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ECONOMY

Spain announces €3.75 billion boost for car industry

Spanish Prime Minister Pedro Sanchez announced a 3.75-billion-euro aid plan for the car industry, a pillar of its economy that has been badly hit by the coronavirus pandemic.

Spain announces €3.75 billion boost for car industry
Photos: AFP

“The government has worked hand in hand with the sector to develop a comprehensive plan that meets their needs and also serves to achieve an urgent ecological transition,” he said in a television address.

The plan, which was officially presented on Monday, “will be financed from a budget of 3.75 billion euros,” he added.   

The plan would set aside money to renew the car fleet, with special attention to electric vehicles. There would be aid for research and innovation and tax incentives to make the sector more competitive.

Aid for the purchase of electric vehicles is in line with the government's ecological transition plan, which by 2040 aims to have all new vehicles in the country “zero emissions”.

The automotive sector is one of the pillars of the economy of Spain, the second European manufacturer behind Germany.   

It makes up 10 percent of GDP, a fifth of Spain's exports and directly or indirectly employs two million people, said Sanchez.

It was also hit hard by the coronavirus pandemic with factories in Spain shut down for several weeks.

Japanese group Nissan recently announced the closure of its factories in Barcelona, affecting 20,000 jobs, directly and indirectly, while US giant Ford announced 350 job losses in its factory in Valencia.

Other countries have announced automobile aid plans such as France, where President Emmanuel Macron announced in late May a recovery plan for the sector of more than eight billion euros.

Sanchez also announced that a tourism sector support plan will be presented on Thursday. Tourism, which accounts for 12 percent of GDP, has been hit badly by the coronavirus crisis.

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ECONOMY

Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).

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