Spain to apply for EU funds to retrain workers on furlough scheme

Part of the €70 billion will be invested in specific training programmes to improve the employability of workers under the ERTE scheme. [EFE/ Fernando Villar]

Spanish Prime Minister Pedro Sánchez is expected to apply for EU funding to help retrain 900,000 workers on government-backed temporary lay-off schemes known as ERTE, Spanish financial media has reported. EURACTIV’s partner EuroEFE reported. 

If Spain accelerates the roll-out of ambitious structural reforms, it could receive the first of two or three tranches of a total of €140 billion from the EU recovery fund by the end of the year. Half of the money, to be paid out over the next three years, will come in the form of grants, the rest as loans.

Spain’s left-wing coalition government of PSOE and Unidas Podemos has compiled its plans for structural transformations eligible for EU money in a strategic document unofficially known as the blue book. Plans to overhaul the labour market and pension system are in the works.

According to the plan presented by Sánchez this week before parliament, the government intends to apply for part of the €70 billion in soft loans available until 2026 so that these can be invested in training workers benefiting from the ERTE scheme

Recipients of the scheme receive 70% of their previous salary from the state, cannot be fired by their employers and are officially considered employed, meaning they do not feature in the country’s unemployment figures.

Boost employability

Part of the €70 billion will be invested in specific training programmes to improve the employability of workers under the ERTE scheme and help small and medium sized businesses hit by the COVID-19 pandemic.

The document, as seen by financial newspaper Cinco Dias – the final version of which is expected to be sent to Brussels in the coming days – provides more information about the schedule envisaged by the Spanish government.

It assumes the Spanish recovery plan will have to be financed with the €27 billion already advanced – via debt – included in the Spanish general budgets (Presupuestos Generales del Estado) for 2021.

The first disbursements from the EU fund are not expected until at least the second half of the year, particularly as this is still pending the approval of the German Constitutional Court.

[Edited by Daniel Eck and Josie Le Blond]

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