Spain extends COVID furlough scheme to January

MADRID (Reuters) - Spain on Tuesday agreed a last-minute extension of a scheme supporting hundreds of thousands of workers furloughed due to COVID-19, as part of a broader social protection package.

FILE PHOTO: A woman wearing a face mask walks past empty terraces of bars at Plaza Reial (Reial Square), after Catalonia's regional authorities announced restrictions to contain the spread of the coronavirus disease (COVID-19) in Barcelona, Spain August 7, 2020. REUTERS/Nacho Doce//File Photo

Spain is the European country with the highest number of coronavirus cases and its economy, the euro zone’s fourth-largest, is in its deepest recession on record.

In a deal reached hours before the ERTE furlough scheme was due to expire, the government agreed with unions and businesses to extend it until Jan. 31.

“It’s a day of hope for our country’s businesses and workers,” Labour Minister Yolanda Diaz told a news conference after a weekly cabinet meeting. “If we can make it through the autumn and the winter, then we will definitively be entering a recovery.”

Since its introduction in mid-March, when authorities also imposed one of Europe’s strictest coronavirus lockdowns, the ERTE programme has supported millions of workers.

As curbs were lifted in mid-June, many people returned to their jobs. But as of September some 750,000 workers were still receiving ERTE benefits, Social Security Minister Jose Luis Escriva told the same news conference.

“We have managed this crisis so that the level of protection and maintenance of employment is extraordinarily high. Today, 6 million workers have returned to the labour market,” he said.

During the pandemic’s April peak, as many as 7 million people were depending at least partly on the state for their income, including furloughed workers and people on medical leave.

The ERTE extension is part of a broader social protection package adopted by the cabinet on Tuesday, that also includes prolonging a ban on evicting vulnerable tenants.

This applies to several categories of tenants, including those who have lost their jobs permanently or are on a furlough scheme.

The package will also include new benefits for self-employed people who have lost their income, while a regulation allowing civil servants to work from home was also approved.

Spain has recorded almost 750,000 coronavirus cases since the epidemic began, with a death toll exceeding 31,000.

Reporting by Belen Carreno, Inti Landauro and Emma Pinedo; Additional reporting and writing by Nathan Allen; Editing by Ingrid Melander and John Stonestreet