Proposals to improve the direct aid plan for companies in Spain

The Spanish Business Association (CEOE) analyzes the implementation of direct grants to self-employed and companies approved by the government, in the context of the Covid-19 crisis. It provides recommendations to improve the design and effectiveness of the plan, aimed to softening some of the general requirements to be a beneficiary and to end with the significant divergences in their concession among different regions.

The main recommendations and conclusions of the CEOE´s analysis on the implementation of direct aid to self-employed and companies approved by the government are as follows:

• Regarding the general requirements:
  - Usage of the aid: Current criteria is harming those companies and entrepreneurs that have paid their debts instead of resorting to non-payment or external financing, since the aid can only be used to pay fixed costs, suppliers, reduction of debts derived from economic activity and debts with bank creditors.
  - Viability of the companies: CEOE considers that the rule of excluding those companies and entrepreneurs with losses in 2019 should be lifted, since the relative size of losses is not considered neither if they effectively affect the viability of the company. It would be advisable to assess the impact of losses on the equity of the company.
  - Term of the obligations eligible for aid: It would be necessary to extend the call for aid at least until the end of September, considering that the economic effects of the pandemic are still visible.
   
• Different criteria for granting aid by autonomous regions (CCAA): By allowing the CCAA to modify some of the general requirements, there have been significant differences that are not always justified when granting aid so that “companies in the same economic circumstances would or would not be entitled to aid depending on the territory in which they are registered”.
   
• International comparison: In Spain the aid has arrived several months later and with less coverage than that of the main surrounding countries (Germany, France, Italy).