Joshua Parfitt
PEDRO Sanchez has today announced a €200 billion package to aid the self-employed, employers and laid-off workers through the coronavirus crisis (details below).
The Prime Minister said the economic measures – equivalent to ‘20%’ of Spain’s GDP – are the ‘largest’ mobilisation of public funds in modern Spanish history.
Speaking during a press conference this afternoon, Sanchez spoke passionately that the ‘heart’ of the 45-page decree is to leave ‘no one behind’.
“We are doing all we can to help the most vulnerable families,” he said during a live broadcast.
“We must protect our employment, our companies, our families, with a shield that can only be forged by public authorities.
“There will come hard times, but united we can resist the pandemic.”
The most important messages from his announcement are the freezing of mortgage payments for affected workers, and a special benefit for the self-employed and laid-off workers whose incomes have been affected.
Autónomos
All self-employed workers with severe losses will be able to access a special benefit (prestación) and will be exempt from paying Social Security contributions.
The benefit will be calculated with 70% of the regulatory base – calculated by average income over the last 180 days – or 70% or their minimum income if they haven’t been in employment for 180 days.
The benefit will last for a month, with possibility to be extended until the state of alarm is over.
It will only be granted to the self-employed who can prove a 75% loss in earnings over the previous month compared with the last 180 days.
These workers will also be exempt from paying social security contributions while the state of alarm is in place.
Temporary Layoffs
Layoffs are known as expedientes de regulación temporal de empleo, or ERTE, in Spain.
The autónomos who have salaried staff will be able to layoff workers without paying severance packages – and workers will likewise be able to access unemployment benefits.
The benefits will be equivalent to 70% of the worker’s regulatory base, calculated from the last 180 days of employment, though those recently employed will also have access via measures announced today.
This is because the coronavirus crisis will be considered a ‘fuerza mayor‘ situation that permits by-passing of certain rules and regulations.
Any unemployment benefits claimed will not affect accumulated rights of the laid-off worker.
Employers will not have to pay social security contributions for their laid-off workers while the ERTE is in effect. Once the temporary layoff period is over, the workers will resume work and employers resume paying social security contributions as before.
“This measure will alleviate the financial burdens of companies and help them recover employment as soon as possible,” Sanchez said.
Workers
The government has also announced workers can reduce their work hours (even up to 100%) in order to care for their families, children and grandparents.
Workers will only be entitled to receive pay for the hours completed, however.
Sanchez said this was a ‘passing crisis’ that Spain ‘will overcome’.
He urged companies ‘not to fire any staff’ and plans for the second royal decree to stop a major blow to the economy.
It comes as at least 100,000 workers are facing temporary layoffs as a result of economic stagnation following last Saturday’s lockdown.
The most hard businesses are in tourism, hospitality and events.
Sanchez said that half of €200 billion package is earmarked as ‘liquidity’ for at-risk businesses.
A further €30 million is for scientific research to develop a covid-19 vaccine and cure. Another €17 million is to support the groups most likely to suffer from the effects of the pandemic.
