Business & Economy

Spanish PM hopes to create 800,000 jobs with EU Covid funds

Madrid, Oct 7 (efe-epa).- Spanish prime minister Pedro Sánchez on Wednesday proposed that 72 billion euros of Spain’s share of the European Union’s coronavirus recovery fund be invested over the next three years to create 800,000 jobs.

Sánchez said the initial investment of over half the money allocated to Spain would accelerate the transformation of the Spanish economy and grow its GDP by 2.5 percent.

“The pandemic requires the acceleration of change that was already needed,” the Socialist Party (PSOE) leader said in his hour-long presentation of the government’s economic recovery plan.

The EU earmarked 140 billion euros for Spain in its emergency coronavirus fund earlier this year.

Two-thirds of the funds will be destined to green and digital transformation over the next three years, Sánchez said.

He said he wanted to use some 27 billion of that in the government’s 2021 budget, kick-starting what he described a six-year “modernization” of the economy.

The prime minister called for the collaboration of his political opponents and for an end to the “partisan shouting matches” in Spain.

The country’s coronavirus response has been hampered by ingrained political animosity.

One of the first issues for Sánchez will be rallying enough parliamentary support to pass next year’s budget. The prime minister presides over a minority coalition with junior partners Unidas Podemos, a left-wing group.

His reliance on a motley crew of Basque nationalist and Catalan separatist parties to pass legislation in parliament has fueled criticism in the opposition benches, which are occupied by the conservative Popular Party, the far-right Vox and the center-right Ciudadanos.

His reliance on Catalan parties has been shaky in the past. In 2019, pro-independence groups helped shoot down Sánchez’s budget proposal. It was the starting pistol for a rocky period of Spanish politics that included two general elections in the space of seven months.

“Politics can go down the path of collaboration or of squabbling. The government chooses collaboration,” Sánchez said in his speech Wednesday.

In its latest assessment, Spain’s central bank downgraded its outlook on the country’s economic recovery and predicted that GDP could fall as much as 12.6 percent in 2020 due to the pandemic.

In a worst-case scenario, unemployment could rise to 22.1 percent next year, the Bank of Spain added.

Spain’s already weakened economy has been further battered by the pandemic.

A government-enforced lockdown kept Spaniards largely housebound between mid-March and May.

The outlook was made gloomier still due to the country’s heavy dependence on tourism, which has accounted for more than 12 percent of the country’s annual GDP in recent years.

Sánchez’s coalition government reopened the country to European tourism at the end of June but the plan soon ran into stumbling blocks as countries like the United Kingdom ended their travel corridor agreements due to resurgences of coronavirus in Spain.

Once again Spain finds itself in the eye of the pandemic in Europe and restrictions have been revived in the capital Madrid due to soaring infection rates.

Spain’s health ministry on Tuesday reported 11,998 new Covid-19 cases in Spain, some 43 percent of which were identified in Madrid.

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