Government to request extension of state of emergency until 10 May and approves 30 additional measures to support people and companies

Moncloa Palace, Madrid

The Council of Ministers agreed to request the ratification of the Lower House of Parliament to extend the state of emergency until midnight on 10 May decreed back on 14 March in order to manage the health crisis caused by COVID-19.

The Minister for the Treasury and Government Spokesperson, María Jesús Montero, specified that the proposal includes the request for children under the age of 14 to accompany an adult with whom they live to leave the house to engage in activities authorised under the state of emergency, such as going to the supermarket, the chemist's and banks.

The Ministry of Health and the Second Vice-Presidency of the Government and Ministry of Social Affairs will draw up a guide in the next few days that will specify the places, establishments and activities that children can visit or participate in and the preventive measures on hygiene and social distancing that they must adopt.

The government is aware that this measure only provides partial relief for the lockdown situation of children, claimed the Government Spokesperson, who stressed that we must "ensure that trips out by those on lockdown are controlled" to avoid a relapse in the achievements made to fight the pandemic.

Pool Moncloa/Borja Puig de la BellacasaMaría Jesús Montero added that this decision has been adopted following the recommendations of health experts and weighing up the risks and benefits in relation to the current situation of the disease. Most children, she explained, have remained in their homes these past five weeks, and hence "the possibility that they are affected or can transmit the virus is really low".

The Government Spokesperson clarified that the lockdown measures are not being relaxed and called for responsibility from adults to guarantee the safety of children and other citizens.

María Jesús Montero also insisted that in order to move towards any de-escalation, we need to bed down the achievements made. "Each step we take towards normality must be well thought out and calculated".

The figures on this pandemic, she said, "allow us a glimmer of hope" and lives are being saved, the expansion of the virus halted and the capacity of our health system to respond improved as each day goes by.

New measures to support the economy and employment

The Council of Ministers approved a Royal Decree-Law on Urgent Complementary Measures to Support the Economy and Employment, with employment, economic and tax measures of a horizontal nature and other specific measures to adapt legislation applicable to specific sectors, such as research.

The Third Vice-President of the Government and Minister for Economic Affairs and Digital Transformation, Nadia Calviño, stated that the government is using all the economic, financial and legal resources available to the State to provide a response to the situation caused by COVID-19, in order to "guarantee the channelling of productive resources, maintain business activity and employment, and support those people affected during this extraordinary period".

Support for workers

Pool Moncloa/Borja Puig de la BellacasaNadia Calviño explained that the measures adopted on Tuesday complement those approved during the state of emergency, thus providing a response to workers who have been left without cover. These include those whose trial employment contract ran out after 9 March and those who voluntarily rescinded their employment contract after 1 March because they had another binding job offer that did not come to fruition because of the pandemic. In both cases, the worker will be entitled to unemployment benefits.

In addition, protection for workers with permanent seasonal contracts will be stepped up, such that they may be subject to a Temporary Lay-off Plan (Spanish acronym: ERTE) or receive a benefit even after their unemployment benefit has run out.

For their part, essential sector companies may differentiate between those workers that carry out essential tasks and those that do not, in order to be entitled to invoke an ERTE.

The Royal Decree-Law also regulates the redemption of pension funds and extends for a further two months the preferential nature of working from home and the right to adapt the timetable and reduce the working day for those people with dependents in their charge due to the health crisis situation.

Financing for businesses

The minister highlighted, among the measures to support business financing, the extension of the guarantees for credit lines issued by the Official Credit Institute (Spanish acronym: ICO) in order to cover the financing system based on commercial paper in the alternative fixed-income market, in addition to the credit channelled through the banking system. "This thus encourages the maintenance of lines of business financing that takes place in the capital markets".

The Insurance Compensation Consortium will act to reinsure credit insurance risks, with the aim of offering greater security to all commercial transactions, and the Institute for Energy Diversification and Savings (Spanish acronym: IDAE) will allow the deferment of the payment of instalments on loans it has granted. The new mechanisms to renegotiate or defer the payment of rent on business premises, particularly on properties that belong to large real estate companies or public enterprises, was another aspect highlighted by Nadia Calviño.

Tax measures

The raft of tax measures is aimed at "aligning taxable bases to the real situation facing companies, above all SMEs and independent contractors", explained the minister. The target is to free up 1.1 billion euros to guarantee their liquidity. Independent contractors may calculate their personal income tax instalments and payments on account under the simplified VAT system under the objective estimate method to adjust payments to actual income.

For their part, companies may adapt the settlement of payments on account to forecast income estimated for 2020 and the possibility is established of subordinating the payment of tax owed under corporate income tax to obtain financing through ICO-backed credit lines.

The minister also referred to reducing the VAT applicable to health material supplies of national products to public institutions, not-for profits and hospitals to zero, which would lead to a saving of more than 1 billion euros and guarantee equal treatment for national products and imported goods. As regards the VAT on electronic books, magazines and newspapers, this will be brought in line with the rates for the paper versions of these products.

Specific sectors

Research, State port activity and sport are all beneficiary sectors of measures aimed to alleviate their financial situation and make rules more flexible in the current period.

The minister quoted, among other measures, the deferral and re-financing of State loans granted to science and technology parks; the novation of loan agreements entered into with universities, and the extension of pre-doctoral contracts subscribed by institutions that form part of the Spanish System of Science, Technology and Research.

Nadia Calviño also announced the creation of a foundation attached to the National Sports Council, with a provision of funds from the sale of audio-visual rights designed to contribute to financing and providing stability to federation, Olympic and Paralympic sport in the run up to the Tokyo Olympic Games, which will be held in 2021. This Council will be made up of the Spanish Royal Football Federation, the Professional Football League and representatives from the remaining Spanish sports federations, as well as of official and unofficial competitions.

Economic and social reconstruction

Pool Moncloa/Borja Puig de la BellacasaDuring her press briefing, María Jesús Montero thanked the political formations, regional governments, local authorities and social stakeholders, business owners and trade unions that the President of the Government met with, for their interest in working on the socio-economic reconstruction of Spain.

The government's aim, stressed María Jesús Montero, is to harmonise the work of all of them, who are making their own contributions simultaneously and in parallel.

In this regard, the Government Spokesperson recalled that the Lower House of Parliament will set the day and the time, and will determine the format of the parliamentary committee on reconstruction, which the government will attend with four main priorities: strengthening the health system; support for companies, independent contractors and the social economy; protection for the most vulnerable groups and a common position in negotiations with the European Union.

The Government Spokesperson announced that Pedro Sánchez has called the social dialogue board to meet next Thursday, which includes the business organisations and trade unions. "Their participation is necessary if we want to see a genuine recovery".

Non official translation