Because of the economic impact rendered on the tourism sector by the coronavirus crisis, the Balearic Island’s economy will shrink 3times more than the rest of Spain.
The prediction depicts a significantly sharper scope than the rest of Spain, whose central government prognosticated a drop of 9.2% in Gross Domestic Product.
Francina Armengol, President of the Balearic Island, unveiled the forecast at a press conference on Monday where she related the anticipated loss to the region’s huge dependence on tourism which has greatly been affected by the coronavirus crisis.
With the country’s borders shut and no signs of reopening, the Balearic tourism, as well as the hospitality sector, are suffering an uncertain future.
The Balearic Hotel Association (ACH) which comprises hoteliers in Mallorca, Ibiza, Formentera and Menorca, reports that at least fifty per cent of hotels have decided to remain closed throughout this year.
In awe of contracting huge debts that cannot be compensated with the accustomed inrush of tourists, there is now a rising consent that resuming with no customers would create more damages than repairs.
Also, notwithstanding hotels being able to reopen activity in Stage 1 of the coronavirus de-escalation plan, ACH in the Balearic Islands hold that resuming businesses will be ‘unfeasible’ with no air connectivity.
With regards to these, discerned as a ‘big hit on the island’, Armengol beckons Spain’s Prime Minister, Pedro Sanchez for ‘special treatment to support the region’s economy’.
“It is more urgent than ever that we work unitedly and that the government recognises that the Balearic Islands now necessitates special treatment,” Armengol said.
Amongst her demands is ERTEs – the brief layoff of workers, to be prolonged till October 2020. This she stated would grant higher flexibleness for corporations to restructure themselves during the current crisis likewise guaranteeing that their workers are protected.
“This action will secure workers and the viability of our businesses,” she stated.
Armengol is equally demanding that small-to-medium-sized enterprises (SMEs), which she labels ‘the most relevant to the foundation of the Balearic Islands,’ proceeds to be given entree to commercial benefits.
Presently, SME’s can appeal for finance via-CAEB- the Confederation of Business Associations of the Balearic Islands, who operates with (ICU) -Official Credit Institute to give loans to crisis-hit corporations.