Prime Minister Sanchez has been in talks all morning with his government to clarify the economic measures Spain will be taking to curve the damage caused by the coronavirus. Here are the main points that they covered:
Sanchez began his speech by noting that, “the coronavirus does not distinguish between ideologies or territories and that it is hard for us all” he continues by stating that there are still many “difficult days to come in the battle against this pandemic, days in which some of our loved ones will be infected whilst others are safe” and that we will all undoubtedly suffer some kind of economic consequences.
He argues that we must bend the rising curve of the pandemic and that do this we must follow the rules and act accordingly to the social discipline outlined by the state of alarm. He resonates with protecting our businesses and families with an economic and social shield which can only be created by a public entity like the government.
The new Royal Decree Law created is the largest created “in the history of [Spain’s] democracy”. He argues that “We need to stop the descending curve of unemployment” he wants to ensure the collaboration of all economic actors to do so.
The first action they will take is to mobilise up to 200,000 million euros, which equates to around 20% of their GDP. From which 117,000 million euros will be entirely public and the remainder will complement the mobilisation of private resources.
One of the agreed measures is that those who are currently unemployed or have less income due to coronavirus restrictions are allowed to postpone their mortgage payments to a later date.
Vulnerable households affected by the state of alarm will also be protected from the cancellation of energy, water, and gas bills.
Sanchez has made a public announcement to companies calling for them to not fire any workers. Hence the use of the ERTE regulation which allows for flexible work hours or suspension of contracts.
- An ERTE is a temporary employment regulation which enables companies to make suspensions within employment contracts or reduce their working hours due to force majure, and this can be applied to partial areas of the workplace or its entirety. There is not limit regarding the duration of this regulation, as it is dependent on the amount of time that this force majure influences business activities.
He claims that the state will provide its businesses with all the liquidity possible in order for them to keep operating. “Creditworthy companies will need liquidity and we shall assure them of this during the crisis” to cover this, the state will provide a credit line with public guarantees of around 100,000 million euros.
“The State will be the guarantor of these operations” Sanchez affirms. There will be more funding lines for those smaller and medium sized businesses as well as for the agricultural sector.
Finally, Sanchez has highlighted his “commitment to the support of a fundamental matter: the scientific investigation which aims to develop a vaccine against COVID-19”, and has agreed to set apart 30 million euros towards this. The Instituto Carlos III will also have all the resources necessary to confront this health crisis.