The government covers part of employers’ social security contributions for workers who have returned and those who remain temporarily suspended.
The furlough program, known in Spanish as ERTE, “has decisively contributed to stemming what would have been a hemorrhaging in our labor market,” government spokeswoman Maria Jesus Montero said in a press conference on Friday. “Jobs are our priority.”The decision underscores how the economic damage from the coronavirus crisis is deeper than officials in Spain had anticipated when the pandemic struck — forcing them to prolong a plan that they had expected to last only a few months. Around the world economists continue to slash their forecasts, compelling policy makers to keep doubling down on their emergency measures.
The furlough scheme was already extended once in May and the current iteration was set to expire on June 30. Social Security Minister Jose Luis Escriva and Labor Minister Yolanda Diaz had been intensely negotiating during the past two weeks with union leaders and business associations to reach a deal.
Disagreements over the additional duration and generosity of the scheme had pushed a final agreement to the last minute.
Some industry leaders were calling for an extension through Dec. 30. They ultimately settled on Sept. 30.
