Spain unveils ‘unprecedented’ 200 billion euros coronavirus package

MADRID (Reuters) – Spain announced a massive 200 billion euros ($220 billion) package to help companies and protect workers and other vulnerable groups affected by the spiraling coronavirus crisis.

A member of the Military Emergency Unit (UME) disinfects the HUCA (Central University Hospital of Asturias) during a 15-day state of emergency declared to combat the outbreak of the coronavirus disease (COVID-19) in Oviedo, Spain, March 17, 2020.

Police carried out checks at borders with France and Portugal, turning back foreigners attempting to enter Spain as part of strict measures to stem the spread of the coronavirus in Europe’s second worst-hit country.

Half of the assistance measures, which are worth 20% of Spain’s economic output, are state-backed credit guarantees for companies, and the rest includes loans and aid for vulnerable people.

Spanish stocks rose by more than 6% after the announcement.

“These are extraordinary measures, without precedent in our country’s democratic history,” Prime Minister Pedro Sanchez told a news conference attended remotely by journalists.

Spain will pay benefits to workers temporarily laid off and suspend mortgage payments for those whose employment has been affected by the outbreak, among other measures.

“We want to protect employment and we want companies to know the government will help them,” Sanchez said. “Nobody will be left behind.”

He said the health crisis had put the brakes on the economy, but would not say whether a contraction was on the cards as in countries like France. He said the government would need a new “reconstruction budget” to deal with the aftermath of the epidemic when it subsides.

More than half of jobs in Spain are dependent on small or medium-sized companies in a country with one of the developed world’s highest unemployment rates.

“I have a little saved up, but I have absolutely zero income at the moment,” said Raquel Las Heras, who runs a booth selling lottery tickets in Albacete, in south-east Spain. “If I stay home like this, I reckon I can last about two months.”

Spain’s 47 million people have been under partial lockdown since Saturday night, allowed to leave their homes only to go to work, buy food or visit a pharmacy or hospital, and hundreds of thousands have been sent home temporarily from companies such as Volkswagen (VOWG_p.DE) and Burger King.

The government reported 182 new fatalities overnight, bringing the total to 491 and making Spain the country with the world’s fastest-rising death toll after Italy. The number of people infected rose to 11,178.

Spain shut its land borders on Monday to all but Spaniards, permanent residents and cross-border workers. Trade in goods is not affected. The Balearic Islands – among Europe’s most popular holiday destinations – closed their air space and ports to visitors.

Cars queued to get into Spain at Vilar Formoso in Portugal as Spanish police wearing protective face masks and latex gloves checked identities and turned back vehicles carrying passengers without permission to enter.

Joaquim Silva, a Portuguese man, wanted to drive through Spain to get back to France, where he has lived for more than 50 years.

“It’s terrible because we live there (in France), we have family there, we have health problems that are being treated there,” he said.

Additional reporting by Jesus Aguado, Emma Pinedo and Belen Carreno; Writing by Andrei Khalip and Sonya Dowsett; Editing by Giles Elgood

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