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UPDATE 1-Spain will extend furlough scheme "as long as necessary"

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MADRID, Sept 3 (Reuters) - Spain’s ERTE furlough scheme will be extended “as long as necessary”, Labour Minister Yolanda Diaz told IB3 radio station on Thursday, before talks with unions and employers on the issue scheduled for Friday.

The scheme, which is currently due to end on Sept. 30, provides furloughed workers with 70% of their base salary for the first six months, before dropping to 50% for the following months.

“The key to the mechanism is that it stays. It’s absurd to put an end date on it. I believe that the ERTEs should stay in place. For how long? As long as necessary,” she told IB3.

On Friday, the minister is due to meet union representatives and business leaders in Palma de Mallorca to negotiate the conditions of how to extend the programme.

In a separate interview with La Sexta television, Diaz described the drop in coverage to 50% as “profoundly unfair”.

“It is a substantial decrease in income and we are very interested in correcting it,” said Diaz, who is allied with hard-left coalition partner Unidas Podemos (Together We Can). “We want to maintain the protection at 70%.”

Introduced in March to help workers and employers weather the storm of Spain’s strict coronavirus lockdown, the programme supported around 3.4 million people at the height of the pandemic.

As Spain exited its state of emergency and many businesses reopened their doors, the number of enrolled workers had fallen to just 812,438 people in August, according to social security ministry data.

But Diaz stressed the recovery has been unequal, with 94% of auto-industry employees already back at work but a similar resurgence in the devastated tourist sector still a remote prospect.

Given the weakness in tourism and related industries, and the resurgence in Spain’s coronavirus infections, Diaz said she would prefer not to put a fixed date on the end of the ERTEs.

“They’re working very well. As such, we want to make it a permanent mechanism,” she said. (Reporting by Nathan Allen; Editing by Alison Williams)

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