• Not only hard-hit countries like Italy and Spain, but also France and Germany have already taken extraordinary measures to alleviate taxes, social contributions and mortgage payments.
• Since the start of the COVID-19 crisis, ASUFIN’s requests to the Spanish Government have been a mortgage moratorium; aid for vulnerable groups that have difficulties paying their rent; and economic relief measures for self-employed workers and professionals.
• The mortgage moratorium, already approved by the government, must have an effective and agile practical application
25 March, 2020. The COVID 19 virus is spreading through Europe, affecting not only our physical health but also our economic health. Member State governments are rightfully taking drastic and unprecedented measures to manage the damage caused by the crisis to the best of their abilities. EU leaders have compared the current situation to a war-time scenario. ASUFIN fully supports this notion and urges the European Union to articulate a collective response by coordinating a moratorium on taxes, social contributions and mortgage payments across all Member States.
On Tuesday 17 March, the Spanish government approved a moratorium on mortgage payments. The measure applies to those households where mortgage payments, including expenses and utilities, exceed 35% of the family unit’s net income. The measure equally applies to those who have become unemployed as well as the self-employed that have suffered a substantial loss of income, due to the crisis, and to families whose income prior to the moratorium did not exceed three times the IPREM (an indicator for granting state aid and subsidies).
AGILITY IN GRANTING THE MORATORIUM
Upon approval of the measures, ASUFIN has urged financial entities to prioritize processing of the moratorium, to be effective as swiftly as possible for those affected. Similarly, we pushed for all procedures to be carried out online and for the services to be available by email or telephone, in line with the severe crisis-restrictions currently in place.
Asufin has negative experiences with the application of the Spanish Code of Good Practice, which was implemented in 2012, after the last crisis, to facilitate restructuring and payment of people in complicated situations. Overly bureaucratic and tedious processes have caused excessive delays. In fact, data from the first semester of 2019, in correspondence with the 14th report of the compliance commission of the Code, shows that less than half of all requests for debt restructuring and payments have been processed.
ASUFIN urges the European Commission to coordinate Member State guarantees in support of tenants who have also been affected economically by the by COVID-19 crisis, taking into account that many landlords are private landlords, unable to offer moratoriums to their tenants. In Spain, moratoriums are only given for the property the owner actually lives in. Investment properties do not fall within the scope. Therefore, these mortgages depend even more on the continuation of rent payments. ASUFIN President, Patricia Suárez, said: “We welcome the Government’s financial measures so far to help families to survive the crisis economically. However, more needs to be done and we need to understand that housing is not only a basic necessity of life but a fundamental right. Families will need rental support”. Only this way can we guarantee that landlords who do not fall within the scope of the moratorium will be able to pay the mortgages on their properties.
ASUFIN launched its campaign demanding measures to alleviate rent problems. More than 4,500 signatures have already been collected on the platform change.org/EmergenciaHipotecasCoronavirus.
FINANCIAL SUPPORT FOR THE SELF-EMPLOYED, PROFESSIONALS AND SMALL BUSINESS OWNERS
Lastly, ASUFIN pushed for financial relief aid for the self-employed. The Government has only approved a direct measure that consists of facilitating access to discontinuation of activities (effective unemployment), under certain conditions. The unemployment allowance for this group is up to about 660 EUR per month, in 80% of the cases. This measure applies to small entrepreneurs and professionals whose activities have been suspended due to emergency measures or to those who can prove a loss of 75% of their income. ASUFIN asks for the application of a moratorium on social contributions by the selfemployed as well.