Pedro Sánchez announces a first package of measures worth 10.6 billion euros to help households, companies and local councils affected by the DANA (Isolated Upper-level Depression)

Moncloa Palace, Madrid

The President of the Government of Spain, Pedro Sánchez, during his speech to report on the decisions taken by the Council of Ministers regarding those affected by the DANA (Pool Moncloa/Borja Puig de la Bellacasa)

The President of the Government of Spain, Pedro Sánchez, has announced that the Council of Ministers has today approved a first package of measures amounting to 10.6 billion euros, aimed at helping households, companies, the self-employed and local councils in the 78 Valencian, Castilian-La Mancha and Andalusian municipalities hit by the DANA. This list may be extended to other municipalities and autonomous communities, depending on needs.

The measures include direct aid to citizens and companies, tax moratoriums and exemptions, social security measures, lines of guarantees, ICO credits and aid to local administrations, among others.

Pedro Sánchez explained that these measures, "concrete and realistic, which come into force now" are "a good first step," but not the last, because they represent the beginning of an "Immediate response, reconstruction and relaunch plan for the Valencia Region," which is the region most affected by this tragedy, and which will consist of three phases: the first, which is the immediate response; the second, the reconstruction of the affected areas, and finally, a third, which is the relaunch phase and, therefore, the necessary transformation to adapt the territory to the climatic emergency. A Plan which, as the head of the Executive announced, "will last as long as necessary to restore normality to the Valencian territory".

In this respect, he said that in the next few days the Government will approve new, more sectoral measures for workers, companies, the sectors that have been most affected - such as agriculture, industry and tourism - and public administrations. "There is a lot of work ahead. And we will be with our people until the end. With all the means, for as long as necessary," Pedro Sánchez remarked at a press conference at Moncloa Palace, in which he insisted that the Government's priorities are "saving lives, locating and identifying the dead, rebuilding the damaged homes, streets and infrastructure and restoring normality." "These are our priorities. We will not deviate," he said.

Direct aid to affected citizens and companies

Pedro Sánchez went on to outline the content of the first package of measures aimed at helping households, companies and local councils, which will be activated "with as little paperwork and as quickly and streamlined as possible."

With the Royal Decree-Law on urgent measures to alleviate the damage caused by the DANA, approved today by the Council of Ministers, the public aid provided for in Royal Decree 307, which regulates subsidies for needs arising from emergency or catastrophic situations, will be quadrupled and will become universal, so that it can reach all affected households regardless of income thresholds. Specifically, the State will transfer up to 72,000 euros for cases of disability; between 20,000 and 60,000 euros for the repair of damaged homes; up to 10,300 euros to replace or repair furniture, electrical appliances and household goods; and up to 37,000 euros to repair elements of neighbourhood communities, such as doorways or lifts.

In addition, direct aid for SMEs and the self-employed with tax address in the areas affected by the DANA will be transferred for a total amount of 838 million euros. These grants will amount to 5,000 euros for the self-employed and will range from 10,000 to 150,000 euros for companies, depending on their volume of operations. To receive it, all is needed is providing a bank account number and it will start to be paid out in less than a month, with an estimated 65,000 self-employed workers and some 30,000 companies as beneficiaries.

The President of the Government of Spain, Pedro Sánchez, during his appearance after the Council of Ministers | Pool Moncloa/Borja Puig de la Bellacasa

Extraordinary temporary disability, severance pay and 15% increase in the Minimum Salary and non-contributory pensions

At the same time, an extraordinary temporary disability is created for workers and self-employed people with physical or psychological damage due to the DANA, who will be guaranteed 75% of their salary from the first day of disability. Disability, widow's, widower's and orphan's pensions caused by DANA will also be assimilated to occupational accidents and will therefore be increased and their conditions improved by being calculated on the basis of the total income of the last year.

The self-employed who have been affected have also been given the possibility of applying for a severance benefit corresponding to 70% of their contribution base, even if they have not completed the minimum 12 months required by law to qualify for this benefit.

In addition, people who already receive the minimum basic income or non-contributory pension will see it increase by 15% over the next 3 months. There is also the possibility of extending this measure for a longer period, depending on the progress of the situation.

Insurance Compensation Consortium: Compensation for families and companies

For its part, the Insurance Compensation Consortium, which is part of the Ministry of Economy, Trade and Enterprise, will begin to make the first compensation payments tomorrow to families and companies that have lost their vehicles. This compensation will be 20% higher than the appraised value of each vehicle and is estimated to reach the unprecedented figure of 3.5 billion euros. "We are aware that, for many families and SMEs, having a car is essential to regain normality, which is why the teams have been working against the clock to start transferring these items in a record time of seven days," said Pedro Sánchez.

Five billion euros DANA Guarantee Facility

To complement this support, the Council of Ministers has approved the creation of a 5 billion euro DANA Guarantee Facility. This new line of guarantees will be managed by the Official Credit Institute (ICO) and will allow SMEs, companies, the self-employed and, this time, households, to access loans through their bank with the guarantee of the Government and under very favourable conditions. These are "loans to re-equip their companies, open their businesses, or repair their homes as soon as possible," explained Pedro Sánchez, who pointed out that it normally takes between 2 and 3 months to set up this kind of mechanism, although the Government is working with financial institutions so that the loans can be requested as of next week. Today a first tranche of 1 billion euros has been approved, and in the next few days the rest will be approved until reaching 5 billion euros, an amount similar to that required by companies throughout the province of Valencia during the crisis caused by COVID-19, he said.

Package of tax holidays and exemptions

In addition to direct aid and ICO credits, the Council of Ministers has approved a comprehensive package of tax holidays and tax exemptions. Citizens in the affected areas will be able to postpone the second payment of their 2023 income tax return to 2025 - affecting some 200,000 taxpayers in the province of

Valencia - as well as any other taxes they may have pending with the Tax Agency. In addition, exemptions and reductions are granted in the Real Estate Tax (IBI) or Business Tax (IAE) for 2024 for properties damaged as a direct result of the DANA. They will also not have to pay fees for the processing of vehicle deregistrations with the Traffic Department, or for the issuing of official documents that have been lost. A reduction in the net yield rates for agricultural activities is also envisaged for 2024 for the objective assessment method (modules) of personal income tax and the special simplified VAT system, in relation to agricultural holdings and activities carried out in the area concerned.

In addition, and based on the labour reform approved during the last legislature, the affected companies that temporarily suspend the activity of their workers through an ERTE will be exempt from paying 100% of their workers' Social Security contributions, at least until February 2025, in order to alleviate the lack of income and favour the maintenance of employment and the productive fabric. In addition to this 'zero cost' of contributions to companies and workers affected by ERTE, this period will also be considered as fully contributed for future benefits. Similarly, the "social shield" against the DANA includes deferrals and moratoriums for companies in the area that are not directly affected and facilities will be provided for Social Security payments, with the suspension and extension of deadlines.

Thanks to the agreement reached with the banks, citizens and SMEs with a mortgage or consumer loan will be able to postpone full repayment of their loans for three months and pay only interest for an additional nine months. By way of example, he pointed out that citizens affected by the DANA with an average mortgage of 120,000 euros with a monthly payment of 600 euros will not pay for three months and, for the following nine months, they will pay 300 euros. It is estimated that this one-year total relief could benefit some 30,000 businesses and thousands of households. "It will help us to protect the local productive fabric until the situation improves, as it did during Covid," Pedro Sánchez emphasised.

Reinforcement of financial and human resources of the local administrations concerned.

This Tuesday, the Council of Ministers also approved the agreement declaring the territory affected by the storm to be an "Area seriously affected by a civil protection emergency," which will apply to the Valencian Community, Castilla-La Mancha, Andalusia, the Balearic Islands, Catalonia and Aragon, including a series of measures to reinforce the financial and human resources of the affected local administrations. "We want the local councils to be able to provide the best possible service to citizens in these difficult circumstances and to be able to start reconstruction work as soon as possible," he added.

Specifically, the Government of Spain will pay 100% of the emergency expenses incurred by the local councils affected by the DANA. Funding all actions related to the removal of mud, debris and unusable goods, the supply of drinking water, the cleaning of streets, and the accommodation and maintenance of affected neighbours. In addition, the State will pay up to 50% of all the works that have to be carried out in the coming months and years to repair infrastructures, facilities and services such as roads, sports centres, or civic and cultural centres in order to "restore normality and everyday life." The municipal taxes that will be foregone during this crisis will also be compensated for and spending possibilities with financially sustainable investments will be expanded.

At the same time, the courts and the teams of notaries and land registrars will be reinforced and a Registry Emergency Portal will be set up so that, via satellite, citizens can certify the location of their real estate as easily and quickly as possible. In addition, reinforcement offices will be opened in the affected municipalities to support local officials in assisting citizens and speeding up bureaucratic procedures. "Local administrations are there, they know better than anyone else the needs and realities of their towns. They are doing an extraordinary and commendable job, and what the Government and the whole of Spain must do is support them, giving them all the economic, human and technical resources they need to overcome this terrible tragedy," added Pedro Sánchez.

Interministerial Commission and reinforced cooperation with regional governments

The president of the Government of Spain also announced the creation of an inter-ministerial commission to coordinate reconstruction work among all relevant ministries and to open channels of dialogue with the private sector, trade unions and civil society. At the same time, a series of mechanisms have been adopted to strengthen bilateral cooperation with the regional governments concerned and, in particular, the government of the Generalitat Valenciana.

Application for the European Solidarity Fund

Finally, the European Commission has been asked for aid from the European Solidarity Fund and the Council and the European Parliament have been asked to approve, as a matter of urgency, a new regulation called RESTORE, which will allow us to reschedule ERDF and ESF+ cohesion funds to devote part of these resources to mitigating the damage caused by natural disasters. "Spain has always been a constructive country that has helped the European Union when necessary, and now it is time for the European Union to help us," he added.

More than 15,300 troops deployed in the area

As for action closer to the ground, the president explained that, "from the very first moment, the Government of Spain has been working in four priority areas: saving lives, recovering the bodies of the dead with the speed and dignity they deserve, guaranteeing security in the streets, and re-establishing supplies and services in the affected areas;" all areas in which, in the last 72 hours, "significant progress has been made." He pointed out that "the number of military, national police and members of the Guardia Civil deployed in the province of Valencia has increased from 7,300 to 14,898. They have been reinforced by 287 forest brigadiers, a hundred customs agents, 44 forensic doctors, 600 vehicles, and specialised machinery for pumping, cleaning and supply."

With all this human and technical deployment," he added, "we have carried out 1,300 new rescues, assisted the authorities and the local population in tasks such as the removal of vehicles, debris and the inspection of garages; and we have distributed 95,000 litres of bottled water and 18,500 food rations." In addition, 98% of affected households have had their electricity supply restored, and 68% of damaged telephone lines have been restored. Forty kilometres of roads have been repaired - including the rehabilitation of all lanes of the A-7 and the A-3 north - as well as 74 kilometres of railways, in addition to the activation of the medium and long-distance service between Valencia and Castellón, Tarragona, Teruel and Barcelona.

Working until normality returns to all battered homes

"We know, in any case, that this is not enough, that there are still missing people to be found, homes and businesses destroyed, buried under the mud, and many people suffering severe shortages," Pedro Sánchez emphasised. "And that is why we have to continue working, without distractions, with more means, more coordination and more effort, until normality has returned to all the municipalities and to all the homes hit by this tragedy: This is the commitment of the Government of Spain".

Referring to the local administrations, the head of the Executive pointed out that "they are doing an extraordinary and commendable job" and added that "what the Government and society as a whole want is to support these mayors, giving them all the economic and technical means they need to overcome this terrible tragedy." "We live in a decentralised, composite country, in which competences and resources are distributed among different public administrations ranging from Brussels to the smallest of the municipalities affected by this DANA, passing - logically - through the Central Government, the regional governments, and the provincial councils. We are all the State, from the Government of Spain to the last of the local councils, and that is why we have to work hand in hand. If we want to accelerate relief and recovery, we have to use all these resources, in as coordinated a way as possible.

In this sense, and in response to questions from the media about the possibility of the Government taking control of the situation, the president stated that at a time of crisis in which "there is no minute to lose," to enter into a situation of replacing the territorial administration, in this case the Generalitat Valenciana, "would be to reduce the effectiveness of the action and response of the public authorities." Pedro Sánchez has appealed, in any case, for unity and cooperation between all the administrations, because that is what the citizens demand, but also for reasons of efficiency, institutional respect and responsibility.

Non official translation