Following the recent information bulletin issued by this firm in relation to COVID-19, we inform you that yesterday, March 17, 2020, a new Royal Decree-Law on urgent extraordinary measures to deal with the economic and social impact of COVID-19 was approved.
Below is a summary of the main measures adopted by the Government, which we have had access to on the Moncloa website, and which we are currently studying in depth.
“The Council of Ministers has approved a Royal Decree-Law with the largest mobilization of economic resources in the democratic history of Spain to address the economic impact of the coronavirus. It has decided to mobilize nearly 20% of GDP, 200 billion euros with measures to protect and support families, workers, self-employed and businesses.
The aim is to start the recovery as soon as the health emergency is behind us, relaunching our economy, production and employment, so that the fall is followed by economic recovery and not stagnation.
1.- The Government supports the most vulnerable
The first set of measures in the Royal Decree-Law approved by the Council of Ministers is aimed at the elderly, dependents and vulnerable families. 600 million to finance basic benefits of the corresponding social services of the Autonomous Communities and local authorities, with special attention to home care for the elderly and dependents.
In addition, protection is extended to energy and water supplies, guaranteeing essential public services. As a novelty, telecommunications services are also guaranteed. All this for vulnerable families.
The right to housing for those in greatest difficulty is also guaranteed. To this end, a moratorium on mortgage payments is established for mortgage debtors in a particularly vulnerable situation who see their income reduced. The aim is to ensure that no person in a difficult economic situation loses his or her home.
2.- The Government accompanies companies that do not lay off
The second block of measures strengthens employment protection to prevent a temporary crisis like the current one from having a permanent negative impact on the labour market. To this end, the Government has agreed that:
- Wage earners can adapt or reduce their working hours, even by up to 100%, to meet the needs of reconciliation and care arising from this crisis.
- Teleworking is established as the main flexibility measure, when circumstances allow it.
- Temporary adjustments to the workforce will be promoted through the flexibilisation of the Temporary Employment Redundancy Schemes (“ERTES”). The ERTES caused by the Coronavirus crisis will be considered force majeure and workers will be entitled to unemployment benefits, even if they do not meet the prior contribution requirement. The collection of this benefit will not count for the purposes of the subsequent collection of the unemployment benefit.
- In the case of ERTEs, the employer will be exonerated from the employer’s contribution to Social Security contributions.
- For the self-employed, access to the cessation of activity is made more flexible so that they can receive a benefit quickly in the event of economic difficulty.
3.- Government addresses temporary liquidity problems of companies
The third block of measures ensures the liquidity of the companies so that they can remain operational with the aim of preventing a liquidity problem from becoming a solvency problem. For this reason, the creation of a line of public guarantees and endorsements worth up to 100.000 million euros has been approved. This will make it possible to mobilise between 150 and 200 billion euros. The State will be the guarantor of the operations.
Furthermore, additional guarantee lines of 2 billion euros are approved for export companies with agile mechanisms, especially favouring small and medium enterprises.
On the other hand, Public Administrations will help their contractors to mitigate the consequences of COVID-19 on public sector contracts. A specific regime for the suspension of public contracts will be established, with extended deadlines and salary compensation, in order to avoid the termination of contracts and the consequent loss of employment.
To support the productive and business system, the Government is also reforming foreign investment regulations to prevent companies from countries outside the European Union from taking control of Spanish entities in strategic sectors, taking advantage of the temporary drop in the value of their shares in this economic crisis situation.
4.- Government mobilizes resources to develop a vaccine
The Government is also committed to strengthening scientific research for the development of a vaccine or cure for COVID19 . For this reason, 30 million will be allocated to the research line. This money will be used to provide the ‘Consejo Superior de Investigaciones Científicas and the Instituto de Salud Carlos III’ with the necessary resources to deal with this health emergency.
5.- Extension of the validity of the National Identity Card
The Royal Decree-Law also extends for one year the validity of National Identity Documents (“DNI”) that have expired since the state of alert came into effect on Saturday 14 March. The extension of the validity of the National Identity Document will allow for the renewal, according to the current procedure, of the recognized certificates incorporated in it for the same period.
6.- Modification of the Royal Decree declaring the state of alarm
The Council of Ministers also approved a Royal Decree amending Royal Decree 463/2020, of 14 March, declaring the State of Alarm for the management of the health crisis situation caused by COVID-19.
The changes made are as follows:
- Other spaces for public use, such as beaches, are added to the limitation of freedom of movement on public roads.
- It is established that the movement of people allowed must be done individually, unless they are accompanied by disabled people, minors, elderly people, or there is another duly justified cause.
- This is in addition to commercial establishments that are exempt from the suspension of opening to health establishments and veterinary centres or clinics, and hairdressing activities are limited to home services only.
- Any activity which, in the opinion of the competent authority, may pose a risk of contagion because of the conditions in which it is carried out, may be suspended.
- The Minister of Health is empowered to modify, extend or restrict the activities provided for in the Royal Decree, so that a rapid and effective response may be made to situations not provided for in the Decree.
- The suspension of administrative procedures does not affect the procedures for affiliation, settlement and social security contributions, which are procedures that must necessarily be carried out within the established time limits.
7.- Final considerations
The above is a brief summary of the last news in relation to the recently approved regulations in force. It is likely that new measures will be adopted that will extend or develop the support measures related to the COVID-19 crisis. We will keep you informed of any new legislative developments related to the effects of COVID-19.
If you have any questions regarding the effects of COVID-19, please do not hesitate to contact this firm at info@busquets-abogados.com.