As coronavirus cases continue to climb in Spain, the government on Thursday announced a relief package to deal with the growing health and economic emergencies.
Speaking via video conference, Prime Minister Pedro Sánchez of the Socialist Party (PSOE) said his government will inject €1 billion into the health system and transfer a further €2.8 billion to regional authorities to help them shore up their healthcare services.
The announcement came as the number of infections in Spain rose to 3,000 and deaths reached 84, with a further 189 people declared as having recovered from the Covid-19 disease. Meanwhile, investor fears caused Spain’s blue-chip Ibex 35 index to plunge by a record-setting 14.06%.
Sánchez said that besides the health package, the government will also introduce measures to provide economic relief to businesses, including a six-month moratorium on tax payments for small and medium enterprises (SMEs) and the self-employed.
“This is an important measure that will facilitate the injection of €14 billion into the productive system,” said Sánchez, whose Deputy Prime Minister Pablo Iglesias is currently quarantined at home after the latter’s partner, Equality Minister Irene Montero, tested positive for the coronavirus.
The travel industry will also be eligible for a €400 million credit line from the state-owned lender Instituto de Crédito Oficial. Hotel occupancy rates are already down by 80% in the Mediterranean provinces of Valencia and Castellón, while travel agencies are being flooded with cancellations, according to Eva Blasco, president of the business association CEV Valencia. This week Valencia authorities decided to postpone the world-famous Fallas fiestas to avoid creating large crowds.
The sudden health crisis is rapidly altering the economic and political scenario in Spain, where only a week ago it would have seemed impossible for the center-right party Ciudadanos (Citizens) to offer Sánchez support to get his budget passed. Yet that is what happened on Thursday, when Ciudadanos leader Inés Arrimadas said her group would be willing to support an emergency spending plan. Sánchez quickly took up the offer with a call for “an extra-social budget.”
“We are going to analyze all the measures that the opposition suggests and which seem beneficial for the population, in light of this situation that is new to the world and for which we have no instruction manuals,” said the Socialist leader, who heads a coalition government with the left-wing Unidas Podemos.
The sudden health crisis is rapidly altering the economic and political scenario in Spain
The PM said measures have also been introduced allowing state agencies to purchase basic goods and services to ensure there are no shortages. Supermarkets have seen a spike in panic shopping this week, particularly in Madrid.
On Thursday Sánchez recommended remote working and the closure of schools across the country, not just in the high-transmission areas – Madrid, La Rioja and parts of the Basque Country. He also said people should avoid travel whenever possible.
“We all have an opportunity to do something very important for the others, to follow official recommendations in our personal and family space, and to act responsibly and with discipline,” he said. “We will overcome this. Spain will recover its vitality, but we need to minimize the effects and that is the goal of these initial measures, and of those that will follow.”
Asked whether there are plans to place the Madrid region in lockdown, the government leader avoided a direct answer. “We need to convey calm and serenity,” he said. “We will take the measures that need to be taken in coordination with regional governments and in line with experts’ recommendations.”
English version by Susana Urra.