The DANA of October 29 devastated a good part of the Valencian Community and continues to harm the regional economy, which is not surprising. IThe Chamber of Commerce estimates an economic impact of 21,819 million euros, which represents 32% of the GDP of the province of Valencia.. It must be taken into account that the 68 affected municipalities represent practically 25% of the region’s employment, which, before the torrential rains at the beginning of the month, translated into 264,883 jobs.
A job and a saving that will take a long time to return to the point of origin. Above all, if we take into account that a significant part of the economic fabric of the region was located in basements and industrial areas, these are precisely the areas that suffered the most damage. Furthermore, these are mainly small businesses: 90% of self-employed people in affected areas see their commercial activity paralyzed, as they assure elEconomista.es several representative associations of independent workers.
Faced with this situation, the government of Pedro Sánchez approved last Tuesday, November 5, a royal decree-law which brings together a series of urgent measures with an estimated value of more than 10.6 billion euros. This includes direct aid to self-employed people and SMEs which will be transferred to around 95,000 SMEs and self-employed people domiciled for tax purposes in the areas covered by DANA, for a total value of €838 million. In the case of the self-employed, this aid should reach around 65,000 beneficiaries and will amount to 5,000 euros, at a cost of 325 million euros.
For SMEs, They will be between 10,000 for those with less than one million euros of trading volume in 2023. i.e. the net amount of turnover and up to 150,000 euros for companies with more than 10 million euros in turnover or volume of operations, with an estimate of 30,000 beneficiary companies and a cost of 513 million euros. Since then, aid has continued to flow.
The Council of Ministers approved, last Monday, November 11, a new set of measures worth 3.765 million euros, which, added to the initial 10.609 million, now reach a total amount of 14.373 million euros. The Executive expects that the social shield deployed will help some 400,000 workers to maintain their income, 30,000 businesses to reactivate their activity and 100,000 households to cover their essential needs. The aid network will be compensated by the creation of a line of guarantees of up to 5 billion euros, which will be managed by the ICO, and which will be aimed at SMEs, the self-employed, but also to households, a novelty that did not include the mechanism that was also deployed during the pandemic.
Candidates will be able to access this financing via their bank, and the credits will be guaranteed by the government, so they will benefit from more favorable conditions than those accessed by individuals. The objective of these loans will be to re-equip businesses, reopen businesses or repair homes. The mechanism will deploy an initial financing line of 1,000 million euros which will be expanded to 5,000 million. “This is an amount similar to what businesses throughout the Valencian Community need during the Covid crisis,” Sánchez compared.
Millionaire damages to retailer
The retail sector has suffered the most consequences in recent weeks. In fact, a report prepared by Cámara Valencia estimates that the cost of repairing and reactivating retail commercial activity amounts to 1,789 million euros, since of the 8,106 companies in the areas affected by DANA, 64.5% could have suffered direct damage. The estimated cost of rehabilitating these premises amounts to 666 millionof which 21.8% are structural damages (145.3 million); 59.3% for interior and exterior cleaning and repair (394.89 million); 18.9% for the replacement of stocks (125.59 million), and 86.7% of the expenditure would be allocated to seriously damaged premises.
The interruption of commercial activity could imply sales losses of between 350 and 440 million euros and an economic loss for businesses of at least 50 million euros. As for the municipal markets, ten of them are damaged, and their repair costs as well as their urban developments are estimated at 30.5 million euros. The damage to the markets of seriously affected municipalities is between 10 and 12 million euros, and in shopping centers, around 70 million.
Insurance compensation
Public institutions will not be the only ones to have to make a significant financial outlay in the coming weeks. The Insurance Compensation Consortium (CCS), a public body financed by revenue from surcharges applied to contracts, will be responsible for the vast majority of insurance claims because they concern damage caused by an extraordinary phenomenon. In fact, during the first days, the Consortium received 109,480 applications. In the absence of publication by the agency of the amount of compensation, The Consortium will have to pay on average 100,000 euros for each accommodation insured and allocated in the DANA of Valencia, according to the estimate made by the Rastreator comparator and to which it had access elEconomista.es.
The comparator explains that this calculation will depend on two factors. On the one hand, the type of policy that was contracted and, on the other hand, the amount of content and content included in the contract. In the Valencian case, Rastreator calculates that, depending on the characteristics of the housing concernedthe insured capital would be between 70,000 and 90,000 euros for the continent and around 20,000 and 30,000 euros for the content. This assessment does not, however, include the price of the land where the house is located, which constitutes a significant part of the total value.
