SHARE
COPY LINK

ECONOMY

Spain unveils ‘Recovery and Resilience’ rescue plan to create 800,000 new jobs

Facing resurgent virus infections, Spain's government unveiled a recovery plan aimed at yanking the country out of its worst economic slump in decades.

Spain unveils 'Recovery and Resilience' rescue plan to create 800,000 new jobs
Photos: AFP

Spain plans to create over 800,000 new jobs in the next three years with aid it will receive from an EU rescue plan to help the virus-battered economy, Prime Minister Pedro Sanchez said Wednesday.

The country will use the 140 billion euros ($165 billion) in aid from the European Union between 2021 and 2026 to boost its economy, which has been hit hard by the Covid-19 pandemic, he said, unveiling the government rescue plan. 

This plan should be considered “a road map for the modernisation of our country in the next six years” which aims to “transform the hard blow of the pandemic into an enormous opportunity,” Sanchez said.

Spain will use a first block of 72 billion euros between 2021 and 2023 to finance “projects which can be executed in three years and which favour the modernisation and the creation of jobs,” he added.

Nearly a third of the all the money received from the EU will go towards the economy's digital transformation while over 37 percent will be used to transition to greener energy sources in alignment with targets set by the European Commission, Sanchez said.   

READ ALSO Finding work in Spain after Covid: the most in-demand jobs

Recession


 

The pandemic has pulverised Spain's tourism-dependent economy, with the government warning Tuesday that GDP would fall by 11.2 percent this year, down from a previous prediction in May for a 9.2 percent decline.

It sees the unemployment rising to 17.1 percent this year, from 14.1 percent last year, and will only drop to 16.9 percent in 2021.    

Spain plunged into recession in the second quarter when its economy tumbled by 17.8 percent due to the pandemic, after falling by 5.2 percent in the first quarter.

A recession is commonly defined as two consecutive quarters of a contraction in GDP.

Historians say only Spain's 1936-39 civil war hit the economy harder.   

The government has been spending four billion euros a month on a furlough scheme in a bid to avoid massive layoffs, especially in sectors hit hard by the pandemic like tourism.

Spain has been hit by one of Europe's worst outbreaks. The virus has now killed over 32,000 people and infected more than 800,000 nationwide.    

The European Union in July agreed an historic 750-billion-euro rescue plan to help the bloc's economies face the damage caused by the pandemic.

READ MORE: 

 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

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).

SHOW COMMENTS