CATALAN ECONOMY

Guide: Aid for productive activity and employment to counter the effects of coronavirus

25.05.2020

aid-for-business

The Government of Catalonia, as well as the Government of Spain and the European Union, have issued a series of urgent measures aimed at mitigating the effects of the Covid-19 pandemic on the economy.

These measures are aimed at productive activity and employment, such as a moratorium on taxes, help for the self-employed or improvements in the liquidity of companies, among many others.

Below are some of the highlights of these three entities. You can also check our guide with the complete list of measures, that is updated constantly.

Government of Catalonia

The main measures promoted by the Catalan government are as follows (please note that in the coming days, a second package of economic measures will be launched):

Grants for the self-employed. A grant of up to €2,000 has been launched for those self-employed individuals whose activities have been closed due to the coronavirus crisis.

Credit line. The Government will formalize a line of credit of €1,000M to improve the liquidity of the companies.

Moratorium on taxes. Moratorium on the payment deadlines for all the taxes controlled by the Government of Catalonia until the end of the alarm status. It also includes a moratorium on the payment of the tourist stay tax until September.

Water utility bills. Temporary reduction of the water bills to bring liquidity to families and businesses.

Government of Spain

These are some of the measures taken by the Government of Spain:

Line of guarantees and public guarantees. To ensure liquidity for companies and the self-employed, a first section of the guarantee line has been approved to avoid restricting credit.

Exporting companies. Approval of an additional €2 billion guarantee line for exporting companies with fast-track mechanisms, especially favoring small and medium-sized businesses.

Protection of employment and vulnerable groups. Some of these initiatives are as follows: adapting the working day to meet conciliation needs; establishment of teleworking; temporary workforce adjustments through the flexibility of Temporary Employment Regulation Plan (ERTO) or increased facilities for the self-employed to collect benefits, among others.

Taxes. Flexible deferral of payment of taxes over a period of six months.

Financing. Specific line of financing through the Official Credit Institute for 400 million euros.

Repayment of loans. Deferral of the repayment of loans granted by the General Secretariat of Industry and Small and Medium-Sized Enterprises.

Social Security bonuses. Extension of Social Security bonuses for discontinuous fixed contracts in the tourism, trade and hospitality sectors linked to tourism activity.

Innovation. The Ministry of Science has launched a plan of extraordinary measures for the innovation of companies with the aim of alleviating the slowdown in activity and protecting employment in the field of R&D.

European Union

These are some of the main measures at a European Union level:

Deficit limit. The EU has activated the safeguard clause and suspended the deficit limits so that Member States could increase their public spending.

New package of fiscal measures. The EU is looking at options such as using the European rescue fund, offer liquidity to cover health expenses or the issuance of "corona bonds".

Transportation. Deployment of emergency measures to protect freight traffic, secure supplies and mitigate the impact of coronavirus on the transport sector.

Companies. €25,000 million to support the health sector, SMEs, the labor market and support the most vulnerable sectors. The EU will also help companies obtain liquidity by subsidizing interest rates.

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