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Spain’s PM eyes €11 billion aid package for struggling companies and self-employed

Spain's Prime Minister Pedro Sánchez on Wednesday pledged an extra €11 billion ($13.4 billion) to help struggling companies and the self-employed cope with the fallout of the pandemic.

Spain's PM eyes €11 billion aid package for struggling companies and self-employed
Spain's Prime Minister Pedro Sanchez (C) and his ministers. Photo: AFP

The aid package, which will be approved “shortly”, will be geared towards the tourism sector, restaurants, bars and other small businesses, Sánchez told parliament.

“It's a significant amount of resources to continue supporting… sectors that were growing and competitive before the pandemic, but which now are logically facing a very difficult situation,” he said.

The aim is to “bolster the balance sheets”, the premier said without giving further details.

The tourism sector and other industries hard hit by the pandemic have for months asked the government for direct aid, but Sánchez's administration has until now rejected that option, offering state-backed loans as well as access to the furlough scheme.

It has so far unblocked €116 billion in credit lines since the start of the pandemic and another €40 billion to provide furloughed workers with 70 percent of their basic salary and to help the self-employed.

Last summer, the government also set up a €10-billion fund to bail out firms in “strategic sectors” that are considered viable but experiencing solvency problems.

Spain's economy contracted sharply by 11 percent in 2020, one of the worst performers in the eurozone, with its key tourism sector battered by the pandemic.

The number of registered jobless in Spain jumped by nearly 23 percent last year to nearly 3.9 million, according to labour ministry figures.

The country's public debt stockpile stood at €1.3 trillion at the end of December, up 10 percent from December 2019 as public expenditure increased and income shrank.
 

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MONEY

How to get Spain’s €200 cost-of-living subsidy

The Spanish government has announced a new €200 handout as part of a package of measures worth around €10 billion to help alleviate the rising cost of living. Find out who is eligible and how to get it.

How to get Spain’s €200 cost-of-living subsidy

The Spanish government on Tuesday December 27th announced a new raft of measures to help families against the rising costs of inflation.

One of these measures is a benefit of €200 for vulnerable families who are struggling with the cost of living and rising household bills.

This is in addition to the temporary reduction of VAT on basic food items such as bread, milk, eggs, cheese and vegetables.  

READ ALSO: Spain axes VAT on basic foods to ease inflation pain 

Who can benefit from this help?

The €200-cheque is specifically for those families or households that earn under €27,000 per year.

Keep in mind, it’s not available to those where two or more members of the household earn under €27,000 each, but only when the income of the whole family adds up to less than this amount.

The government has confirmed, however, that it is available to those who live alone, provided they earn under €27,000 and meet all the other requirements.   

The average household income in Spain is currently €35,000, so this new aid will benefit the most vulnerable families in the country.

Are there any other prerequisites?

Yes, as well as earning under €27,000 it will not be handed out to those whose family heritage exceeds €75,000.

This means that the authorities will take into consideration how much savings you have in your bank account, as well as bonds, shares and stocks. They will also include physical assets such as vehicles or valuable pieces of art, but not the value of your house.

Is the aid compatible with other benefits?

The €200-cheque cannot be claimed by those who are already benefitting from the Minimum Vital Income (Ingreso Mínimo Vital) or those who receive a pension.

For those on Minimum Vital Income, this too has been extended into 2023 and has increased by 15 percent, together with non-contributory pensions.

When will I receive the money?

The government has not yet announced how those who are eligible will receive the payment, but despite this, the newspaper El País has said it will be issued as a single payment via bank transfer once the Tax Agency has proved that they have the right to receive it.

How many people will benefit? 

The government has confirmed that a total of 4.3 million families will be able to access this handout, while the Ministry of Finance estimated that more than 8 million people in total will benefit from it.

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