Measures to reactivate the economy and create jobs
This raft of measures is aimed at promoting home renovation and refurbishment, creating a framework that is favourable to business activity, supporting SMEs, protecting the most vulnerable from the economic situation and modernising the energy and financial sectors. The Council of Ministers approved a Royal Decree regarding Measures to Stimulate Economic Recovery and Job Creation, the content of which is the result of talks held over the last few weeks by the Government with the Parliamentary Groups. The document considers the main points of consensus regarding the document of proposals previously drafted by the Government and also incorporates the suggestions made by many of the political parties. The First Vice-President of the Government, María Teresa Fernández de la Vega, thanked the Parliamentary Groups “for their constructive attitude during attempts to reach an agreement” and trusts that “it will receive the unanimous support of Parliament when it is debated by the Congreso de los Diputados [Lower House of Parliament]”. María Teresa Fernández de la Vega added that the Government has sought “to reconcile the legitimate positions of the various parties into a single shared commitment”. According to the Vice-President, the Royal Decree-Law includes measures aimed at re-directing the property sector and promoting home renovation and refurbishment; favouring business activity through administrative and fiscal reforms; supporting small- and medium-sized companies and resolving their liquidity problems; improving regulation of the energy and financial sectors; and, as the distinguishing aspect of this Government, protecting those people most suffering from the consequences of the economic crisis. She said these measures “include the application of a reduced VAT rate for renovation work on homes, an extraordinary IRPF [Spanish Personal Income Tax] deduction for improvement work on principal residences and increased protection against home repossession”. María Teresa Fernández de la Vega explained that this Royal Decree-Law is in addition to another four economic agreements related to the Instituto de Crédito Oficial (ICO) [Official Credit Institute] to speed up the way it works and provide financing and liquidity to businesses. Furthermore, the Council of Ministers approved a Royal Decree to create the Inter-ministerial Committee on Industrial Policy. According to María Teresa Fernández de la Vega, this will combine “support for the growth potential of strategic sectors and the modernisation of traditional sectors” over the next ten years. In her speech to the press alongside the First Vice-President, the Second Vice-President and Minister for Economy and the Treasury, Elena Salgado, underlined the fact that the agreements adopted on Friday form part of the Sustainable Economy Strategy that the President of the Government presented to the Congreso de los Diputados [Lower House of Parliament] on 2 December. Furthermore, she stressed that “all groups with parliamentary representation have worked together on making these agreements a reality”. Main measures Elena Salgado highlighted the initiatives related to promoting home renovation and refurbishment, which form part of the Government’s strategy to achieve a more sustainable economy. These initiatives include the creation of a new temporary IRPF [Spanish Personal Income Tax] deduction for improvement work on principal residences undertaken before 31 December 2012, provided that the work is aimed at improving the energy efficiency or accessibility of the property in question. The tax deduction may reach up to 10% of the cost of the work, with a maximum annual limit of 4,000 euros. Elena Salgado specified that taxpayers with a taxable base of up to 53,000 euros will be able to take advantage of this plan, in other words, 95% of all taxpayers. Furthermore, there will be a reduced VAT rate applied to all kinds of home renovation and repair work undertaken before the end of 2012. In order to foster access to credit for small- and medium-sized companies, the Second Vice-President said that the ICO [Official Credit Institute] will be able to provide direct credits of up to 200,000 euros to SMEs and self-employed professionals as of June. The ICO will assume 100% of the risk of the transaction. Elena Salgado also stated that the period for companies that bill up to six million euros to apply for a VAT rebate on unpaid invoices will be shortened to six months. Furthermore, the requirements for applying for this rebate will be simplified in general for all companies. In order to protect the public, the initiative approved today raises the property exemption limits for mortgage repossession. Elena Salgado also said that an extra-low VAT rate (4%) will be applied to all Long-Term Care services. This measure also includes the exemption, with a limit of 1,500 euros, of amounts paid by companies for travel between the home and place of work on public transport. Other agreements Authorisation for the concession of competitiveness aid in the automotive sector Approval of the 2010-2012 Action Plan for development of the Gypsy Community Approval of the Bill regarding the geological storage of carbon dioxide Agreement to request authorisation from Congreso [Lower House of Parliament] for the participation of Spanish troops in the training of Somali Security Forces in Uganda Agreement to request that the President of the Government files an unconstitutionality appeal against the Region of Valencia Law regarding the district of El Cabanyal
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Measures to reactivate the economy and create jobs
