By Beln Carreo and Inti Landauro
MADRID (Reuters) – Spain’s government was preparing new measures on Tuesday to help households and exempt small firms from social security payments after business leaders bristled at a tightening of the coronavirus lockdown in Europe’s second worst-hit country.
The death toll hit 8,189 after 849 fatalities were reported overnight, while confirmed cases of the virus rose by about 11% to 94,417. In percentage terms, however, the pace of increases in both contagion and deaths has slowed somewhat in the past few days, health officials said.
Health emergency chief Fernando Simon, who tested positive for the virus on Monday, said in a video news conference Spain was unlikely to need further restrictive measures, besides those already announced, while that data was being analyzed.
Spain has already surpassed China, where the disease originated in late 2019, in the number of deaths and infections and has the world’s second-highest death toll after Italy.
A government source told Reuters that as part of a 700 million-euro aid package likely to be approved during Tuesday’s cabinet meeting, the government wants to suspend evictions of vulnerable households for the six months after the state of emergency is lifted.
This would cover the unemployed, workers who have been temporarily laid off or had their hours cut, and self-employed people on low earnings. Previous aid packages, such as a moratorium on mortgage payments, had stricter criteria to qualify.
Investment funds and other large landlords would have to accept a 50% loss on debt incurred by their tenants, or restructure that debt within two to three years. Rental contracts expiring in the next six months would automatically be renewed for a further six months.
The government is also studying a six-month holiday on social security payments for small businesses and the self-employed.
Health officials on Monday said Spain’s lockdown measures – among the strictest in Europe – have begun to take effect, with the daily infection increase slowing.
However, business leaders criticized the recent tightening of the restrictions, which prevent non-essential workers from leaving their homes, and complained that a lack of consultation with the private sector left companies unprepared.
“Spain is a country where 95% of companies are tiny, with just one or two workers. They can’t stay stuck at home, they need to get out and work,” deputy chief of business group CEOE Inigo Fernandez de Mesa told Reuters.
Data released on Tuesday showed a slight fall in Spain’s overall indebtedness in the third quarter, while employment increased by 2%.
But those improvements are set to be short-lived, as Prime Minister Pedro Sanchez expects the fallout from coronavirus to tip the economy into recession in 2020.
Meanwhile, Foreign Minister Arancha Gonzalez proposed raising the European Union’s budget to better handle the economic fallout from the pandemic.
(Reporting by Inti Landauro, Beln Carreo, Clara-Laeila Laudette; Writing by Nathan Allen; Editing by Andrei Khalip and Giles Elgood)
