Spain to spend €200bn in bid to offset impact of Covid-19

Spain’s government has announced economic measures worth €200 billion as the country’s economy and healthcare system struggle with the impact of the coronavirus.

Prime minister Pedro Sánchez said the measures amounted to “the biggest mobilisation of funds in Spain’s history”.

Spain is the second most affected country in Europe since the virus struck, after Italy. On Tuesday, the health ministry reported that there were just over 11,000 confirmed cases, 2,000 more than the previous day. Deaths amounted to about 500, although approximately 1,000 people have recovered.

Since the weekend, the country has been in a state of emergency under which the government ordered people to remain in their homes unless they have a specific reason to go out, such as going to work, buying food or medication.

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“These are extraordinary times which require extraordinary measures,” said Mr Sánchez, after the cabinet approved the economic package in a meeting held via video link.

Under the plan, the government is offering up to €100 million in credit guarantees to ensure companies have liquidity.

There will be a moratorium on the payment of mortgages for those whose income has been heavily affected by the virus. Vulnerable groups will be able to delay payment of water and electricity bills and a contingency fund will be created to support the elderly and homeless.

Also, it will be easier for companies to make temporary lay-offs while ensuring that workers affected receive unemployment subsidies until they return to the workforce.

According to the plan, about €80 billion will be provided by the private sector.

“Spaniards must understand that, whether you are an employee or an employer, you will have the support of our government. We will leave nobody behind,” said Mr Sánchez.

Spain’s economy has performed better than many of it neighbours in recent years. But the virus’s impact on a country which depends heavily upon tourism has become a huge concern. Recent cancellation of the annual Fallas festival in Valencia will cost the city €700 million in lost revenue, according to organisers.

What about a vaccine?

Meanwhile, the country’s healthcare system is struggling to cope with daily increases in infections. Of the 11,000 or so people who have been infected, more than 5,000 have been hospitalised. This is exerting enormous pressure on resources, especially in Madrid, which has just under half of the confirmed cases.

Retirement homes have been a particular concern and the Monte Hermoso home in the capital has suffered 19 deaths so far, according to reports.

Under the national state of emergency, private health facilities have been brought under the orders of regional authorities to help relieve the burden. Medical students are being recruited as volunteers in some hospitals across the country to carry out administrative work.

The government has also announced it is investing €30 million in research in an attempt to develop a vaccine and cure for Covid-19, which has also infected at least two government ministers, the prime minister’s wife and presidents of the Madrid and Catalonia regions.