Spain unveils huge economic recovery plan amid pandemic
Spain's prime minister has unveiled a major plan to boost his country out of recession by spending 140 billion euros ($162 billion) of European Union funds to reshape the economy
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Spain’s prime minister unveiled a major plan Wednesday to boost his country out of recession by spending 140 billion euros ($162 billion) of European Union aid to reshape the economy with the aim of creating 800,000 jobs over the next three years.
The program is a response to the sharp downturn caused by the coronavirus pandemic and its worldwide disruption of economies. The plan focuses primarily on getting Spain to transition to green energy and a digital economy, which will take up about 70% of the financing.
“We have to turn this heavy blow into an opportunity,” Prime Minister Pedro Sánchez said, referring to the pandemic's far-reaching effects on society and the economy. “This is the challenge of our generation.”
Spain this week became the first EU country to surpass 825,000 coronavirus infections. More than 32,480 people in Spain are confirmed to have died from COVID-19 and its capital, Madrid, is experiencing Europe's worst second wave of infections.
Spain is the latest EU country to say how it intends to use the bloc’s coronavirus recovery fund, approved last July and designed to help the bloc's 27 nations gain traction in their efforts to break out of recession.
France last month unveiled a 100 billion-euro ($116 billion) plan to yank the country out of its worst economic slump since World War II. Called “France Reboot,” the plan includes 40 billion euros ($46 billion) from the EU recovery plan.
The Spanish government expects the national economy to contract 11.2% this year. In some sectors, such as tourism, the drop could be as much as 25%. Officials expect an unemployment rate of around 17% this year and next.
The Socialist-led government’s strategy aims to reverse the economic decline and achieve growth of 7.2% next year.
It is built on 10 main planks. They include strengthening the public health service, improving public infrastructure, transitioning to green energy and enhancing energy efficiency, developing professional training schemes and accelerating the digital modernization of Spanish industry.
“The world has changed and we need to change, too, to safeguard our future,” Sánchez said.
Another massive spending plan, using national tax revenue and loans taken by the government on international money markets, is expected to be announced next week when the 2021 state budget proposal is published. In preparation for that, the government earlier this week raised its limit on public spending by almost 54%.
The plan announced Wednesday will be sent to Brussels for approval by the European Commission. The national budget will need to get the Spanish parliament’s support.
Spain was allocated 140 billion euros ($162 billion) from the EU fund, roughly divided between grants and repayable loans.
The economic damage will take time to heal, especially in terms of public debt. The Spanish government has already spent billions protecting businesses and jobs. It foresees a budget deficit of 11.3% of GDP this year and 7.7% in 2021.
___
Follow AP’s pandemic coverage at http://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak
___
Follow AP's coverage of climate change issues at https://apnews.com/hub/Climate.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.