Companies hit by the coronavirus pandemic will have 3 more years to return the credits

The Executive intends to approve in the Council of Ministers this Tuesday a royal decree law that will extend until June 30 the possibility of underwriting credits with ICO guarantee and will also extend the grace period. The final intention is this: that las companies, SMEs and the self-employed have up to three more years to repay these loans.

The rule, in reality, will be another mixed bag: it will include a set of measures related to the bankruptcy regime, the energy field or the reduction from 21% to 4% of VAT on masks for sale to the public, as advanced by the Third Vice President of Economic Affairs and Digital Transformation, Nadia Calviño. All in the same law.

The Minister of Economy made this announcement at a press conference after the meeting chaired by the President of the Government, Pedro Sánchez, to establish the Roundtable for Social Dialogue for Recovery, Transformation and Resilience, to which several ministers and social agents have attended, reports Europa Press.

Currently, ICO credits -granted by entities and guaranteed by the Government- to maintain liquidity in the worst moments of the pandemic, they have a 12-month grace period, although this Tuesday it is expected to be approved extend up to three more years the term to repay loans with ICO guarantee, as confirmed to Europa Press in Executive sources.

In this way, companies, the self-employed and SMEs that requested financing with this State guarantee they will have a longer term.

Calviño has clarified that the European Commission has authorized the extension of the subscription term for these guaranteed credits until the end of June. «We are going to adapt to this new community framework extending until June 30 the possibility of subscribing these credits“, He specified, detailing that it will be established” up to the maximum allowed in terms of contract duration and grace periods. “

These news will see the light after the Government has agreed it with the European Commission and the banking entities, something that the vice president has recognized that “it has not been easy”, as they are public aid and do not conflict with the banks’ “judicial framework”, and in this case special attention will be given to the sectors most affected by the second wave of the pandemic, such as hotels and restaurants.

The vice president herself already said last Saturday that the Executive had planned to approve in the Council of Ministers this Tuesday new measures to support companies and the self-employed, which would include the inclusion of bonuses and extensions of the grace period and amortization of the loans of the ICO to face the crisis.

With these new measures, Calviño has explained that the Executive intends to protect the productive tissue to guarantee the solvency of viable companies.

The amount guaranteed by the Government with ICO credits until last November 11 reached 81,787 million euros and a total of 107,600 million have been mobilized with the signing of 876,000 operations, 98% of these with SMEs and the self-employed.

Insolvency regime

Similarly, the royal decree law that will be approved by the Council of Ministers this Tuesday will include another set of measures related to the bankruptcy regime, the energy field and the reduction from 21% to 4% of VAT on masks sold to the public, according to Vice President Nadia Calviño has detailed. The Government actively repeated that it could not lower this tax on masks until it had a guarantee from Brussels that it had already had for months.

Hospitality and commerce will continue without aid for the moment

Similarly, the Government works in coordination with the autonomous communities and local corporations in a support plan for the hospitality and commerce sectors, two of the most directly affected by the crisis derived from the pandemic, in order to save the Christmas campaign, although in principle it would not go to the Council of Ministers this Tuesday. Other countries announced restrictions and aid for these companies at the same time.

“We are working on the basis of different options and alternatives and this work will be announced when we have a clear plan from the Government,” said Calviño, specifying that they want to get there in a “more efficient” and ” directly “to companies and operators that need it, following the” important safety net “approved since March for the hospitality or tourism sector.

The Executive already has firm proposals with economic, fiscal and financial measures and has accelerated the definition of these supports for commerce and restaurants, so it does not rule out breaking up the plan to approve a first oxygen balloon as soon as possible.

Among the possible measures to be implemented are: bonuses and exemptions in Social Security contributions, which will be added to the extension of the grace period and the repayment term of the ICO credits, as well as actions to be able to renegotiate rents.

With these measures, the hotel sector, which has requested direct aid worth 8,500 million euros, would take some oxygen to deal with the “dramatic” situation it is going through due to the closures imposed to stop Covid-19 and would guarantee its survival. However, companies warn: either the aid is overwhelming or many more will inevitably go to the bankruptcy.

So far the data is bleak: the crisis caused by the pandemic has meant, until October, the closure of 65,000 hospitality businesses, the loss of 350,000 jobs and a drop of more than 50% in turnover compared to 2019.