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Spain extends furlough scheme to May

Published on January 19, 2021

The Spanish government said Tuesday it had reached an agreement with unions and business groups to extend its coronavirus furlough scheme for an extra four months until the end of May.

It is the third time that the government has extended the costly ERTE scheme since it was introduced last April.

It provides furloughed workers with 70 percent of their base salary for the first six months, before dropping to 50 percent for the following months.

Those companies that take part in the scheme are banned from making layoffs in the six months after it ends.

“We will maintain all measures to safeguard employment,” Labour Minister Yolanda Diaz told journalists.

Over 3.4 million workers were supported by the scheme at the height of Spain’s strict coronavirus lockdown last year.

By the end of last year, the scheme still supported some 755,000 workers, mainly in Spain’s hard-hit tourism sector.

The programme is one of the key measures put in place by Prime Minister Pedro Sanchez’s leftist coalition government to mitigate the economic impact of the pandemic

Hit hard by one of Europe’s worst coronavirus outbreaks, the Spanish economy — the eurozone’s fourth largest — has been battered.

The number of people registered as being unemployed in Spain rosed by nearly 725,000 last year to 3.9 million as of the end of December, according to labour ministry figures.

The International Monetary Fund predicts the Spanish economy will post a 12.8 percent economic slump in 2020, which would make it the hardest-hit country of the world’s advanced economies.