ERTE is of special importance in the Balearics because of the impact of the crisis on tourism.

26-06-2020Gemma Andreu

Business organisations and the regional government have welcomed the agreement to extend ERTE to the end of September, but have also expressed concerns about the length of the extension and the gradual reductions in social security bonuses.

There had been a hope that the extension would be until the end of the year, but it had become increasingly clear that this was not the focus of the Spanish government, which had wanted to secure agreement for three months but has left the door open to arrangements for the final quarter of the year.

As was said in Madrid after the agreement was reached between the government, the main employers' confederations and the two biggest unions, work will continue in addressing what happens after September. The employment minister, Yolanda Díaz, had previously explained that the government was prepared to take a "long view" on ERTE.

Carmen Planas, president of the Confederation of Balearic Business Associations, voiced her support for the extension, but added that it was "not one we consider to be the most adequate to protect business and jobs in the Balearics". However, the proposals that the employment ministry had brought to the table on Thursday represented "significant advances compared with the previous". Planas stated, as had the Spanish business confederations, that efforts will be made in negotiating the best conditions for ERTE beyond September.

The Balearic minister for the economic model, tourism and employment, Iago Negueruela, who earlier in the week had said that he was confident that there would be extension to end-December, described the announcement on Thursday as "good news that will undoubtedly help to further protect workers and the whole of the islands' productive fabric". It is an agreement that is "positive, but we must continue to insist on greater protection for workers and companies in the Balearic Islands".

The president of the Pimem federation of small to medium-sized businesses, Jordi Mora, also said that the agreement was positive, but he voiced his concern about the progressive decreases in social security bonuses. "These are particularly damaging to small and medium-sized businesses, as these businesses will be discouraged. This could lead to the disappearance of many companies because they are unable to cope with fixed and labour costs due to having no income."

There is also a view that, for example, businesses in the transport and car-rental sectors, as well as in tourism, could choose to exit ERTE arrangements from the start of July. This would leave workers with no coverage.

There are currently some 150,000 workers in the Balearics who are covered by ERTE.

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