Spain to give €3K to €200K to pandemic-hit companies and self-employed workers

Spain's cabinet approved Friday an €11 billion aid programme to help struggling small- and medium-sized firms, and self-employed workers, cope with the economic fallout from the coronavirus pandemic.

Spanish Prime Minister Pedro Sanchez.

The package, which seeks to prevent bankruptcies, will include €7.0 billion ($8.4 billion) in direct aid, Economy Minister Nadia Calvino told a news conference.

Spain’s government will therefore give an approximate package of €3,000 to struggling self-employed workers who pay taxes on an objective estimated basis, and €4,000 to €200,000 to companies and autónomos who don’t fall in that category and whose business losses are 30 percent or higher as a result of the pandemic. 

The funds will have to be used to pay fixed expenses and debts.

“It is a question of taking the lead to prevent possible corporate solvency problems” which could “undermine” Spain’s economic recovery, she said after the measure was approved during an extraordinary cabinet meeting.

This will be the first direct state aid to companies since the start of the health crisis last year. Up until now, government support has taken the form of state-backed loans and a national furlough scheme.

The aid package also includes €3.0 billion to restructure companies’ debt and one billion euros for capital injections.

Socialist Prime Minster Pedro Sanchez announced the aid package last month without giving details on how the funds would be distributed.

The tourism sector and other industries hard hit by the pandemic have for months asked the government for direct aid to help them cope with fixed costs such as rent and utility payments.

The influential head of Spanish banking giant Santander, Ana Botin, also appealed for direct state aid to struggling firms in January.

The government had until now rejected this option. Instead, it unblocked €116 billion in credit lines since the start of the pandemic.

It has also spent €40 billion to provide furloughed workers with 70 percent of their basic salary and to help the self-employed, and transferred €24 billion  to regional governments for spending on health and education.

Last year, Sanchez’s administration also set up a €10-billion fund to bail out firms in “strategic sectors” that are considered viable but experiencing solvency problems.

“Today we have taken another step in the safety net which we have been deploying to protect our productive sector,” Sanchez said in a tweet after the cabinet meeting.

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 around 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.

Spain has been hard-hit by the pandemic, recording over 73,000 deaths from more than 3.1 million cases.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Covid face mask rule on flights in Europe set to be eased

The mandatory EU-wide mask requirement for air travel is set to be dropped from Monday, May 16th, but airlines may still require passengers to wear masks on some or all flights

Covid face mask rule on flights in Europe set to be eased

Europe-wide facemask rules on flights are set to be ditched as early as next week in light of new recommendations from health and air safety experts.

The European Union Aviation Safety Agency (EASA) and European Centre for Disease Prevention and Control (ECDC) dropped recommendations for mandatory mask-wearing in airports and during flights in updated Covid-19 safety measures for travel issued on Wednesday, May 11th.

The new rules are expected to be rolled out from Monday, May 16th, but airlines may still continue to require the wearing of masks on some or all of flights. And the updated health safety measures still say that wearing a face mask remains one of the best ways to protect against the transmission of the virus.

The joint EASA/ECDC statement reminded travellers that masks may still be required on flights to destinations in certain countries that still require the wearing of masks on public transport and in transport hubs.

It also recommends that vulnerable passengers should continue to wear a face mask regardless of the rules, ideally an FFP2/N95/KN95 type mask which offers a higher level of protection than a standard surgical mask.

“From next week, face masks will no longer need to be mandatory in air travel in all cases, broadly aligning with the changing requirements of national authorities across Europe for public transport,” EASA executive director Patrick Ky said in the statement. 

“For passengers and air crews, this is a big step forward in the normalisation of air travel. Passengers should however behave responsibly and respect the choices of others around them. And a passenger who is coughing and sneezing should strongly consider wearing a face mask, for the reassurance of those seated nearby.”  

ECDC director Andrea Ammon added: “The development and continuous updates to the Aviation Health Safety Protocol in light of the ongoing Covid-19 pandemic have given travellers and aviation personnel better knowledge of the risks of transmission of SARS-CoV-2 and its variants. 

“While risks do remain, we have seen that non-pharmaceutical interventions and vaccines have allowed our lives to begin to return to normal. 

“While mandatory mask-wearing in all situations is no longer recommended, it is important to be mindful that together with physical distancing and good hand hygiene it is one of the best methods of reducing transmission. 

“The rules and requirements of departure and destination states should be respected and applied consistently, and travel operators should take care to inform passengers of any required measures in a timely manner.”