A STARK future has been predicted for thousands of restaurants across Mallorca.
According to the Confederation of Business Associations (CAEB), one third of eateries will permanently close this year due to Spain’s coronavirus crisis.
Although a proportion have entered an ERTE, a temporary lay off of workers, establishments that have chosen to remain open are reportedly struggling to stay afloat.
Significant loss of profits are attributed to the lack of visitors on the island, as well as the commitment to keeping employees on a temporary contract.
“Six month contracts are unsustainable for many small to medium sized businesses and is a factor that will lead to the demise of many,” said CAEB in a statement.
Although admitting that it is a ‘deeply worrying time,’ the business union has asked the Balearic government to ensure ERTEs are extended until the end of the year.
At present, the financial programmes, which allow employers to lay off or temporarily suspend workers during crises will expire on September 30.
CAEB earlier forecasted a recession for the Balearic Islands if ERTEs were not extended.
Its President, Carmen Planas, said the programme must stay in place until the region’s businesses recover fully.
“ERTEs are a necessary tool to ensure that companies do not suffocate and to defend employment,” said Planas.
She also stated that a ‘high number of businesses were on the brink of collapse’ which would lead to the ‘destruction of both the productive and employment fabric of the islands.’
It comes as the Balearic tourism industry is set to suffer a tremendous blow as its number of coronavirus infections have increased significantly.
Now exceeding the 50 cases per 100,000 inhabitant ratio, the region is likely to be declared a ‘risk zone’ by Germany and would mean less holidaymakers visiting the region.