Spanish Prime Minister Pedro Sanchez announced a plan to revive the economy of his country affected by the Covid-19 crisis, according to which he will create more than 800,000 new jobs as a result of the injection of European funds worth 140 billion euros.
Pedro Sanchez added, during a speech from Moncloa Palace, that the plan represents “a road map to modernize our country in the next six years”, “to transform the exorbitant cost of the pandemic into a tremendous opportunity.”
Creating more than 800,000 new jobs in three years
“Madrid will use between 2021 and 2026 the resources allocated by Brussels,” Sanchez explained, “and promised to” create more than 800,000 new jobs within three years “in the fourth economy in Europe, which witnessed a significant increase in unemployment figures since the adoption of a strict stone in the spring.
Spain will be the second most beneficial country in the European Union after Italy, as it will get 140 billion euros, half of it in support, and the other half in loans.
“Recovery and Adaptation Plan” investments
The Prime Minister stated that the “recovery and adaptation plan” investments would allocate “more than 37 percent” to environmental mobility and “about 33 percent” to digital transmission, in compliance with the goals set by the European Commission.
He stressed that “this is not about restoring the GDP that was toppled by the pandemic, but rather about developing it in a new, more sustainable way.” Spain was late in announcing the plan, with Italy and France submitting their plan in September, and Germany in June. However, the government of the Spanish alliance between the socialists led by Sanchez and the radical left represented by “Podemos” wanted the presentation of the plan to coincide with the announcement of the state budget for 2021, and it was late.
Mechanisms for implementing the recovery plan investments
The minority government in Parliament has been pressing for weeks on its potential allies to support the budget, which it considers necessary to start investments in the recovery plan. – “Great doubts” – in addition to the environmental and digital transition, the plan will also focus on social and regional cohesion, that is, combating poverty, supporting rural areas, and gender equality in the labor market. The first installment of 72 billion euros will be allocated between 2021 and 2023, and the amount in the first year alone will be 27 billion euros.
The context of great doubts
Thanks to the recovery plan, Madrid hopes to achieve 2.5 points in GDP growth within three years, according to Sanchez. However, the government accounts control structure stated that the plan comes in a “context of great uncertainty” and that the expected profits in the growth rate will only be realized in “favorable conditions.”
Spain’s GDP will decline by 11.2 percent this year
In a separate reference to the crisis in Spain, which is related especially to tourism, which is important to the economy, the government announced Tuesday that Spain’s gross domestic product will fall 11.2 percent this year, two points more than expected in May. Unemployment will rise to 17.1 percent, similar to the general deficit, which will reach 11.3 percent this year.
Public debt exceeds 110 percent of GDP
Public debt exceeded 110 percent of GDP in the second quarter and continues to rise in view of the heavy public expenditures allocated to alleviate the economic and social shock. Between April and September, the government spent 4 billion euros a month to fund a large partial unemployment plan, in an attempt to avoid layoffs, especially in the tourism and hotel sector, which accounts for 18 percent of the economy.
The second epidemic wave affected the economic recovery efforts, as the Spanish government had to impose a partial quarantine in Madrid since Friday.