Government approves new measures to boost reconstruction and support for those affected by the DANA

The Council of Ministers has approved the Royal Decree Law which adopts urgent reactivation, reinforcement and prevention measures within the framework of the Immediate Response, Reconstruction and Relaunch Plan in response to the damage caused by the DANA. The new package of measures aims to strengthen reconstruction and to improve and extend support to those affected by the DANA by streamlining existing aid procedures. The new regulation extends and improves protection for companies and the self-employed, as well as aid for affected local authorities, in addition to housing, vehicles, industrial investment, the cultural sector and social services, among others.

To date, the Government of Spain has transferred more than 8 billion euros to administrations, entities, companies and citizens affected by the DANA, which particularly devastated the Valencian Community a year ago, within the framework of the Immediate Response Plan launched by the government. Last September, the European Commission gave the green light to the channelling of 1.24 billion euros of European funds from the Recovery Plan to support the response to natural disasters, through the so-called DANA Addendum.

Financing: 750 million ICO line and guarantees of up to 5 billion euros

With the approved regulation, the catalogue of financial measures of the Official Credit Institute (ICO) is expanded to act swiftly and meet the needs of companies, the self-employed and households in times of emergency or crisis, such as those caused by the DANA storm, both now and in the future. Specifically, the Ministry of Economy, Trade and Business will deploy the ICO line foreseen in the Addendum to the Recovery Plan in response to natural disasters, which will mobilise up to 750 million euros in financing, with 180 million euros in aid for SMEs. It also approves the creation of a new guarantee programme of up to 5 billion euros, available until December 2040, which will provide immediate liquidity to households, businesses and the self-employed affected by civil protection emergencies.

Cessation of activity for the self-employed and deferment of social security contributions

With regard to Social Security protection, this includes the extension of the extraordinary cessation of activity benefit for self-employed workers affected by the DANA who were receiving the benefit as of 31 January, 2025, as well as the possibility of requesting a deferral of Social Security contributions for companies and the self-employed.

The new benefits for cessation of activity, aimed at self-employed workers who meet the requirements set by the Royal Decree, may be received retroactively (to 1 February, 2025), provided that the application is submitted within 21 calendar days following its entry into force. Otherwise, it shall be paid on the first day of the month following the month in which the application was submitted. With regard to the deferral, a reduced interest rate of 0.5% (much lower than usual) is established for the payment of Social Security contributions, which can be requested for the corresponding contributions between the months of November 2025 to January 2026, in the case of companies, and between the months of December 2025 to February 2026, in the case of self-employed workers, provided that they are up to date with payment and do not have another deferral in force.

Extension of aid for the purchase of vehicles

The Ministry of Industry and Tourism is extending until 31 December of this year the 'Plan Reinicia Auto+' for aid for the purchase of vehicles for affected citizens. The Plan has a budget of 465 million euros and involves 1,300 car dealerships. As for the FEPYME Dana Plan, with a budget of 350 million and aimed at small and medium-sized enterprises in the industrial, tourism and services sectors, its scope is being extended to SMEs and startups throughout Spain that submit projects to reduce the impact of climate change.

Housing in affected municipalities

In terms of housing, and once the tasks of re-housing affected families have been completed, it is envisaged that the new State Housing Entity may allocate part of the resources initially earmarked for the acquisition of housing in the affected area to the adaptation of acquired housing or the development of new housing on land decided by the affected municipalities.

It also includes funds to facilitate the relocation of people living in flood-prone areas to safe areas and extends aid to local authorities to carry out works to improve, extend and adapt infrastructure to prevent future risks, especially those arising from climate change and flooding.

Aid for local authorities to rebuild and improve infrastructures

The Royal Decree-Law extends the scope and flexibility of the aid granted to the affected local authorities, allowing for the repair, restoration or reconstruction of municipal, provincial or island-owned infrastructures, equipment or facilities and services, including the repair, restoration or reconstruction of the road network, for up to 100% of the cost. It includes aid to authorities for improvement, extension and adaptation works to prevent future risks, especially those arising from climate change and floods. This means the construction of new municipal infrastructure to prevent damage from flash floods and flooding, and the acquisition of land and housing for flood prevention measures in areas at risk, will be eligible for funding.

Support for the cultural sector

Similarly, the government will continue to support the cultural sector in the affected areas with aid amounting to one million euros, with the aim of promoting the recovery of their activity. The Ministry of Culture grants will go to the 'Salvem les fotos' project at the Fundació Horta Sud de la Comunitat Valenciana, the Academia Valenciana del Audiovisual, the Fundació pel Llibre i la Lectura, the Federación Valenciana de la Industria Musical, the Associació Valenciana de Professionals de la Cultura and the Associació de Professionals de la Il-lustració Valenciana. The new grants are in addition to the more than four million euros that the Ministry of Culture has granted over the last year to the film, book, cultural heritage, performing arts, music and visual arts sectors affected.

Social services

The Ministry of Social Rights, Consumer Affairs and 2030 Agenda has extended the deadline for the implementation of the 40.5 million euros that were given to municipalities for basic social services until 31 December 2026. This extension also applies to the 5.7 million euro grant from the Ministry to third sector entities, channelled through the Third Sector Platform, to strengthen the social services of the municipalities, as well as the 1.7 million euros in aid for 26 affected municipalities in terms of accessibility granted by the Royal Board on Disability.

Non official translation