Spain unveils aid package for families, businesses hit by virus

Spain offered more help to households and small companies on Tuesday to try to calm fears about the country’s mothballed economy and to shield the population from losing homes during the coronavirus lockdown.

Infections and deaths from the virus are still rising, but health officials said the pace had slowed in the past few days. Confirmed cases rose by about 11 percent to 94,417, and the death toll hit 8,189 after 849 fatalities were reported overnight.

Gravediggers at Madrid’s Almudena cemetery wore protective visors or face masks during a funeral as three people paid their last respects, standing metres apart under pouring rain, Reuters footage showed. In Barcelona, an indoor athletics track has been transformed into a makeshift hospital.

Health emergency chief Fernando Simon, who tested positive for the virus on Monday, said Spain was unlikely to need further restrictive measures, besides those already announced, while data was being analysed.

Spain has already overtaken China in the number of coronavirus deaths and infections, and has the world’s second-highest death toll after Italy.

The government approved a 700 million-euro ($771m) aid package, including a measure to suspend evictions of vulnerable households for six months after the state of emergency is lifted.

This will cover the unemployed, workers who have been temporarily laid off or lost hours, self-employed people with low earnings, people who have lost short-term contracts and domestic workers who have had to stay at home.

A moratorium on mortgage payments was extended to include the self-employed.

Investment funds and other large landlords will have to accept a 50 percent loss on debt incurred by tenants, or restructure it. Some rental contracts will be automatically renewed.

Deputy Prime Minister Pablo Iglesias invoked Spaniards’ constitutional right to housing, describing it as “the trench from which people resist the virus”.

The government also declared a six-month holiday on social security payments for small businesses and the self-employed, and barred water and power utilities from cutting off clients over unpaid bills.

Avoid losing capacity

A slowing daily infection rate suggested some of Europe’s strictest lockdown measures, which confine non-essential workers almost entirely to their homes, have begun to take effect, health officials have said.

“The measures are to reduce the movement of people, not economic activity,” Minister of Economy and Business Nadia Calvino told a news briefing after a cabinet meeting to approve the measures. She said the aim was to “minimise the movement of workers to its most basic level without losing production capacity”.

But business leaders have been critical of the latest tightening of restrictions and have complained that a lack of consultation meant many companies were unprepared.

“Spain is a country where 95 percent of companies are tiny, with just one or two workers. They can’t stay stuck at home, they need to get out and work,” Inigo Fernandez de Mesa, the deputy chief of the Spanish Confederation of Business Organizations (CEOE), told Reuters.

At the other end of Spain’s business spectrum, the foundation of Amancio Ortega – the owner of Zara parent company Inditex and one of Europe’s richest people – said it had bought 63 million euros ($69m) worth of supplies including ventilators, masks and test kits.

Government data released on Tuesday showed a slight fall in Spain’s overall indebtedness and a two percent rise in employment.

But those improvements are set to be short-lived, as the government now expects a recession in 2020.