Tue. Oct 4th, 2022

The Government is preparing a battery of measures to mitigate the wave of business insolvencies that may arrive from spring, according to the Bank of Spain, the European institutions and even Mario Draghi , former head of the European Central Bank and one of the figures of the last crisis.

Part of the Executive demands more ambition: Podemos pressures the Economy to activate a plan of direct aid to companies, especially to the most affected sectors, and several Socialist ministers admit that Spain has traveled on that flank.

The Treasury has just reduced by 10 billiondebt issuances in 2021. “The economy needs a bonus because the next semester is going to be bad; the ideal would be to use those 10,000 million ”, says the head of the Podemos Economy, Nacho Álvarez. Economy sources maintain that that specific figure has never been transferred to the vice president. But the debate is there.

The minority partner of the Government coalition is in favor of reinforcing direct aid “from now on”, particularly for the hospitality sector. And that debate has been on the table of the Council of Ministers for some time, with two different sides: those who believe that 2021 is going to be a year of strong recovery and point out that Spain has already done enough on the fiscal side,and the ministers who see the recovery still a long way off and, therefore, aspire to reinforce the stimuli foreseen in the Budget in the face of a more difficult semester than expected, in which neither vaccines nor European funds – the two great engines of reactivation – will still take effect.

Economy has several formulas on the table to address debt restructuring or figures such as participative loans, as EL PAÍS announced on Monday. But at least a part of the Council of Ministers is in favor of raising the ambition of this package one notch, with direct aid to companies, as other European partners have done, as the employers’ associations and the PP also request and as the Bank has requested. of Spain like the IMF.

This debate has been reproduced on several occasions within the Government, especially in the Delegate Committee for Economic Affairs. And it was very intense during the discussion of the hospitality plan, which was delayed several times among other things due to this dispute.

The Minister of Industry, Reyes Maroto, was one of those who most insisted on the need to approve direct aid, as other countries have done, especially Germany. Finally, they opted for an intermediate formula that last week achieved broad support in Congress.

The strongest reluctance comes from the economic vice-presidency and the Ministry of Finance, who insist that the most powerful help for companies is the temporary employment regulation files (ERTE), which imply that the State assumes wages, or the reduction of quotes.

The Executive also activated a package of 10,000 million months ago to enter the capital of strategic companies. But a part of the Government insists that more must be done, and they point to the additional 10,000 million coming from the reduction of public debt issues planned by the Treasury for this year.

There are no free meals, says an old adage in economics. And this is not the case either: it is about saving the next six months, until the contagion data improve and European funds begin to arrive, but at the cost of more deficits. We can point out, in line with organizations such as the IMF, that this is not the time to worry about the fiscal situation, but the party led by Pablo Iglesias is not alone in that claim.

Both the unions and the employers have issued repeated messages in this regard. And even on the socialist flank of the Council of Ministers the idea that Spain has done relatively little has taken hold.

La Moncloa supports Vice President Nadia Calviño: “The fiscal package has been powerful, it has supported companies and workers through ERTE and ICO, and it is Economy that has been in charge of matching the measures to the economic situation,” according to the sources consulted.

However, that debate is making its way into the Council of Ministers and the PSOE as it is verified that the slight recovery in the fourth quarter may give way to a few complicated months. Economy also maintains that the package of direct aid, in addition to the 10,000 million from the SEPI (State Society of Industrial Participations) for strategic companies, includes the ERTE, as well as the measures for the self-employed and those included in the hospitality plan.

Along with tax holidays, measures related to Social Security contributions and credit lines and ICO guarantees, The ministry maintains that the aid of the Spanish Government is in the high band of what has really been granted in Europe. But figures from the European Commission place Spain in the caboose in discretionary spending measures.

From the Executive sector that most rejects the idea of ​​direct aid, they clarify, in any case, that the evolution of the economy and especially the survival capacity of the business fabric are being analyzed at all times. The same sources point out that those 10,000 million are there in case they were necessary, because at the moment Spain is not having problems in its debt issues.

They also insist that the ERTE represent an enormous expense for the Executive, even greater than what some type of direct aid could imply, and they also argue the complexity of the autonomous state to justify its rejection. It is the autonomies that have the powers for these direct aid, and some are already injecting them.

In any case the debate is not closed. The harshness of the third wave has blown the forecasts into the air. And even the most resistant admit that these aids may be the only option in a few weeks.

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