THE Spanish government has announced that it intends to invest €150 billion as part of the coronavirus recovery effort.
According to El Pais, Pedro Sanchez’s government has designated €150 billion for public investment in 2021 and 2022.
Spain will have to send these plans to the European Commission in order to access the €750 billion coronavirus recovery fund that is currently being negotiated.
€74 billion of this funding will be in the form of investment grants and will not have to be paid back.
This allows the government to earmark the €150 billion for public spending within two years.
The document reads: “An investment and reform plan that centers on a group of large-scale projects with great capacity to transform and modernise our economy and society must be put into place as soon as possible.”
Some ministers told El Pais, that while the document is a good start it lacks detail and a more ambitious vision for the economic transformation of the country.
According to the document, the estimated €150 billion which is approximately 6% of the country’s GDP, is needed to put Spain on the same level as the most advanced countries within the Organisation for Economic Co-operation and Development (OECD) regarding the ratio of public spending.
“This public investment would be an important catalyser for private investment, with the ability to mobilise a total of €500 billion,” the document adds.
The pandemic has hit the economy very hard, with the document outlining how ‘the current forecast indicates a public deficit above 10% of GDP in 2020 and a debt ratio of around 115% of GDP, with an emission of an additional €100 billion in public debt.’