He new package of economic measures announced last week by the President of the Government, Pedro Sánchezto expand aid due to the effects of the DANA that has devastated part of the province of Valencia, has not served to calm the concern among Valencian businessmen, who expected greater initiatives after the first package announced.
The companies’ conclusion is clear: The main lines included are not direct aidwhich is considered to be lor that the majority of SMEs and the self-employed urgently need.
Yeah After the initial plan, the unanimous assessment was that it fell shortwhat is included in the second part corroborates that the vast majority of the central government’s money corresponds to ICO loans and the Insurance Compensation Consortium.
“Without a response plan that includes more direct aid and without it arriving quickly, reconstruction and economic relaunch will be really complicated,” he says. Salvador Navarro, president of the Business Confederation of the Valencian Community (CEV) and vice president of CEOE. The regional employers’ association considers that direct support is “clearly insufficient” and a greater effort from the public sector will be necessary to relaunch economic activity.
Differences with other crises
From the business community it is considered It is a mistake to compare the current crisis with that of Covidin which activity was paralyzed and hibernated, or the war in Ukrainewith rising costs and supply problems. In both cases, companies and self-employed workers kept their facilities and assets intact, while with DANA many have lost everything. “It leads thousands of SMEs to disappear if they do not receive the necessary help in time”the employers insist to emphasize the urgency of non-refundable aid.
The latest estimates from the Valencia Chamber of Commerce put at 5,200 retail businesses affected and more than 21,000 premises with different activities that have suffered damage. From the trade association Confecomerç it is pointed out that In the case of ICOs, many companies carry these loans already from the pandemic. Furthermore, the deadlines for its implementation and obtaining do not play in favor of self-employed workers and SMEs.
The list of initiatives included so far by the Government of Spain has not satisfied either the main productive sectorswho see how time passes and their activity continues without resuming. The Valencian automobile industry, with 22,000 workers and which was already suffering from the drop in Ford production in Almussafesis one of those that has raised the alarm.
Large industries idle
Francisco Segura, president of the AVIA sector cluster, claims a specific and quick plan for the sector and its companies that have been seriously affected and whose problems already have consequences for Ford itself. “It is essential to resume activity as soon as possible. In a sector like this, car manufacturers could look for alternatives, putting competitiveness at risk”he warns.
Another large industry that suffers the knock-on effects of DANA is the railway manufacturer Stadlerwhich has had to reduce its production even though its facilities were not damaged. Its supply has been affected by the problems of thirty suppliers that have suffered destruction, in addition to 400 of its 3,000 workers have problems getting around to the plant.
One of the few sectors in which specific actions have been broken down It is agricultural, but what was announced does not meet expectations either.. “The Government has enabled a sum of 175 million to replace infrastructure and the Ministry has announced only 20 million, a totally ridiculous amount,” La Unió estimates, which raises the balance of damages to agricultural infrastructure alone to more than 500 million, without counting crop losses.
Many companies already They look further and demand a greater investment effort in infrastructures. “We must put on the table that a Hydrological Plan is now necessary to divert and improve ravines in inhabited areas,” he cries. Francisco Zamora, president of the construction association Fevec.
Fiscal and labor measures
One of the areas in which Valencian companies miss a greater effort by the Government of Pedro Sánchez is that of tax policy. For the autonomous employers’ association CEV An important package of tax deductions in Personal Income Tax and Corporate Tax is still missing that helps in the repair and replacement of assets and encourages the reconstruction and replacement of fixed assets that thousands of companies face.
The Association of Economists of Valencia (COEV) has pointed out several tax reductions that, in the words of its dean, Juanjo Enríquez, “have to go further in the face of the exceptional situation and destruction” caused by DANA. In addition to some already collected by the Generalitat in transferred taxes, such as the 100% bonus on Property Transfer Tax and Documented Legal Acts Tax to replace vehicles and homes, they demand a exemption or bonus from the tax on Constructions, Installations and Works (ICIO)applicable to works to recover homes and business facilities.
The president of the Fevec employers’ association, Francisco Zamora also urges to reduce or eliminate VAT “for those who have to buy everything againbecause the paradox can arise that in many cases more is collected from VAT than what is provided by aid to those affected.”
In the case of labor measures, CEV warns that for many companies the Erte of force majeure by DANA under the approved conditions is not going to be a solution due to the conditions such as guaranteeing continuity of employment and returning aid if they fail. “With all these limits, many are going to consider whether it is better to resort to an Erte or an ERE,” says its president, Salvador Navarro, especially those who have lost all their business.
From the CEV they qualify some of the measures adopted by the Ministry of Labor as “manifestly harmful” for the continuity of the activity. Nearly 1,200 companies with more than 16,000 workers have already requested these files.
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