The President of the Government, Pedro Sánchez, informed the presidents of the autonomous communities this Sunday of the “co-governance” procedure for the relaxation of the confinement measures against Covid-19, as well as the economic measures that he announced this Saturday. Specifically, he has informed them that the Council of Ministers next Tuesday will approve the mobilization of the third section of the ICO line. “They will be a total of 24,500 million for loans to companies at 50/50 that will benefit SMEs, the self-employed and all companies “, according to sources from the Executive.
The Prime Minister, Pedro Sánchez, announced this Saturday that this new section will be approved next Tuesday in the Council of Ministers.
Thus, the Executive has changed its initial plans in this line of guarantees after this Saturday it became clear that it had been decided to reserve almost all the guarantees to SMEs already self-employed, considered the group that is suffering the most from the economic crisis caused by the coronavirus. But finally, sOnly half will go to these entrepreneurs, while the remaining 50% will go to large companies. Once the section is enabled, more than 60% of the 100,000 million euros of the business financing aid program that was implemented in late March will have been consumed.
However, of the 60,000 million mobilized in the three tranches mobilized by the Government, will have reserved 40,000 for SMEs and the self-employed and 20,000 million euros for other companies.
This line is managed by the Official Credit Institute (ICO), in collaboration with financial entities, which assume the cost of the guarantee, which is in a range of between 20 and 120 basis points. The only requirement to access this guarantee is that the applicants were not in default as of December 31, 2019 and in bankruptcy procedure as of March 17, 2020.
In recent statements, Banco Santander advanced that it already had demand for this third tranche and Banco Sabadell added that you have to think about the fourth line of ICO credits.
Similarly, the Government will enable a line of about 4,000 million euros to cover the credits channeled by the financing system based on promissory notes of the alternative fixed income market (MARF).
These 4,000 million euros are part of the extension of the lines of ICO guarantees to the MARF announced last week, with which it is intended to promote the maintenance of financing that occurs in the capital markets that Spanish companies usually resort to and who was practically suspended due to the health emergency situation.
The remaining 500 million euros of this item of 24,500 million euros of guarantees are linked to guarantees to reciprocal guarantee companies by the Spanish Company of Refiancing (Cersa).
RECONSTRUCTION AND CO-GOVERNANCE FUND
Second, it has informed them of the Reconstruction Fund of 16,000 million euros for all the autonomous communities, which claims that “no territory is left behind in the recovery” of the economic crisis caused by the pandemic.
As reported by the Palacio de la Moncloa, in Sánchez’s eighth telematic meeting with the regional presidents since the state of alarm began, Sánchez has informed them that this governance procedure aims to “strengthen consensus and coordination” during the phase of ‘de-escalated’.