Spain extends coronavirus aid for tenants and homeowners

FILE PHOTO: A man talks on the phone at an apartment complex in Madrid, Spain, June 19, 2019. REUTERS/Susana Vera/File Photo

MADRID (Reuters) - Spain’s cabinet will on Tuesday approve the extension of measures aimed at easing the financial burden on rental tenants and homeowners hit by the coronavirus, government sources told Reuters.

With the new measures, tenants will be able to renew their existing contracts for six months under the same conditions, while a ban on utility companies cutting gas, electricity and water supplies will remain in place until Sept. 30, the sources said.

For qualifying homeowners, the deadline to apply for a holiday on mortgage payments will be pushed back until the end of September from July 20.

Battered by the pandemic lockdown and travel restrictions, Spain’s economic output is likely to have shrunk 20% in the second quarter, according to the central bank.

In March, the government approved a 700-million euro aid package to help vulnerable households and later introduced a minimum income programme to reach around 2.3 million people.

But a U.N. report published on Monday criticised Spain’s social protection net as insufficient and said the COVID-19 crisis had exacerbated the situation for its poorest citizens.

Reporting by Belén Carreño; Writing by Nathan Allen; Editing by Inti Landauro and Alison Williams