Labor Minister Yolanda Díaz called on Thursday to avoid “added uncertainties” to the inevitable ones linked to the coronavirus pandemic. Díaz has assured, “from prudence”, that workers, companies and Spanish society “should not be afraid” about the maintenance of ERTE “in case the tool is necessary ex post“that is, past the validity period agreed to date, September 30. “I want to send a message of tranquility,” said the minister, who has maintained that “it would not be prudent that, after such a large public investment effort by all,” the government would drop the ERTE system while it was gone. necessary.
These are the reforms that the EU requests from Spain in exchange for the 140,000 million of the recovery fund
The Minister’s call for “tranquility” and “common sense” was produced in the presentation of the Report on the socioeconomic and labor situation in Spain 2019 of the Economic and Social Council (CES) this Thursday, in which the head of Labor as well as the Governor of the Bank of Spain, Pablo Hernández de Cos. The head of the regulatory body has singled out the tourism sector in particular as one of the most affected by the coronavirus crisis and whose companies still continue to benefit from the ERTE, although they are not ‘dehibiting’ their staff if it is happening with other sectors of activity. .
The Minister of Labor has reported that “just one million” workers are currently in ERTE, compared to the maximum reached at the end of April of 3.4 million people, and agreed with Hernández de Cos that some sectors ” they are having a hard time “today, like tourism, but also” socio-community services “and” the cultural sectors, “added Díaz. The head of Labor stressed that these activities that are not yet recovering “require attention” and “a small surgery” to agree on the supports that are necessary after the deadlines agreed for the ERTE.
“We must continue with it”, Yolanda Díaz has promised, reminding that the agreement to extend the ERTE until September kept the tripartite commission of the Government, employers and unions to follow up on the files and determine in which cases it may be necessary to extend them beyond the end of the summer.
The Governor of the Bank of Spain has recommended maintaining the measures of public guarantees to companies and ERTEs to strengthen the economic recovery after the disaster caused by the pandemic. In the case of ERTEs, Hernández de Cos has defended that this stage of crisis is more complex than the previous one, in the hardest moments of the fall of the economy, because it requires more refinement to decide which ERTE to maintain. The economist has argued that it is time to let the market act as well, so that the necessary “structural adjustments” take place and do not continue to support “companies zombies“that they will not survive this crisis and public efforts would only delay closings or layoffs.
Reforms to reduce temporary employment and unemployment
Pablo Hernández de Cos has claimed that, after the measures to stop the economic damage of the pandemic and those aimed at reviving the activity, Spain must tackle several “reforms of structural challenges”, which were pending before the coronavirus and which “are clearly much more urgent. ” Among them, the Governor of the Bank of Spain has mentioned the need for reforms to reduce the high temporality in the labor market, as well as the high unemployment rates, which not only generate less growth in the Spanish economy but “are also origin of inequality, “he said.
Yolanda Díaz has announced that this Thursday the Labor social dialogue table met for the first time with the social agents to improve unemployment benefits, which will address the protection of workers who finished their unemployment benefit or subsidy during the state of alarm and that they have not had the opportunity to find employment due to the current crisis, the minister said. “It will also try to move forward so that workers who have several part-time contracts receive benefits comparable to those of workers who do not suffer this partiality,” reported Labor for her part in a press release.
In the opinion of the head of the Spanish side, the government should undertake reforms also to “increase productivity”, which also weighs down economic growth, to advance the ecological transition and to face the aging of the population, “a risk for the welfare system. ”
“Tax boost” of the European fund
The Governor of the Bank of Spain has also assessed as “very satisfactory” the European agreement on the reconstruction fund of 750,000 million euros and has asked to convert those European funds into a “fiscal boost” that accompanies the effort to recover the productive fabric, with the support of public investment projects in innovation, in technological capital, in continuing education and training, as well as contributing to the transition towards a more sustainable economy, in line with the conditions established by the EU.
Hernández de Cos has maintained, however, that despite the good news of the arrival of these European funds for the coming years, the financing needs for the crisis will be “much greater” than what this item will cover. For this reason, the economist has stressed that it would be convenient to start working on fiscal consolidation, which in his opinion will be necessary in the medium term, which will increase tax collection in Spain and not make the country so dependent, with debt and deficit levels. very high. “We cannot afford the degree of vulnerability of high levels of debt and deficits, nor the little room for maneuver that they would leave to face possible future shocks, which there will be,” said the economist.