After more than two months of lock-down due to the Covid-19 outbreak, Spain is becoming safer, and a phased programme of measures is under way to ease restrictions and get Spain and its people back to work after the most stringent confinement ever known in peace time. Back in early April, I wrote this scathing critique  for Spain Life Exclusive of the ‘smoke and mirrors’ of the Spanish government’s response, so now it’s time to check up and see which, if any, of the local SMEs and autonomos have received government assistance.

Brian from Catalonia still hasn’t received any aid, but he is thankful that his stepson has been helped. His mortgage on his shop and living space was secured on the property, but now that charge has been removed, and the loan is government guaranteed. It’s not a lot, but at least it means that the family will not end up homeless as well as out of work if their business fails as a result of the lock-down.

Lee and James, the established real estate agent and successful insurance start-up from the Community of Valencia, have not received any aid at all. They are, however, thankful that the phased re-opening has begun sooner than they expected. It’s just a question of waiting for customer confidence to return, and hoping there isn’t a second spike, which would spell disaster for them and many other small businesses.

From 11 May, there has been some re-opening of businesses and return to trading and manufacturing, dependant on Covid-19 statistics in individual health areas. This is a relief for many SMEs and autonomos – some shops can open by appointment only for two weeks, and then move to full opening on 25 May, conditional on the continued decline in infection and death rates. Restaurants with large terraces can open with 50 per cent occupancy, and then from 25 May they will be able to open their dining rooms, again with 50 per cent occupancy.

I talked to people from different types of small business to find out if these measures were practical, and how they would manage trading so that staff and customers could safely enjoy the experience. I also asked how these restrictions would impact on profitability. Again, it seems most business owners are less than impressed with the government’s handling of the situation.

Now it’s over to the business owners, for their views on the new rules, and how the much-trumpeted ‘Financial Rescue Package’ has worked for them. Or not, as the case may be!

The ladies who work from home

Autonomo Denise, an alternative therapist who works from her home near Benidorm, has been unable to get help with her rent, or her business, as she owed taxes at the end of February. She had no income in the last trimester of 2019, but still had to pay autonomo. She’ll be okay, but that’s thanks to having a full freezer and loyal clients, not through any government aid. However, she still considers herself fortunate:

My clients have been so supportive. They’ve paid for treatments in advance, which has enabled me to pay for electric, water, internet and other essentials. I have managed to keep my head above water, despite having no income or government aid since March 14.

 

Denise is also lucky that she hasn’t lost a single booking, and her clients are queuing up to come for massages, facials and other treatments as soon as they can. She already uses many single use products during the course of treatments, and can ensure safe distances between clients and provide adequate personal protective equipment (PPE) for herself and her staff. She can’t wait to get back to work, and neither can her staff. They had to wait for a full month to receive any money at all, and when I spoke to her, they had received just €400 each from the government. It’s just not enough!

Alison, who works from home as a clairvoyant medium, spiritual teacher and healer, is in a similar position to Denise. She had arranged fully subscribed workshops and courses, which had to be cancelled, and as yet she had no idea when she can resume her work. As her treatment room and teaching room are part of her home and not business premises, there is no clear guidance available.

Alison had to borrow money from her sister in the UK to pay her autonomo, even though this was supposed to be suspended. As I mentioned in the last article, somebody should have told the civil servants, because everyone I spoke to for the last article and this one had the same tale to tell – they were still expected to pay their autonomo unless their taxes were up to date. Even if they were in the happy position of being up to date on everything, many people had their autonomo payments taken from their accounts, and have not been reimbursed.

Alison received a little help from the government, but not until early in May – almost seven weeks after the State of Alarm was first announced. She also knows of other people who received some aid, but none of them know when they will get any more help. And those who work from home have no idea when they will be able to trade again, as at the moment, they are not allowed to admit people to their premises who are not part of the household. They need something to give them hope, and they need it NOW.

The restaurant and bar owners

Originally, the Spanish government decreed that restaurants with large terraces could open on 11 May with 30 per cent occupancy, and open dining rooms on 25 May, again with 30 per cent occupancy. However, there was an outcry from restaurant owners who said, quite rightly, that it wasn’t worth opening for such a small number of covers, since the overheads would be the same, and if there was a change in the weather, they couldn’t allow the diners inside to shelter from wind and rain.

Clearly, there is a total lack of joined up thinking by the government, and it seems pretty obvious none of those involved in this decision has any idea of the practicalities of operating in the food and hospitality sector.

I spoke to the owner of four businesses in the Northern Costa Blanca. He has an unusual Christian name, so let’s allow him to remain anonymous, and call him Jose. He has no illusions as to the reason why the terraces are able to open:

It’s not because it’s safe – it’s because they don’t want to keep paying unemployment benefits. And now they will say we don’t need it, because we can open and bring in our staff to work.

 

Since Jose’s businesses are in a different health sector, he can’t legally travel from home to work, so for now he’s staying closed. The resort area he operates in depends for 70 per cent of its trade from tourists, and nobody is allowed to travel anyway, so they’re hardly likely to be beating down the doors. It makes more sense economically and practically to stay closed, at least for the time being. As Jose colourfully puts it:

What are we supposed to do with our customers if the weather changes to cold, wet or windy? Kick them off the terraces between courses? That’s not good for business. These bureaucrats think we are idiots!

 

It’s early in the season to be certain of good weather, so realistically, most bars and restaurants can only open during the day. It’s better than nothing – but only just. And there is the danger that profit margins will evaporate as prices fall in the bid to bring in customers. Maybe things will be better when the dining rooms can also open, but it seems increasingly likely that many bar and restaurant doors will never open again, unless something is done to help. In Jose’s experience, that’s not likely.

Steve owns a successful cafe on Gran Canaria, but because of incompetence on the part of the civil servants, his business was classed as a bakery, not a cafe. As such, even though the mistake is an obvious one, it’s made it very difficult for his staff to sign up for ERTE, because it’s only available for staff of businesses who are compelled to close, and that does not apply to bakeries. Again, because he has some tax debt, Steve is unable to claim any government aid at all.

Another operational problem he faces is that even though he has a terrace and could open his premises, it’s part of a commercial centre, so it will be at least 25 May before he can re-open – if at all. Rather than being sympathetic to his situation, his landlady is refusing to allow any leeway on rent. As Steve says:

What’s been portrayed to the world’s media is nothing like what’s really happening on the ground. For most SMEs and autonomos, there is no help whatsoever. What is available is difficult to access due to the usual bureaucracy and the difficulty of obtaining paperwork because of constriction of movement.

If that sounds familiar, that’s because it’s the same story toy manufacturer Amy from Catalonia was telling Spain Life Exclusive in early April. Essentially, although some people have received some help, the vast majority have had nothing yet, and are unlikely to be able to access anything now that businesses are gradually opening up again. For those that do open, it could end up costing them to provide their services, thus exacerbating their financial situation.

Rob, who owns a restaurant in the Jalon Valley, North Costa Blanca, is busy getting ready for service again. He has received some help from the government, because his taxes were up to date, but he says he feels sorry for those who have received nothing, because they are the ones who really need help. His main concern now is keeping his clients and staff safe.

Governments all over the world don’t know how to keep safe and what to do. Every day there is a new vision of what will be best. It’s up to us to be responsible for our safety and that of our staff and our guests.

Rob’s experience raises a point which needs addressing right away. If a business can’t pay its full tax liability when they are open, how can they be expected to pay it when they are closed? Since there are punitive fines for those who are late with their payments, it follows that if they had the money available, they would pay. It would seem that what aid is available is going to those who could possibly manage without it, because Rob mentioned that he and several fellow business owners received more than they expected. It’s good to know that some of the promised aid is finding its way to Spain’s businesses, but why is it dependent on having zero current tax liability?

It’s almost as if the government wants SMEs and autonomos to go under, and that’s a very short-sighted, even suicidal, attitude to take. The coffers of the Spanish government are known to be severely depleted. By allowing businesses to fold without aid, they are effectively cutting off future streams of revenue into the public purse. Spain needs to get back to business, and this is not the way to do it!

As we’ve already seen, those who work from home and restaurant, cafe and bar owners don’t feel they have had any support from the government.  This is despite the announcement of a €200 billion financial aid package on 17 March, just four days into a lock-down which has now lasted for almost nine weeks, with no realistic chance of a significant change in circumstances in the near future. Has the hotel industry – the lifeblood of Spain’s tourism niche – fared any better? Not according to the people we’ve been in touch with.

The hotel owners

Adele owns a small, popular boutique hotel in one of the Northern Costa Blanca’s quieter coastal resorts. While all her staff have registered for ERTE, none have yet received any cash from the government. As for Adele herself, she hasn’t bothered applying for autonomo aid, because the paperwork is too extensive to justify the return. She has, however, been offered favourable terms on a loan from the bank, and this is how she’s managing for now. Without it, she feels her successful, well-established hotel would have to close. That would be heart-breaking, as the hotel has recently been extended to offer more rooms and more public spaces.

Adele is lucky to have a good trading relationship with her bank and a successful business, and her case further underlines last month’s findings that the private sector are being more flexible and forthcoming with practical aid than the government. Essentially, nothing has changed in the last five or six weeks. Yes, more people have accessed aid, but even more are in a worse financial position than at the start of lock-down. Many people are in despair at the arrangements so far for re-opening. Adele is strong in her condemnation:

It’s just a trap to businesses to make the economical situation in Spain look better to the outside world. No business can open and sustain itself without clients or revenue, especially hotels. We have no tourists, we can’t even go out of our own health authority area, but they can say they are getting businesses up and running again. It’s another lie, to cover up their failure to act quickly enough at the start of the Covid-19 pandemic.

Strong words from a very disgruntled hotel owner, and another repetition from previously. The government’s actions are more about looking good in the world’s media than helping the businesses at home that so desperately need it.

Maria, who owns a hotel in Moraira, is pretty much of the same opinion as Adele, and also feels very strongly that the government has not lived up to its promises to help businesses to ride out the Covid-19 storm. While her staff are being paid under the ERTE scheme, she ‘pities’ anyone who cannot access this help, such as autonomos.

Maria feels the government directives on re-opening are not very practical, and are mostly impossible to comply with, especially for the hospitality sector. This again suggests that those making the rules have little to no experience of the business sectors they are issuing directives to. In Maria’s opinion:

We need concrete advice, and technically-based explanations for the crazy and almost impossible measures they are imposing on us for opening. We’ve had very little advice or help so far, and I don’t see us getting any more going forward.

For some autonomos, the lock-down has actually brought in more work, so they have thankfully not needed to access the almost non-existent government aid. Sarah is a writer from Alicante, and her latest project has been writing material for online courses. With so many people being forced to stay at home, demand for these has gone through the roof, and Sarah has found herself working full time to keep up with demand, rather than her usual part time hours.

It’s good to know that it is ‘business as usual’ for some of Spain’s SMEs and autonomos, and I was determined to report some happy news, but the truth is, the Spanish government has failed to keep its promises. It failed in March, and it’s failing still. It would seem that most of the so-called ‘dynamic measures’ and ‘special packages’ designed to help Spain return to work and get back to business as usual are based on cover ups and badly thought out, impractical solutions.

There’s something else that business owners need to be aware of, which could be a source of concern in the future. Maria, a lawyer in Alicante, says there is no clear guidance on the measures business owners must take to keep their staff safe while they are working. There are no laws in place to protect workers from infection, which leaves entrepreneurs open to the possibility of being sued, should any of their employers become infected with Covid-19 in the course of their work.

This glaring omission is not widely known, because everyone is being encouraged to get back to work as soon as possible and to remain upbeat about the recovery from lock-down. However, legal professionals are conflicted, because they wish to offer their clients the best advice for their circumstances. So what is Maria’s advice to any small business owner who is still trying to decide whether to open now or wait a while?

I recommend they stay closed, and if they really need to open, use tests, follow guidelines to minimise the risk of infection for their staff. What employers need to realise is that in Spain, the judge will always come down on the side of the workers, so be aware of that when deciding whether to open or remain closed.

Our message to Spain’s government in April was Show us the Money now and look after SMEs and autonomos as you promised, with the world’s media as your audience. Nothing has happened, and for most SMEs and autonomos, things are decidedly worse. We’re not asking them to Show us the Money now  – it’s clear there is no cash to flash.

Those who supported the government’s measures initially realise now that there was no ‘financial rescue,’ and that the promises made on 17 March have proved as empty as the Spanish exchequer. Spain’s SMEs and autonomos are disillusioned, depressed and in debt.

So, Señor Sanchez – what are you going to do about it? How are you going to get Spain working again? And when? And this time, let’s have the truth. If you don’t know what to do, here’s an idea. ask the people, listen to what they want, and act on it. Maybe then we can make progress, because right now, nothing is working – least of all the small business owners and autonomos who are so vital to the Spanish economy.