Government Expects That 84% Of 7000 Million Will Go To Micro-SMEs

The Government expects that 84% of the fund of 7,000 million euros for direct aid to viable businesses that have suffered sharp drops in income due to Covid-19 will go to micro-SMEs and that 48% of the beneficiaries, freelancers and companies, will work in the hospitality sector.

His estimate has been included in the 2021-2024 Stability Program sent this Friday to the European Commission together with the National Reform Program and the Recovery, Transformation and Resilience Plan, and where the reforms and investments planned to improve the economy with charge to the first 69,528 million of the 140,000 million euros that Spain can receive from the European Next Generation EU fund.

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The Directorate of Economic Analysis believes that another 11% of the 7,000 million in direct aid will go to small companies, 2% to medium-sized companies and another 2% to large ones . By sectors, the main recipients would be hospitality businesses (they would receive 48 % of the resources), together with administrative activities and auxiliary services (16%) and commerce (15%).

Other beneficiary sectors
The next largest beneficiaries would be the self-employed and companies involved in artistic , recreational and entertainment activities (12%), the industrial sector (4%) and transportation (4%).

Its breakdown is done by taking stock of the multiple measures deployed to help society, companies, the self-employed, families and workers to face the health and economic crisis caused by the pandemic .

According to their calculations, the wide range of measures have mobilized close to 231,000 million euros between 2020 and 2021 or the equivalent of 20.6% of GDP last year. Of these, he points out that more than 73,000 million or 6.4% of GDP have been direct aid and another 158,000 million or 14.1% corresponds to financing mobilized through guarantees, endorsements and moratoriums.

Of the total amount, another 37,283 million correspond to the Temporary Employment Regulation Files ( ERTE ) and coverage for cessation of activity and temporary disability, another 2,000 million have gone to support measures for the autonomous communities and 10,000 million to solvency funds , and 4,764 million to tax and Social Security measures.

Micro and SMEs
The 7,000 million plan for direct aid that will go, above all, to micro-SMEs and SMEs , is currently in the process of being launched through the autonomous communities as they initiate the corresponding agreement with the Treasury.

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The Government established almost 100 economic sectors that could access the funds and the autonomies will include new beneficiaries, including solvent companies even if they suffered losses in 2019 as it happens with some that fit ‘red numbers’ due to the bankruptcy of Thomas Cook.

They are direct aid that will be used to defray fixed costs such as those related to energy bills or rentals, as well as debt and payments to suppliers and other creditors, financial and non-financial. Companies and freelancers whose annual income has fallen more than 30% compared to 2019 will be able to take advantage of this line.

The maximum amount that could be paid out of this fund will be 3,000 euros for the self-employed under the objective estimation regime in personal income tax and for the rest it will range between 4,000 and 200,000 euros. The granting of these grants will end on December 31, 2021.