28th May 2024
Pedro Sánchez
Barcelona News Business Catalonia News Economy & Employment Madrid News Main News

Spain announces its ‘Recovery, Transformation & Resilience Plan’ against recession

Latest: Coronavirus in Spain figures (2 Nov) 

Also read: Details of curfews & restrictions for all regions of Spain during ‘State of Alarm’

Spanish Prime Minister Pedro Sánchez unveiled ‘The Recovery, Transformation and Resilience Plan of the Spanish Economy’ via video-conference on Wednesday, aimed to boost the country out of recession. The plan aims to spend part of the €140 billion of European Union aid agreed for Spain back in July to help rebuild the economy, with the hope of also creating 800,000 jobs over the next three years.

Of the €140 billion agreed for Spain by the EU, it will receive €72.7 billion in grants and the rest in loans during a six year period.

‘We have to turn this heavy blow into an opportunity,’ Sánchez said, referring to the effects of the Coronavirus (Covid-19) pandemic on Spanish society and its economy. ‘This is the challenge of our generation.’

The presentation was made with an online audience of some 200 business figures, union representatives, as well as the ambassadors of EU states in Spain.

Pedro Sánchez
Pedro Sánchez presenting the recovery plan in a video-conference on 7 October 2020. (Pool Moncloa / Borja Puig de la Bellacasa)

Latest figures published on Tuesday in Spain have shown that there have now been over 825,000 confirmed cases of Coronavirus since the start of the pandemic, and an official total to date of 32,486 deaths. The capital of Madrid, currently in partial lockdown, is experiencing Europe’s worst second wave of infections.

The Recovery, Transformation and Resilience Plan aims to be a financial blueprint for the overall spending of the €140 billion, and will be sent to Brussels in a fortnight. Sánchez, leader of the socialist PSOE party, heads up a coalition government with the left-wing Podemos group. In his presentation, he explained that the investment will be focused on 2020-22, before a next general election is due.

ALSO READ (6/9/20): Sánchez seeks ‘unity’ for Spain’s recovery plan, yet PP refuse alongside ‘radicals’

Due to possible delays from Brussels for the arrival of funds, Sánchez also announced that Spain would include €27 billion of the €72 billion that is due to be spent from the fund over three years in this year’s current budget.

Spain plunged into recession in the second quarter when its economy tumbled by 18.5% due to the pandemic, after falling by 5.2% in the first quarter. A recession is commonly defined as two consecutive quarters of a contraction in GDP. Historians claim that only the Spanish Civil War (1936-39) hit the economy harder.

The Recovery, Transformation and Resilience Plan focuses primarily on getting Spain to transition to green energy and a digital economy, which will take up about 70% of the financing.

The overall plan includes strengthening the public health service, improving public infrastructure, transitioning to green energy and enhancing energy efficiency, developing professional training schemes and accelerating the digital modernisation of Spanish industry.

‘The world has changed and we need to change, too, to safeguard our future,’ Sánchez said.

Pedro Sánchez
Pedro Sánchez presenting the recovery plan on 7 October 2020. (Pool Moncloa / Borja Puig de la Bellacasa)

Sánchez also explained that there would be a commission set up in order to administer the spending of the funds, of which he would preside. It would follow his plans of ‘co-governance’ with the regional governments of Spain, with ‘constant dialogue’ with businesses, society and ‘high-level forums on science, digitalisation, energy, water, mobility, industry, tourism, culture and sports’.

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 PSOE-Podemos government’s strategy aims to reverse the economic decline and achieve growth of 7.2% next year. The government has already been spending four billion euros a month on an ERTE furlough scheme in a bid to avoid massive layoffs, especially in sectors like tourism.

Click here for all previous reports on: Coronavirus in Spain

ALSO READ (30/9/20): Spain extends its ERTE furlough scheme to 31 January

ALSO READ (2/8/20): Spain’s GDP fell by 18.5% in second quarter, due to Covid-19 lockdown

 ALSO READ (21/7/20): EU leaders conclude marathon summit with ‘historic’ rescue package

Recent Posts

The ‘lost Caravaggio’ goes on display at the Prado museum in Madrid

News Desk

Spain pledges €1 billion of military aid to Ukraine as Zelensky visits Madrid

News Desk

Israel orders Spain’s consulate in Jerusalem to not assist Palestinians

News Desk

Four dead, 21 injured in Mallorca as restaurant roof collapses

News Desk

Spanish police recover 4th of five Francis Bacon paintings stolen in Madrid in 2015

News Desk

Israel recalls ambassador to Spain over Palestine statehood & threatens ‘serious consequences’

News Desk

Leave a Comment