What is the “catastrophic zone” that Madrid is asking for? These are the aid and tax cuts that this implies

Updated: Tuesday, January 12, 2021 3:15 PM

Published on: 12.01.2021 11:11

The capital is insisting that the government declare Madrid a “catastrophic zone” after the enormous effects of the storm “Filomena”. The damage is such that the local authorities consider that extraordinary measures must be taken to mitigate the damage caused by snow and ice. But what does it consist of?

The so-called “ catastrophic zone ”, modified in 2015 by the PP to rename it “ zone seriously affected by a civil protection emergency ”, is a figure envisaged in the regulations to adopt extraordinary measures of repair after a major emergency.

As the law explains, “when an emergency arises whose magnitude requires the intervention of the General State Administration for its restoration”, this “catastrophic zone” can be decreed by the Council of Ministers and to the request of the administrations concerned.

What’s the value for that? The executive must investigate whether there has been personal and material damage that disrupts the living conditions of the population in a certain area or whether some or all of the public services in a specific area have been paralyzed, according to article 23.2 of Law 17/2015 of July 9 on the national civil protection system.

Direct aid and tax cuts

Declaring the “catastrophic zone” has important effects on the pocket of the citizen because it envisages measures for bodily injury, for material damage of a different nature, fiscal measures and also labor and social security.

More specifically, the authorities can establish direct aid to citizens for damage caused to their habitual residence or basic necessities, or compensation to municipalities and businesses for expenses incurred to deal with the emergency. Preferential ICO loan lines can also be established for those affected.

With regard to tax benefits, payment of the IBI or tax reductions on economic activities may be exempt. Moratoriums can also be established in the payment of social security contributions or also suspend contracts in cases of force majeure.

Madrid entrepreneurs ask for help

The president of the Madrid employers’ association CEIM, Miguel Garrido, asked the Executive to create the catastrophic zone to “facilitate aid to victims” since the possibility of ERTE or ICO credits are “beneficial tools” but not “direct aids”, which is what they need.

According to Garrido, alone in the hospitality sector there would have been losses of 70 million euros, although a “huge impact” is estimated in the rest of the sectors.

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