Countries around the world are implementing emergency economic measures in response to the novel coronavirus pandemic. On March 12, Prime Minister Pedro Sánchez made available a stimulus package of €200 billion to mitigate the economic damage of the pandemic. The funds which make up 20% of the countries GDP are available for economically vulnerable companies and workers.
Government Schemes for Businesses in Spain
The Royal Decree Law of March 12 makes provisions for SMEs to defer on tax repayment for a period of up to six months. During this time, no interest will be accrued for the first three months, with interest payable in the latter months. Click here for more information on tax relief measures.
The Royal Decree Law 8/2020 also makes provision for financially vulnerable companies to access funds in the form of government-guaranteed loans. On March 24, the government approved €20 billion of which €10 billion will go towards assisting self-employed and small and medium enterprises.
Economic Assistance for Individuals in Spain
Employment and Unemployment Benefits
The decree protects workers from being laid off from their jobs. It allows for temporary suspension of duties as a result of reduced demand or financial stress caused by the coronavirus pandemic. Anyone who is put on temporary work suspension may still apply for unemployment benefits. In the case of temporary work suspensions, companies may be exempt for up to 100% of social security contributions. Provided the company employs less than 50 people.
The government announced a moratorium for mortgage repayments as well as credit and other debt payments. Anyone financially affected by the effects of the coronavirus pandemic will be able to apply for this payment holiday. No interest will be accrued during this time, and applicants will need to make proof that their finances have been affected.
Assistance From the EU
With Europe being one of the hardest-hit by the coronavirus pandemic, Spain is currently calling on the approval of €1.5 trillion COVID-19 recovery fund. If approved, the money would go towards assisting all the severely affected member countries by the pandemic. As it stands, €500 billion has been made available to all member states to support their economies recover from this global pandemic.
Spain is currently experiencing its worst economic period since World War II. On April 20, The Bank of Madrid predicted that the country could see a decline of up to 13.6%. Nearly a quarter of Spain’s workforce consists of temporary workers with SMEs making up a significant part of businesses. The government outlined a plan to focus mainly on assisting the self-employed as well as small and medium enterprises. Specific attention is paid to the tourist sector as tourism contributes 10–11% into the countries economy.
Many businesses in Spain have started opening up, and the country hopes to welcome international tourists from July. The Spanish government is adamant on restoring regular activity and repairing the economy. To learn more about government aids and schemes in place to help businesses, visit: COVID-19 Economic Response for Businesses in Spain.