ZCZC
BCN-05
HEALTH-VIRUS-SPAIN-ECONOMY-AID
Spain approves 11 bn euros in aid to virus-hit firms
MADRID, March 12, 2021 (BSS/AFP) – Spain’s cabinet approved Friday an 11
billion euro aid programme to help struggling small- and medium-sized firms,
and self-employed workers, cope with the economic fallout from the
coronavirus pandemic.
The package, which seeks to prevent bankruptcies, will include 7.0 billion
euros ($8.4 billion) in direct aid, Economy Minister Nadia Calvino told a
news conference.
“It is a question of taking the lead to prevent possible corporate solvency
problems” which could “undermine” Spain’s economic recovery, she said after
the measure was approved during an extraordinary cabinet meeting.
This will be the first direct state aid to companies since the start of the
health crisis last year. Up until now government support has taken the form
of state-backed loans and a national furlough scheme.
The aid package also includes 3.0 billion euros to restructure companies’
debt and one billion euros for capital injections.
Socialist Prime Minister Pedro Sanchez announced the aid package last month
without giving details on how the funds would be distributed.
The tourism sector and other industries hard hit by the pandemic have for
months asked the government for direct aid to help them cope with fixed costs
such as rent and utility payments.
The influential head of Spanish banking giant Santander, Ana Botin, also
appealed for direct state aid to struggling firms in January.
The government had until now rejected this option. Instead it unblocked 116
billion euros in credit lines since the start of the pandemic.
It has also spent 40 billion euros to provide furloughed workers with 70
percent of their basic salary and to help the self-employed, and transferred
24 billion euros to regional governments for spending on health and
education.
Last year, Sanchez’s administration also set up a 10-billion-euro fund to
bail out firms in “strategic sectors” that are considered viable but
experiencing solvency problems.
“Today we have taken another step in the safety net which we have been
deploying to protect our productive sector,” Sanchez said in a tweet after
the cabinet meeting.
Spain’s economy contracted sharply by 11 percent in 2020, one of the worst
performers in the eurozone, with its key tourism sector battered by the
pandemic.
The number of registered jobless in Spain jumped by nearly 23 percent last
year to around 3.9 million, according to labour ministry figures.
The country’s public debt stockpile stood at 1.3 trillion euros at the end
of December, up 10 percent from December 2019 as public expenditure increased
and income shrank.
Spain has been hard-hit by the pandemic, recording over 73,000 deaths from
more than 3.1 million cases.
BSS/AFP/SSS/1955 hrs