The process of reopening Spain has been dubbed, rather ominously, “Operation New Normality.”
By Nick Corbishley, for WOLF STREET:
“Is there any light at the end of this long dark tunnel?” That’s a question many people are asking themselves in Spain, whose government has implemented one of the most draconian anti-Covid lockdown regimes in the world and is now beginning to loosen some of the restrictions. Sunday was the first time in 43 days that children were allowed to venture out, albeit only for a maximum of one hour. And only if they were accompanied by one adult. And under the age of 14.
It was hardly a return to normality, but after six long weeks of being cooped up at home, most of the children and their parents were happy to take up the invitation of a little fresh air, a few rays of sunshine and some open space. For the first time in a month and a half, the streets and squares of villages, towns and cities across Spain were alive with the sound of people.
This being Spain, not everyone obeyed the government’s slightly loosened rules. From the vantage point of our balcony, in the Exiample Dreta district of Barcelona, my wife and I could see many children being shepherded by both of their parents. We could also spot groups of families together as well as opportunistic childless couples who were hoping to blend in with the crowds unnoticed. Some got away with it. Others were stopped by the police and given a stern warning or fined.
Since the lockdown began in Spain some 740,000 people — the equivalent of 18,000 per day — have been fined for breaking the government’s Covid-19 rules, according to El País. That’s three times more than in Italy and almost 200 times more than in the UK during roughly the same period. The only EU country that has dished out more fines is France, whose police issued over 900,000 fines in a five-week period.
In France administrative fines can range from €135 to €3,750. In Spain they can reach as high as €600,000, a spine-chilling figure that was set by the previous Rajoy government in its overtly authoritarian Law on Citizen Security — popularly dubbed the “Gag Law” for its sweeping attacks on freedom of expression. Passed in 2015, the law was primarily intended to crack down on rising social and political protest. Today’s governing parties, then in opposition, pledged to overturn the law. They didn’t. Instead, they have kept many of the most draconian measures in place and are now making liberal use of them.
If parents and children do not follow the strict criteria for outings, those outings will be withdrawn, the government warned. Surveillance and controls will be stepped up if necessary.
As countries around the world are gradually realizing, it’s a lot easier to go into lockdown than get out of it. In Spain, where the number of new cases is averaging around 1,000 a day, the process of reopening the country has been dubbed, rather ominously, “Operation New Normality”. It has been divided into four phases:
Phase Zero. Starting on May 2, this phase is mainly about preparation. Small service providers will be able to open but only if they offer appointments, such as hairdressers, dentists, florists and opticians. Citizens will finally be able to go outside for a spot of individual exercise or for a solitary stroll. But as far as I can tell, the government is still debating about when to let couples go outside together, something we’ve not been able to do since the lockdown began. This doesn’t mean that couples aren’t venturing out together, just that by doing so they risk getting fined.
Phase One. In this phase, scheduled to begin in most provinces on May 10, social contact will be allowed between people in the same city who are not deemed to be at risk of the virus. But there will still be no travel between provinces without justification (such as work). Sidewalk cafés will be able to open, albeit at 30% of their usual capacity. This means that people will be able to have a drink with friends on a terrace. Hotels will also be able to reopen, but without common areas available to guests, such as the buffet.
Phase Two. With the arrival of phase two, citizens will be able to enter the inside of bars and restaurants, again with a limit of 30% of capacity. Cinemas, theaters, auditoriums, monuments and exhibitions centers will also reopen with a similar limit on capacity. At outdoor events, up to 400 people will be allowed, provided they are seated.
Phase Three. Loosely scheduled to take place mid-June, this phase will include the relaxation of mobility restrictions, albeit while wearing masks outside of the home. Visits to senior homes will finally be allowed, under strict conditions. Bars will be able to open with a limit of 50% of capacity. Travel between provinces will be allowed but only if they’re both in phase three.
The markers for each shift of phase will depend on:
- The strategic capacity of the health system.
- The epidemiological situation in each province, including the infection rate, testing (which is still broadly limited to people with severe infections or essential workers) and other indicators.
- The degree of collective compliance with the protection measures.
- The evaluation of mobility and socioeconomic data.
If everything goes according to plan, which is far from likely given the complexity of the task and the volatility of the situation, the country will return to some semblance of normality by the end of June, says the government. With Spain’s economy facing its worst crisis since the civil war (1936-39), according to the ECB’s Vice President and former Spanish Economy Minister Luis de Guindos, time is of the essence.
In the first quarter of 2020, Spain’s unemployment rate rose from an already high 13.8% to 14.4%. That figure does not include the 3.7 million workers who have been furloughed by their employers and are currently receiving or waiting to receive government benefits worth 70% of their normal salaries. Nor does it include the more than one million self-employed who have either completely halted their activity or have lost more than 75% of their earnings and are now receiving or waiting to receive benefits.
It’s impossible to know how many of these people will go back to work once the restrictions are lifted, but if you include these two groups of “temporarily” unemployed in the statistics, Spain’s unemployment rate is actually closer to 40%.
Also not reflected in the statistics are the hundreds of thousands of self-employed workers who have taken a massive hit to their income, in some cases as high as 60-70%, but don’t qualify for government assistance. Many of my self-employed friends and contacts are in this situation. Then there are the untold thousands of people who have applied for government assistance but still don’t know if they will ever receive it. They include my wife, who stopped working on March 14, the day the handmade-jewellery store she works for closed due to the lockdown.
Within days, the store’s owner, a German jewellery designer, had applied for my wife and her Portuguese colleague to be furloughed. The owner also tried to register for the government’s self-employed assistance program and take out a government-guaranteed emergency business loan from her local bank. Six weeks on, she still hasn’t received a response from the government and is still waiting to find out if she qualifies for the business loan. Her two workers, including my wife, haven’t received a penny since March 15.
“Last time I went to the bank, the manager told me he had 200 signed applications for emergency loans sitting on his desk,” the owner says. “Only 30 had been given the green light by the government.”
Even in the best case scenario, in which she receives the government assistance (maximum: €660 a month, a tiny fraction of what she was making) and the bank loan, she knows that the prospects for her 15-year old business are pretty bleak. “My landlord has told me I don’t have to pay the rent for the shop while it’s closed, but I will have to pay the arrears once the shop reopens,” she says. “I will also have to pay outstanding taxes. To have any chance of doing all that, I will have to go into debt, something I never wanted or planned to do.”
Given that roughly 60% of the business’ customers were tourists, in particular big-spending Americans who were enchanted by the glistening bracelets, necklaces and earrings that were designed and crafted in front of them as they browsed (some of which are on view at Instagram), business is unlikely to boom when the shop reopens. Even when foreign tourists begin to return to Barcelona, later this year or early next, it will not be in nearly the same insane numbers as before.
The same thing is happening throughout Spain (and far beyond). Businesses that were perfectly healthy and viable before the crisis, providing jobs for enormous numbers of people, are now going to have to take on huge amounts of debt at a time that revenues are about to plummet. It’s a recipe for economic disaster. Many will go under. It is one reason among many why the light at the end of this long, dark tunnel is still barely visible. By Nick Corbishley, for WOLF STREET.
Tourism is the “first sector to be afflicted by the virus crisis and, unlike other crises, likely the last to recover from it.” And these economies are still incredibly fragile, even eight years after the last crisis. Read... Tourism in Southern Europe, Accounting for 13%-21% of GDP, is on its Knees. When Will it Get Back Up Again?
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