He new package of economic measures announced last week by the President of the Government, Pedro Sánchezto expand aid following the effects of DANA which devastated part of the province of Valencia, failed to allay the concern of Valencian businessmen, who expected greater initiatives after the first package announced.
The companies’ conclusion is clear: Main lines included are not direct aidswhich is considered to beor that the majority of SMEs and self-employed people have an urgent need.
Yeah After the initial plan, the unanimous assessment was that it was not up to parwhat is included in the second part corroborates that the vast majority of central government money corresponds to ICO loans and Consortium Compensation Insurance.
“Without a response plan that includes more direct aid and without it arriving quickly, reconstruction and economic recovery will be really complicated,” he says. Salvador Navarro, president of the Business Confederation of the Valencian Community (CEV) and vice-president of CEOE. The regional employers’ association believes that direct support is “clearly insufficient” and that a greater effort on the part of the public sector will be necessary to revive economic activity.
Differences from other seizures
In the business world, it is considered It is a mistake to compare the current crisis with that of Covidin which activity was paralyzed and hibernated, or the war in Ukrainewith rising costs and supply problems. In both cases, businesses and self-employed workers kept their facilities and assets intact, while with DANA many have lost everything. “This leads to thousands of SMEs disappearing if they do not receive the necessary assistance in time”employers insist on emphasizing the urgency of non-repayable aid.
The latest estimates from the Valencia Chamber of Commerce updated 5,200 retail businesses affected and more than 21,000 premises of different activities which suffered damage. The professional association Confecomerç emphasizes that In the case of ICOs, many companies are already benefiting from these loans since the pandemic. Furthermore, the implementation and obtaining times do not work in favor of self-employed workers and SMEs.
The list of initiatives included so far by the Spanish government has not satisfied either the main productive sectorswho see time pass and their activity continue without resuming. The Valencian automobile industry, with 22,000 workers and which was already suffering from the drop in Ford production in Almussafesis one of those who sounded the alarm.
Major industries in slow motion
Francisco Segura, president of the AVIA sector cluster, says a precise and rapid plan for the sector and its companies which have been seriously affected and whose problems are already having consequences for Ford itself. “It is essential to resume activity as quickly as possible. In a sector like this, car manufacturers could look for alternatives, putting competitiveness at risk”he warns.
Another major industry that is being impacted by DANA is the railway manufacturer Stadlerwho had to reduce its production even if its facilities have not been damaged. Its supply was affected by the problems of around thirty suppliers which suffered destruction, in addition to 400 of its 3,000 employees have difficulty traveling to the plant.
One of the rare sectors in which specific actions have been implemented It’s agricultural, but what was announced doesn’t meet expectations either.. “The government allocated a sum of 175 million to replace infrastructure and the ministry only announced 20 million, a totally ridiculous amount,” estimates La Unió, which puts the toll of damage caused to agricultural infrastructure alone at more than 500 millions, not counting crop losses.
Many companies already They look further afield and demand greater investment in infrastructures. “We must put on the table that a Hydrological Plan is now necessary to divert and improve ravines in inhabited areas,” he shouts. Francisco Zamora, president of the Fevec construction association.
Tax and labor measures
One of the areas in which Valencian businesses lack greater effort from the government of Pedro Sánchez is that of tax policy. For the independent employers’ association CEV An important package of tax deductions in terms of personal income tax and corporate tax is still missing. which helps with asset repair and replacement and encourages the rebuilding and replacement of capital assets that thousands of businesses face.
The Association of Economists of Valencia (COEV) highlighted several tax reductions which, in the words of its dean, Juanjo Enríquez, “must go further in the face of the exceptional situation and the destruction” caused by DANA. In addition to some already collected by the Generalitat in transferred taxes, such as the 100% bonus on Tax on real estate transfers and tax on documented legal acts to replace vehicles and houses, they require a exemption or improvement of the tax on Constructions, Installations and Works (ICIO)applicable to recovery work on homes and commercial facilities.
The president of the Fevec employers’ union, Francisco Zamora also calls for reducing or eliminating VAT “for those who have to buy everything again.”because the paradox can arise: in many cases, VAT is collected more than what is provided by the aid to the people concerned.”
In the case of labor measures, the CEV warns that for many companies, Error of force majeure by DANA under the approved conditions will not be a solution due to conditions such as guaranteeing continuity of employment and return of aid in the event of failure. “With all these limitations, many will wonder if it is better to resort to an Erte or an ERE,” says its president, Salvador Navarro, especially those who have lost all their belongings.
From the CEV they qualify some of the measures adopted by the Ministry of Labor as “obviously harmful” for business continuity. Nearly 1,200 companies with more than 16,000 employees have already requested these files.
