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14 Sep, 2020 10:17

Spain plans to extend furlough scheme into 2021 to guarantee workers part of their income

Spain plans to extend furlough scheme into 2021 to guarantee workers part of their income

The Spanish government is considering extending the nationwide ERTE furlough scheme into 2021, Labor Minister Yolanda Diaz said on Monday.

“The date is open, but likely [December 31] would not be the most adequate, and we have to extend a little beyond,” Diaz told a Spanish state TV station.

She noted that the extension might be longer for different industries. The tourism industry, for example, would benefit from the scheme for as long as it needed it.

The scheme, which was due to end on September 30, provides furloughed workers with 70 percent of their base salary for the first six months. It drops to 50 percent for the following months.

Diaz said on September 3 that the scheme would be extended for as long as necessary, adding that this would be key to the mechanism’s success. “It’s absurd to put an end date on it,” she told IB3 radio station.

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The minister believes the drop to 50 percent was “profoundly unfair,” because it’s a substantial decrease in income. “We want to maintain the protection at 70 percent,” said Diaz, an MP with the left-wing coalition partner Unidas Podemos (Together We Can).

The program was introduced in March to help employees and employers alike, amid Spain’s strict coronavirus lockdown. It supported around 3.4 million people at the height of the pandemic, according to Reuters.

As of September, the number of workers enrolled in the furlough scheme has fallen to around 620,000, the government said. Around 5,000 people per day are coming out of the program, with most of those who haven’t being involved in hard-hit industries linked to tourism.

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