216 million euro loan line to cover the Digital Transformation of Tourism Companies and self-employed workers affected by the crisis.

216 million euro loan line to cover the Digital Transformation of Tourism Companies and self-employed workers affected by the crisis.

24-06-2020Josep Bagur Gomila

The Royal Decree-Law for Urgent Measures to Support Economic Recovery and Employment, which includes initiatives worth more than 51 billion euros, comes into force on Tuesday, July 7, following its publication in the Official State Gazette, or BOE on Monday.

In an explanatory memorandum for the rule, the Government points out that following the end of the State of Emergency and the lifting of activity and mobility restrictions, a second phase of economic and social measures has been launched to promote reactivation.

The difficulties facing the economy and business call for a “concentration of efforts, supporting with public funds the reactivation in the second half of 2020, to support job creation and investment and achieve robust and sustainable growth in the period 2021-2022,” it states.

The Royal Decree-Law approves a set of measures to support the Productive Sector, Employment and Income, which involves the immediate mobilisation of more than 51 billion euros of public money.

In terms of Solvency and Investment support, financial measures are being extended and adapted through the approval of a new 40 billion euro ICO guarantee line aimed at financing productive investments.

The specific characteristics of the line of guarantees, percentage of coverage and distribution by tranches will be approved by the Council of Ministers in the coming weeks and succeeds the first guarantee line of 100 billion euros approved by the Government on March 17, to address liquidity problems.

The Strategic Business Solvency Support Fund, managed by the Sociedad Estatal de Participaciones Industriales, or SEPI, of 10 billion euros is created to provide financial support for solvent strategic non-financial companies that have been particularly affected by Covid-19.

The fund will be articulated through the granting of participatory loans, the acquisition of subordinated debt or the subscription of shares or other equity. The amount of dividends, interest and capital gains resulting from the investments made will be paid into the Public Treasury.

Requests will be resolved within a maximum period of one month and the strategic companies will be exempt from paying State, Regional and Local Taxes, as well as the State having make a public takeover bid in case of having to enter the share capital of these strategic companies, which will be considered as such for various reasons, such as their social and economic impact, relevance to security, people's health, infrastructure, communications or contribution to the proper functioning of the markets.

In view of the economic impact of the coronavirus health crisis, the term of suspension of the partners' right of separation is also extended, only in the event of separation due to lack of dividends, as established in the Article 348 bis.1 and 4 of the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2.

The retention of the dividend will be allowed so that companies can face the economic recovery with reinforced solvency. The suspension of the right of separation is extended until December 31, 2020.

In order to reinforce support for the internationalisation of companies, in a more complex International context, access to the extraordinary line of public guarantees of the Spanish Export Credit Insurance Company is extended to listed companies, or Cesce.

The reinforcement of the Foreign Investment Fund, or FIEX, managed by Cofides, is moving in the same direction, increasing the endowment of the fund from 10 to 100 million euros.

In the Automotive Sector, precise bases are established for the granting of aid for the implementation of the 'Renove' program to support the renewal of the fleet, presented on June 15 by the Government in the amount of 250 million euros.

Aid from the "Renove 2020" plan will be granted directly and can range from 300 to 4,000 euros, depending on the type of vehicle and the beneficiary. There may be an additional 500 euros in the event of scrapping a vehicle over 20 years old, if beneficiaries have reduced mobility or belong to households with a monthly income of less than 1,500 euros.

Vehicle acquisitions made from June 16, 2020 are eligible for aid from the 'Renove 2020' plan. The program will end on December 31, 2020 or when the credit line is exhausted.

The Government estimates that this plan will have an economic impact for Spain of 1,104 million euros along the entire value chain and associated services and will help maintain 7,400 jobs in the Sector.

The Royal Decree-Law also includes provisions for the implementation of Tourism Sector Support Plans.

First, it provides the adoption of a measure aimed at ensuring the protection of mortgage debtors whose property is affected by Hotel activity, Tourist Accommodation and Travel Agencies, through the granting of a moratorium period of up to 12 months for financial transactions entered into between the said mortgage debtors and credit institutions.

Secondly, it includes the creation of plans at Tourist destinations to promote sustainability and establish provisions for the Digital Transformation of Tourism Companies that have been affected by this health crisis.

The Secretary of State for Tourism is planning to implement a 216 million euro loan line to cover the Digital Transformation of Tourism Companies and self-employed workers affected by the crisis.

The plan is to grant a maximum of 1,100 loans for each budget year, based on an average loan of 200,000 euros.

Finally, for discontinuous permanent workers in the Tourism Sector, there are provisions for the extension of bonuses and their compatibility with exemptions from Social Security contributions.

The Royal Decree-Law also includes a provision to strengthen R & D & I mechanisms, through the establishment of rules to arbitrate mechanisms for public-private collaboration in health projects related to coronavirus.

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