In addition, financial institutions should maintain the limits on  3  working capital facilities up to that same date for all customers that have a guaranteed loan and comply with the eligibility requirements. This Royal Decree has also extended the insolvency moratorium, which was set to expire on 31 December this year, to 14 March 2021, with the aim of preventing firms that continue to experience temporary, pandemic-related financial difficulties from having to file for insolvency. This measure aims to reduce the risk of viable firms being eventually wound up, with the impact this would have both on the productive system and in terms of job losses. The available evidence suggests that the economic policy measures taken have helped to ease firms’ financing conditions, which contrasts with what was seen in the international financial crisis that began in 2008. It is a consequence not only of the swift and forceful economic policy response, but also of the better financial situation of the banking system and, in particular, of the larger capital buffers built up by the banks in recent years that have enabled them to absorb losses in their credit portfolios. The different nature of the current crisis has probably also been a determinant in this respect. In any event, since 2020 Q2 firms have resorted to debt on highly favourable terms to cover part of the increase in their liquidity needs. Specifically, between February and September, the outstanding amount of corporate sector debt rose by almost 5%.
And although at this stage it is difficult to define the magnitude and scope of these changes, it is essential they be identified promptly, since economic policy cannot provide indefinite support for firms that are headed for a structural reduction in their activity. Rather, it should aim to encourage and support the adaptation of the productive system to the new reality and the efficient cross-sectoral and cross-firm reallocation of resources. Moreover, the outlook for the Spanish economy and, therefore, for the business sector remains very dependent on the still highly uncertain course of the pandemic. Since the beginning of July, the strength of the recovery has been adversely affected by the fresh outbreaks of the virus in our country and, more recently, by the worsening of the epidemiological situation both in Spain and in most of Europe. This has prompted the relatively widespread introduction of new restrictions on mobility and activity in certain sectors. Accordingly, economic activity in this final stretch of the year and in early 2021 will foreseeably be less dynamic than was anticipated in the baseline scenarios published a few months ago by the Banco de España and the ECB for Spain and the euro area, respectively.2 By contrast, the latest news on the availability of a vaccine for early 2021 is clearly positive and, if confirmed, should help raise confidence and rule out the most adverse economic scenarios, even though the effects on activity will not be immediate.