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

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.   

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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.

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