this reason, 30 million will be dedicated to the research item. This money will be dedicated to providing the Higher Council for Scientific Research and the Carlos III Health Institute with the necessary resources to face this health emergency.