Banca March | Pedro Sanchez’s government hopes that the European Council will approve the Commission’s proposal on the SURE fund this September, in order to access the first tranche of financing this year. Spain’s request for financing in the first tranche is valued at 21.325 billion euros and is already approved by the European Executive. This will be used to cover the expenses associated with employment until September 30th. According to the Minister of Economic Affairs and Digital Transformation, Nadia Calviño, these funds will make it possible to finance the cost of the temporary layoffs, the contributions made by the Social Security, extraordinary benefits, sick leave as a result of the pandemic or special measures for tourism. That said, the repayment term of these funds has yet to be determined. In principle, a first tranche would be distributed in 2020 and then several tranches over the next year. In the event the European Council approves the Commission’s proposal, each EU country applying for funding will have to sign a bilateral loan agreement with the EU executive. They will also have to comply with all procedures according to national legislation before releasing the funds.
The Minister of Economic Affairs and Digital Transformation has also announced that next week a new €40 Bn line of guarantees from state-owned bank ICO will be activated. Calviño pointed out last week that the €100 Bn with which the first ICO guarantee programme was provided have already been mobilized. She hopes to have a new €40 billion operational as of next week. This line will complement the aid already being implemented and will be used to finance both liquidity and investment, the latter with a focus on environmental sustainability and digitalization. The loans will have a life of eight years and ICO guarantees will cover 80% of the credit for SMEs and self-employed and 70% for large companies.