• Salud will not lift the restrictions in Ibiza for another 2 two weeks at the minimum.
  • To be considered for relaxation of restrictions the island must achieve an infection rate of under 200 and maintain it over a 15 day period.
  • Spanish Government announce 11 billion euro recovery fund for the hospitality sector.

At Least Two More Weeks For Ibiza

The Balearic Ministry of Health has scuppered any hopes of an early easing with an announcement that categorically rejects any possibility of lifting the current restrictions in Ibiza before March 16th.

The news came via an announcement by Patricia Gómez following a meeting with Island President Vicent Marí, and all five municipality Mayors.

In a separate press conference announcement Balearic President, Francina Armengol, said that the current restrictions and limitations of the reinforced phase four protocol in Ibiza will be maintained for at least two more weeks.

In practice this means that for a further 15 days the hospitality sector, all bars, cafes and restaurants, must remain closed aside from their take away and delivery services.

Gyms and large shops not deemed to sell essential goods will also remain closed.

The restriction on not meeting with people outside of your own home family bubble will remain in force as they are now.

After the announcement, both Ibiza President Marí and representatives of the hospitality sector demanded that the Ministry analyse the situation with a view to easing the restrictions within a week.

This came in the same week the Spanish Government announced an 11 billion euro recovery fund for the hospitality sector.

However, Gomez immediately ruled out any early lifting of restrictions. “We analyse the situation daily and on Fridays there is an extraordinary Government Council for this,” explained the minister, who stressed that in order to consider starting the de-escalation in Ibiza it would be necessary “to consolidate an incidence below 200 cases for fifteen days.”

The councillor went on to say that the current rate in Ibiza stands at 217 cases per one hundred thousand inhabitants.

Editor’s Comment:

Something that is causing a lot of confusion that is worth clarifying at this point: As the regulations and assessment procedures stand, a rate of under 200 has to be achieved and maintained for at least 15 days. In this respect it is a mistake to look at 15 days as a reasonable timescale for a possible lifting of restrictions. The count of 15 days doesn’t even begin until that rate is under 200, and currently we stand at 217. It is understandable that people want to grab onto positive news, some light at the end of the tunnel, but in balancing that with realism, any hope for relaxation of restrictions in 15 days is premature and will only lead to further disappointment.

That said, at Christmas the Government did relax regulations earlier than they had told us would be possible, nothing is certain at present. But as it stands we must consider 15 days as a technical though not practical earliest date of relaxation.

Back to the Councillor’s comments….

Councillor Gomez

Gómez indicated that, in the event that within fifteen days the measures can be relaxed, the de-escalation in Ibiza will be “slow” and, furthermore, if the figures rise again, a step backward will be taken and the restrictions will be adopted again immediately.

“We continue in a complex and difficult situation although, fortunately, the trend is of constant decline,” said the president of the Consell, who defended a withdrawal of prevention measures “prudent” to avoid a fourth wave. “I would like to give good news, but it is not possible,” said the councillor, who defended that the measures “are effective” and have served to reduce the “worrying” incidence and occupation figures of Can Misses that have been experienced in the last month and a half. The objective in these next two weeks in Ibiza is to “lower the incidence as much as possible” as well as the occupation of the Can Misses Hospital.

€11 Billion Support Package Announced by the Spanish Government for Hospitality and Tourism Sectors

As reported in El Pais

The measure is aimed at helping ‘companies, small and medium-sized enterprises and self-employed workers’ who have been hit by the economic fallout of the coronavirus crisis

Spanish Prime Minister Pedro Sánchez announced on Wednesday an 11-billion support package aimed at helping “companies, small and medium-sized enterprises [SMEs] and self-employed workers” in the tourism and hostelry sectors recover from the fallout of the coronavirus crisis.

“We do not just want to save businesses, but to strengthen them as well,” Sánchez told Spain’s lower house of parliament, the Congress of Deputies, on Wednesday. The prime minister said the package is aimed at improving the solvency of struggling companies “so that they can resume activity, make necessary investments and hire the staff required to fully begin the economic recovery.”

Spain’s tourism and hostelry sectors have been the hardest hit by the pandemic, with restrictions on travel and social gatherings leading to historic losses in revenue. Sánchez said the goal was to help these sectors that “were competitive before the pandemic” but are now “in a difficult situation.”

Economy Ministry Report

The announcement comes just a few weeks after an internal report from the Economy Ministry indicated that direct aid was needed to save companies, in particular small businesses, which have struggled to remain afloat due to the restrictions aimed at curbing the spread of the coronavirus. This has been a key demand of business leaders, unions and others who were dissatisfied with a recent relief package that focused on tax breaks, state-guaranteed loans and other forms of indirect support. Indeed, last week, a group of industry associations from the hostelry and business sectors, including the Spanish Business Confederation (CEC), called on Spanish authorities to provide 12.5 billion in direct aid. Pablo Casado, the leader of the conservative Popular Party (PP), went further, demanding 50 billion in direct aid from the government at Wednesday’s congressional session.

But despite these calls, it is not clear whether the new package will be in the form of direct aid or other economic support. The likelihood, however, is that the plan will be more geared toward strengthening the solvency of firms than providing direct aid, with the latter approach being left to regional governments.

Excessive corporate debt

When the coronavirus pandemic hit Spain last year, the government responded with the ERTE job retention scheme that allowed companies suffering losses from the health crisis to temporarily send home workers or reduce their working hours, and offered soft loans guaranteed by Spain’s Official Credit Institute (ICO). These measures were designed on the basis that the impact of the crisis would be short term, but as the pandemic has dragged on, they are no longer enough to help struggling businesses.

One year on, many companies that were once viable have since accumulated excessive debt – just as the Bank of Spain warned would happen. In these cases, even if a business does not go bankrupt, it may spend years trying to pay back this debt, making no investment and cutting jobs.

In a bid to address this problem, the government is considering forgiving a part of the 70% or 80% of loans guaranteed by the ICO. The Economy Ministry is also finalizing a plan to provide aid to companies that have been granted ICO loans. This would provide aid exclusively to businesses that are in need, that have suffered as a result of the coronavirus restrictions and are considered commercially viable. In principle, this would leave out companies that are financially sound and those that have no prospects of recovery.

But the banking sector and many experts are critical of this approach, arguing that support should also be provided to the businesses that have not asked for a loan and instead stayed afloat by using their own savings. These critics claim that the main problem currently facing companies is a lack of revenue, not a lack of liquidity or over-indebtedness. Their argument is that relieving debt will not help businesses if they have no revenue.

While government sources did not elaborate further on the plan, other sources said that the Economy Ministry is also working on a type of recapitalization fund for small businesses in Spain, given that large corporations already have access to a 10-billion fund created by the state holding company SEPI. Spanish airline Air Europa and the engineering firm Duro Felguera have already requested loans from this fund.

State of alarm

Sánchez announced the aid package at a congressional appearance to explain the government’s handling of the pandemic. In order to secure support to extend the current state of alarm until May 9, Sánchez had to agree to appear before lawmakers every two months to provide an account of the crisis. The state of alarm was approved in October to give the regions the power to limit mobility in order to contain the spread of the coronavirus. Several opposition groups had proposed that the emergency measure be extended only until March 9. But the government made clear on Tuesday that it will not be lifted two months earlier as it is not recommended given the high coronavirus transmission rates in Spain.