Spain is to receive a €140 billion bailout over the next six years via the EU Coronavirus recovery fund.
The amount which equates to around 11.2% of the country’s gross domestic product (GDP) will be the lion’s share of a €750 billion EU stimulus package which will be shared among the 27 member states.
However, it will be Spain and Italy who will be the main beneficiaries of the package with their economies hit hardest during the pandemic. Italy will receive a total of €127 billion in loans along with €82 billion in grants.
Greece’s Prime Minister Kyriakos Mitsotakis hailed the deal as a “national success” after it was confirmed that the country will receive over €72 billion to help it negotiate the Coronavirus fallout.
Over half of Spain’s funding will take the form of low-interest loans with €72.7 billion in grants that will not have to be paid back.
The country’s Prime Minister, Pedro Sanchez hailed the agreement as a “great deal for Europe and a great deal for Spain".
Sanchez who initially demanded €77 billion in grants said, “There is no doubt that today, one of the most brilliant pages in EU history has been written.
“Europe laid the basis of a response to the crisis of COVID without losing sight of tomorrow”, said the leader of the Spanish Socialist Party (PSOE) at a news conference on Tuesday following the landmark deal.
Spain’s leader said that the €72.2 billion over six years was nearly 10 times as much as the country received over the same period in EU cohesion funds which were used to allocate money to minimise regional disparities.
He confirmed that the funds would be used to encourage investment in the country’s economy including digital transformation, greener energy sources and education.
The new financial package was approved by the bloc’s 27 leaders following five days of tense negotiations.
Despite a number of ‘frugal’ countries opposing the creation of the package and the inclusion of direct transfers, the final proposal of €360 billion in loans and €390 billion in grants was agreed.
Image Credit: European Parliament
July 22, 2020