The Government succeeds in easing the burdens of hospitality and commerce.
The main reason for the greater damage that the Spanish economy has suffered as a result of restrictions on people’s physical mobility is the high relative proportion that the tourism and hospitality sector occupies in GDP.
In the latter, micro-enterprises and the self-employed are dominant in a very large business census. This means that its defensive capacity against decreases in demand is limited.
Direct financial support such as those that have been arbitrated since the beginning of the pandemic have alleviated the difficulties, but their validity is necessarily limited and, in any case, they are not enough to fully assimilate the fixed costs of the companies, in many cases higher to sales revenue.
With an endowment of 4,220 million euros, the Plan to reinforce the hospitality, tourism and commerce sector is aimed primarily at the Horeca sector: hotels, restaurants and cafeterias.
The destination is those chapters of fixed costs that weigh more in the accounts of these companies: reductions in leases, work facilities, tax reductions and in Social Security contributions and financing support.
The conditions of access to these advantages are subject to the eventual existence of agreements between the contract holders and the size of the companies or their capacity to meet those commitments.
The insufficiency criterion has been extended to financial facilities, extending the grace periods or postponing the payment of the debt service. The opening of a new tranche of ICO guarantees is significant. This ICO support to the hospitality sector extends to travel agencies, tour operators and reservation services.
Of these aids, both those directly specified in the extension of ERTEs and the postponement of payment of taxes or Social Security contributions affect a significant number of companies. It is one of the necessary conditions for these supports to be effective.
The convenience of this budgetary effort should also be supported by the need for strict selection and supervision mechanisms that guarantee the proper use of these resources. Given the initial less favorable situation of Spanish public finances, Spain’s budgetary support aimed at offsetting the drop in economic activity caused by the pandemic was among the lowest in Europe.