Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Spain to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak
Date: 2020-08-24
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Spain, emergency aid, employment aid, epidemic, fight against unemployment, infectious disease, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 24.8.2020  COM(2020) 469 final 2020/0222 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Spain to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council  Regulation  2020/672  (“SURE  Regulation”)  lays  down  the  legal  framework  for 
providing  Union  financial  assistance  to  Member  States,  which  are  experiencing,  or  are 
seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. 
Support  under  SURE  serves  for  the  financing,  primarily,  of  short-time  work  schemes  or 
similar measures aimed at protecting employees and the self‐ employed and thus reducing the 
incidence of unemployment and loss of income, as well as for the financing, as an ancillary, 
of some health-related measures, in particular in the workplace. 

On 3 August 2020, Spain requested Union financial assistance under the SURE Regulation. In 
accordance  with  Article  6(2)  of  the  SURE  Regulation,  the  Commission  has  consulted  the 
Spanish authorities to verify the sudden and severe increase in actual and planned expenditure 
directly related to its short-time work for employees, similar schemes specifically targeted at 
self-employed and workers in the tourism sector, and health benefits for workers infected by 
COVID-19, caused by the COVID-19 pandemic. In particular, it concerns:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

a  wage  compensation  of  up  to  70  per  cent  of  the  employees’  basic  salary  for 
employees  furloughed  under  the  short-time  work  scheme  ‘ERTE’  (‘Expediente  de 
Regulación  Temporal  de  Empleo’).  The  compensation  is  capped  at  a  maximum  of 
EUR  1  098.09  per  month,  which  may  be  increased  to  EUR  1  254.96  per  month  or 
EUR  1  411.83  per  month,  depending  on  the  beneficiary's  number  of  dependent 
children. 

a full or partial social security contribution exemption, depending on the employers 
size, and the month of the year, in respect of employees participating in ‘ERTE’. The 
exemption consists in foregone revenues for the government, which for the purpose 
of the implementation of Council Regulation 2020/672 can be considered equivalent 
to public expenditure. 

a benefit for the ‘cessation of activity’ (that is to say, the suspension, in full or in part 
of  self-employed  activity)  and  accompanying  social  security  contribution 
exemptions. The measure provides monthly payments whilst businesses are required 
to be closed or, if opened, where turnover has been reduced by more than 75%.  

a benefit for ‘permanent seasonal workers’ in the tourism sector who have not been 
able to return to their activity on the scheduled dates  

an exemption for employers from payment of social security contributions (by 50%) 
to  support  ‘employment  conservation  in  the  tourism  sector’  during  the  state  of 
emergency and beyond, while maintaining a minimum level of social protection for 
several  categories  of  workers.  An  average  of  total  monthly  expenditure  and  the 
number  of  persons  for  whom  companies  have  received  subsidies  gives  an  average 
expenditure per person per month of approximately EUR 192. 

health benefits for workers absent due to COVID-19 (either in preventive isolation or 
infected workers). The measure is similar to the scheme for accidents at work (that is 
to say, the benefits are more generous and are paid by the Social Security Fund as of 
the first day of leave), with benefits capped at 75% of the basic salary.  

Spain provided the Commission with the relevant information.  

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Taking into account the available evidence, the Commission proposes to the Council to adopt 
an Implementing Decision to grant financial assistance to Spain under the SURE Regulation 
in support of the above measures. 

• 

Consistency with existing policy provisions in the policy area 

The present proposal is fully consistent with  Council Regulation 2020/672, under which the 
proposal is made. 

The present proposal comes in addition to another Union law instrument to provide support to 
Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 
November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) 
No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, 
which amends that instrument to  extend its scope to  cover major public  health emergencies 
and to define specific operations eligible for financing, was adopted on 30 March.   

• 

Consistency with other Union policies 

The proposal is part of a range of measures developed in response to the current COVID-19 
pandemic  such  as  the  “Coronavirus  Response  Investment  Initiative”,  and  it  complements 
other  instruments  that  support  employment  such  as  the  European  Social  Fund  and  the 
European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and 
lending in this particular case of the COVID-19 outbreak for supporting Member States, this 
proposal  acts  as  a  second  line  of  defence  to  finance  short-time  work  schemes  and  similar 
measures,  helping  protect  jobs  and  thus  employees  and  self-employed  against  the  risk  of 
unemployment.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this instrument is Council Regulation 2020/672.   

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  follows  a  Member  State  request  and  shows  European  solidarity  by  providing 
Union financial assistance in the form of temporary loans to a Member State affected by the 
COVID-19  outbreak.  As  a  second  line  of  defence,  such  financial  assistance  supports  the 
government’s increased public expenditure on a temporary basis in respect of short-time work 
schemes  and  similar  measures  to  help  them  protect  jobs  and  thus  employees  and  self-
employed against the risk of unemployment and loss of income. 

Such  support  will  help  the  population  affected  and  helps  to  mitigate  the  direct  societal  and 
economic impact caused by the present COVID-19 crisis.  

• 

Proportionality 

The proposal respects the proportionality principle. It does not go beyond what is necessary to 
achieve the objectives sought by the instrument.  

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3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out. 

• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

4. 

BUDGETARY IMPLICATIONS 

The  Commission  should  be  able  to  contract  borrowings  on  the  financial  markets  with  the 
purpose  of  on-lending  them  to  the  Member  State  requesting  financial  assistance  under  the 
SURE instrument.  

In  addition  to  the  provision  of  Member  State  guarantees,  other  safeguards  are  built  into  the 
framework in order to ensure the financial solidity of the scheme: 

 

 

A rigorous and conservative approach to financial management; 

A  construction  of  the  portfolio  of  loans  that  limits  concentration  risk,  annual 
exposure and excessive exposure to individual Member States whilst ensuring 
sufficient resources could be granted to Member States most in need; and 

 

Possibilities to roll over debt. 

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2020/0222 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Council Regulation (EU) 2020/672 to Spain to 
mitigate unemployment risks in an emergency situation following the COVID-19 
outbreak 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having regard to Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of 
a  European  instrument  for  temporary  support  to  mitigate  unemployment  risks  in  an 
emergency (SURE) following the COVID-19 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

On 3 August 2020, Spain requested financial assistance from the Union with a view to 
complementing  its  national  efforts  to  address  the  impact  of  the  COVID-19  outbreak 
and its socio-economic consequences for workers.  

The  COVID-19  outbreak  and  the  extraordinary  measures  implemented  by  Spain  to 
contain the outbreak and its socio-economic and health-related impact are expected to 
have  a  dramatic  impact  on  public  finances.  According  to  the  Commission’s  2020 
Spring forecast, Spain was expected to have a general government deficit and debt of 
10.1% and 115.6% of gross domestic product (GDP) respectively by the end of 2020. 
According  to  the  Commission’s  2020  Summer  interim  forecast,  Spain’s  GDP  is 
projected to decrease by 10.9% in 2020.  

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Spain. This has led to a sudden and severe increase in public expenditure by Spain in 
respect  of  the  short-time  work  scheme,  similar  schemes  specifically  targeted  at  the 
self-employed  and  workers  in  the  tourism  sector,  and  in  support  of  public  health 
measures, as set out in recitals 4 to 9. 

(4)  More  specifically,  “Royal  Decree-Law  8/2020”,  “Royal  Decree-Law  11/2020”  and 
“Royal  Decree-Law 24/2020”, as they are referred to  in Spain’s request  of 3 August 
2020,  introduced  wage  compensation  of  up  to  70  per  cent  of  the  employees’  basic 
salary  for  employees  furloughed  under  the  short-time  work  scheme  ‘ERTE’ 
(‘Expediente de Regulación Temporal de Empleo’). The compensation is capped at a 
maximum of EUR 1 098.09 per month, which may be increased to EUR 1 254.96 per 
month  or  EUR  1  411.83  per  month,  depending  on  the  beneficiary's  number  of 
dependent children. 

(5) 

The  authorities  have  also  introduced  a  full  or  partial  social  security  contribution 
exemption, depending on the employers size and the month of the year, in respect of 
employees participating in ‘ERTE’. The exemption consists in foregone revenues for 

1  OJ L 159, 20.5.2020, p.1. 

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the  government, which  for the purpose of the implementation  of Council Regulation 
2020/672 can be considered equivalent to public expenditure. 

(6) 

For the self-employed, the authorities  have introduced a benefit for the ‘cessation  of 
activity’ (that is to say, the suspension, in full or in part of self-employed activity) and 
accompanying social security contribution exemptions. The measure provides monthly 
payments whilst businesses are required to be closed or, if opened, where turnover has 
been reduced by more than 75%.  

(7)  Monthly payments have also been introduced for ‘permanent seasonal workers’ in the 
tourism sector who have not been able to return to their activity on the scheduled dates 
due to the COVID-19 outbreak, on the basis of “Royal Decree-Law 15/2020”, as it is 
referred to in Spain’s request of 3 August 2020. 

(8) 

(9) 

“Royal  Decree  Law  8/2019”,  “Royal  Decree  Law  12/2019”,  “Royal  Decree  Law 
7/2020” and “Royal Decree Law 25/2020”, as they are referred to in Spain’s request of 
3 August 2020, have introduced an exemption for employers from payment of  social 
security  contributions  (by  50%)  to  support  ‘employment  conservation  in  the  tourism 
sector’ during the state of emergency and beyond, while maintaining a minimum level 
of  social  protection  for  several  categories  of  workers.  An  average  of  total  monthly 
expenditure and the number of persons for whom companies have received subsidies 
gives an average expenditure per person per month of approximately EUR 192. 

Finally,  Spain  has  extended  health  benefits  for  workers  absent  due  to  COVID-19 
(either in preventive isolation or infected workers) on the basis of “Royal Decree-Law 
6/2020” and “Royal  Decree-Law 13/2020”, as they are referred to in Spain’s request 
of 3 August 2020. The measure is similar to the scheme for accidents at work (that is 
to say, the benefits are more generous and are paid by the Social Security Fund as of 
the first day of leave), with benefits capped at 75% of the basic salary.  

(10)  Spain  fulfils  the  conditions  for  requesting  financial  assistance  set  out  in  Article  3  of 
Regulation  (EU)  2020/672.  Spain  has  provided  the  Commission  with  appropriate 
evidence that the actual and planned public expenditure has increased by EUR 23 803 
573 600 as of 1 February 2020 due to the national measures taken to address the socio-
economic effects of the COVID-19 outbreak. The increased amount directly related to 
the short-time work scheme ‘ERTE’ and similar measures specifically targeted at the 
self-employed  and  workers  in  the  tourism  sector  constitutes  a  sudden  and  severe 
increase because of the almost immediate and unprecedented increase in the number of 
beneficiaries  covered  by  those  schemes  and  the  magnitude  of  the  related  benefits  in 
Spain.  Spain  intends  to  finance  EUR  1  660  000  000  of  the  increased  amount  of 
expenditure through Union funds.  

(11)  The Commission has consulted Spain and verified the sudden and severe increase in 
the actual and planned public expenditure directly related to short-time work schemes 
and  similar  measures,  as  well  as  the  recourse  to  relevant  health-related  measures 
related  to  the  COVID-19  outbreak  referred  to  in  the  request  of  3  August  2020,  in 
accordance with Article 6 of Regulation (EU) 2020/672.  

(12)  Financial  assistance  should  therefore  be  provided  with  a  view  to  helping  Spain  to 
address the socio-economic effects of the severe economic disturbance caused by the 
COVID-19 outbreak. 

(13)  This decision should be without prejudice to the outcome of any procedures relating to 
distortions of the operation of the internal market that may be undertaken, in particular 
under Articles 107  and  108 TFEU.  It  does not  override the  requirement  for Member 

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States to notify instances of potential State aid to the Commission under Article 108 
TFEU. 

(14)  Spain should inform the Commission on a regular basis of the implementation of the 
planned public expenditure, in order to enable the Commission to assess the extent to 
which Spain has implemented that expenditure. 

(15)  The  decision  to  provide  financial  assistance  has  been  taken  taking  into  account 
existing  and  expected  needs  of  Spain,  as  well  as  requests  for  financial  assistance 
pursuant  to  Regulation  (EU)  2020/672  already  submitted  or  planned  to be  submitted 
by other Member States, while applying the principles  of equal  treatment,  solidarity, 
proportionality  and  transparency.  In  particular,  the  amount  of  the  loan  has  been 
established to  ensure compliance with  the prudential  rules  applicable to the portfolio 
of loans as specified in Council Regulation (EU) 2020/672,   

HAS ADOPTED THIS DECISION:  

Spain fulfils the conditions set out in Article 3 of Regulation (EU) 2020/672.   

Article 1 

Article 2 

1.  

2.  

3.  

4.  

5.  

6.  

The Union shall make available to Spain a loan amounting to a maximum of EUR 21 
324 820 449. The loan shall have a maximum average maturity of 15 years. 

The availability period for financial assistance  granted by this Decision shall be 18 
months starting from the first day after the entry into force of this Decision.  

The Union financial assistance shall be made available by the Commission to Spain 
in a maximum of ten instalments. An instalment may be disbursed in one or several 
tranches. The maturities of the tranches under the first instalment may be longer than 
the  maximum  average  maturity  referred  to  in  paragraph  1.  In  such  cases,  the 
maturities  of  further  tranches  shall  be  set  so  that  the  maximum  average  maturity 
referred to in paragraph 1 is respected once all instalments have been disbursed.  

The  first  instalment  shall  be  released  subject  to  the  entry  into  force  of  the  loan 
agreement provided for in Article 8(2) of Regulation (EU) 2020/672.  

Spain shall pay the cost of funding of the Union referred to in Article 4 of Regulation 
(EU)  2020/672  for  each  instalment  plus  any  fees,  costs  and  expenses  of  the  Union 
resulting from any funding.  

The Commission shall decide on the size and release of instalments, as well as on the 
size of the tranches.  

Spain may finance the following measures: 

Article 3  

(a) 

(b) 

the  short-time  work  scheme  ‘ERTE’  (‘Expediente  de  Regulación  Temporal  de 
Empleo’) for employees, as provided for by Royal Decree Law 8/2020 of 17 March 
(chapter II, articles 22-28), Royal Decree Law 18/2020 of 12 May and Royal Decree 
Law 24/2020 of 26 June (articles 1-7); 

the  extraordinary  social  security  contribution  measures  for  employees  subject  to 
ERTE,  as  provided  for  by  Royal  Decree-Law  8/2020,  of  17  March  (chapter  II, 

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(c) 

(d) 

(e) 

(f) 

articles 22-28), Royal Decree-Law 18/2020, of 12 May, Royal Decree-Law 24/2020, 
of 26 June (Chapter I, article 4);  

the  benefit  due  to  ‘cessation  of  activity’  and  the  accompanying  social  security 
contribution exemptions, as provided for by Royal Decree-Law 8/2020 of 17 March 
(article 17), modified by Royal Decree-Law 11/2020 of 31 March (final disposition 
1.8) and by Royal Decree-Law 24/2020 of 26 June (article 8);  

the  support  scheme  for  ‘permanent  seasonal  workers’,  as  provided  for  by  Royal 
Decree-Law 15/2020, of 21 April (final disposition 8); 

the partial exemption of employers from payment of social security contributions to 
support ‘employment  conservation in  the tourism sector’, as provided for  by  Royal 
Decree Law 8/2019, of 8 March, Royal Decree Law 12/2019, of 11 October, Royal 
Decree Law 7/2020 (article 13) of 12 March and Royal Decree Law 25/2020 (final 
disposition 4); 

health  benefits  for  workers  absent  due  to  COVID-19,  as  provided  for  by  Royal 
Decree-Law  6/2020,  of  10  March  (article  5)  and  Royal  Decree-Law  13/2020,  of  7 
April (final disposition 1).  

Spain  shall  inform  the  Commission  by  [DATE:  6  months  after  date  of  publication  of  this 
Decision],  and  every  6  months  thereafter  of  the  implementation  of  the  planned  public 
expenditure until such time as that planned public expenditure has been fully implemented. 

Article 4 

This Decision is addressed to the Kingdom of Spain. 

Article 5 

This Decision shall be published in the Official Journal of the European Union.  

Done at Brussels, 

Article 6 

For the Council 
The President 

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