Monday

13th Jul 2020

Coronavirus

Spain takes 'giant step' on guaranteed minimum income

  • Barcelona. The Spanish government estimates that the minimum income will cost €3bn per year (Photo: Derek Winterburn)

The coronavirus has made things even more difficult for the one-quarter of all Spaniards (12.3 million people) at risk of poverty or social exclusion by pummelling a country not fully recovered from the previous economic crisis.

However, the pandemic has also sped up the implementation of the much-awaited minimum income guarantee.

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Spain's Socialist-led coalition government approved on Friday (29 May) the measure to help 850,000 vulnerable families - accounting for about 2.3 million people.

The minimum income will be firstly applied to vulnerable households with dependent children, as children represent nearly 30 percent of those at risk of poverty or social inclusion in the country.

The income rates, due to start in June, will vary from €461 to €1,015.

The exact amount will be calculated according to the previous year's income and based on individual households' circumstances.

The government estimates that the minimum income will cost €3bn per year.

"[This is] a giant step in the fight against inequality in our country," said Spanish finance minister María Jesús Montero on Friday.

Meanwhile, civil society organisations welcomed the "historic" proposal and urged the government to keep fighting inequality.

"Spain, in line with what European and international institutions have been asking for, has taken a step towards greater social cohesion, reducing the historical debt it maintained with poor families - for having an ineffective and insufficient system of social protection and the fight against poverty," said Liliana Marcos, an expert in inequality at Oxfam.

The minimum income guarantee was a condition included in the coalition agreement between the Socialists and the leftist group Unidas Podemos, after the indecisive results of the November national elections.

Spain already has some 17 similar regional schemes, although they are estimated to only reach 20 percent of their potential beneficiaries nationwide, with strong regional disparities. Both the regional and national schemes will be compatible.

Spain has been one of the most-affected countries by the coronavirus, with more than 27,000 deaths and nearly 285,000 confirmed cases - triggering one of the most restrictive lockdowns in Europe.

As a result, the country's GDP is projected to drop by 9.2 percent this year and unemployment is expected to rise from 14.4 percent to 19 percent.

After travelling throughout the country, the UN expert on extreme poverty and human rights Philip Alston pointed out in February that "far too many people are struggling" in Spain.

"The post-recession recovery has left many behind, with economic policies benefiting corporations and the wealthy, while less privileged groups suffer fragmented public services that were severely curtailed after 2008 and never restored," he said.

Lessons from 2008

The 2008 crisis triggered the an increase of poverty and social exclusion across Europe, registering 118.8 million citizens (23.7 percent of the EU's population) in a vulnerable position in 2015.

Two years later, nine member states still had one fifth or more of the population at risk of poverty or social exclusion - namely Romania, Bulgaria, Lithuania, Latvia, Spain, Estonia, Italy, Greece and Croatia.

The lowest proportions were recorded in Slovakia, the Czech Republic and Finland.

After the 2008 crisis, the debate on a possible European basic income has become one of the hot topics in EU policymaking.

European Commission president Ursula von der Leyen has previously announced that "a legal instrument to ensure that every worker in our Union has a fair minimum wage" will be proposed in her political guidelines - and a public consultation is currently taking place.

Analysis

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This week Spain hopes it may see the longed-for 'peak' of the epidemic - if measures taken so far prove to be effective in the fight against the coronavirus. Yet the government is set to extend lockdown until 11 April.

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Spanish caretaker prime minister and Socialist Party (PSOE) leader, Pedro Sánchez, is expected to win the second investiture vote on Tuesday - after he lost the first attempt on Sunday in an extremely tight result.

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