A necessary support plan to avoid collapse

2 min
Councillors Chakir El-Homrani, Pere Aragonès and Ramon Tremosa, at the press conference to present the new subsidies
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The Government presented on Monday an ambitious plan of direct aid to those affected by furlough, SMEs and the self-employed that should lighten the terrible impact that the pandemic is having on the economy. A total of €618m will be allocated in three main lines: €600 for workers affected by furlough and earning under €1,240 per month, €2,000 for the self-employed who have had a net yield in 2020 of less than €17,500, and €2,000 for SMEs for each worker (with a maximum of €30,000 per company) in exchange for maintaining jobs for at least one year. In short, it is a question of putting money into the pockets of citizens and the economic fabric with the dual objective of avoiding the fall into poverty of people who without the virus would have jobs and the closure of companies that would also be profitable without the restrictions imposed by the pandemic.

Since the beginning of the crisis, economists of various ideological persuasions have advocated this type of policy, called helicopter money. The important thing is that the aid reaches the pockets of the people who need it as quickly as possible, speeding up the bureaucratic process as much as possible, and it is a non-refundable aid. From this point of view, the effort of the Generalitat is remarkable, and even more so in a context in which its finances are severely punished by an unfair financing system that, in turn, makes it impossible for it to obtain money in good conditions on the markets. On the other hand, the Spanish government can access this money, which is provided by institutions such as the ECB, under much more favourable conditions, and therefore it should be the central administration that takes the initiative in this field. It is true that the Spanish government is also making a great effort with the furlough scheme, a social umbrella that is preventing an even greater drama, but in the case of Catalonia, SMEs and the self-employed are clearly being neglected.

Precisely, this Monday Oxfam Intermón published a report that highlighted that in Catalonia there were now 120,000 more people in a situation of relative poverty than before the pandemic, which means an increase of 11.7%. The crisis is therefore already having very high social costs that must be mitigated as much as possible to prevent them from becoming entrenched. The exceptional nature of this economic shock has broken down taboos such as that of controlling the deficit, and the European institutions themselves say that this does not have to be the priority now. The reasoning is very simple: it will be cheaper to keep companies alive for a while, albeit artificially and with public funds, than to have to face the bill for closure in the form of job losses later on.

It is a pity that the proximity of the elections may raise suspicions about the plan and lead to accusations of electioneering, but it does not matter, because nobody can question the emergency situation we are experiencing. Now we only have to hope that the Generalitat has learned from previous experiences, especially from its mistakes, so that the aid really reaches those who need it.