Government To Bail Out Hotels And Restaurant Sector
The Spanish Deputy Prime Minister, Nadia Calviño, has indicated that the government will start to provide direct financial assistance to struggling companies.
The minister who is also heads the department of Economic Affairs has singled out the hotel and catering industry which is still in dire straits due to the freeze on international travel and regional restrictions in place to combat the spread of the coronavirus.
The sector ended 2020 with losses of 70 billion euros representing a drop of over 50% on 2019.
In addition some 85,000 bars and restaurants have closed and a further 100,000 at risk with the loss of 300,000 jobs.
The government´s job furlough scheme is set to end at the end of May which could lead to further losses of the already 360,000 workers who have been temporarily laid off.
The likely relief will include a mix of direct aid in the form of grants, guarantees as well as loans distributed at the state and regional level in coordination with the Bank of Spain to the tune of around 8 billion Euros.
According an EFE news agency report, Calviño highlighted that after the “effectiveness” of the Official Credit Institute (ICO) company lending schemes, measures in which public-private collaboration “has been absolutely key,” “it is clear that in this new phase it is essential that banks continue to be part of the solution.”
The European Commision´s Economic Forecast for 2021 expects a strong rebound but warned of the risk of an increase in company insolvencies in Spain, particularly in those sectors such as tourism and travel that have been most affected by the pandemic.
