Coronavirus: Spain announces billions in spending to help economy recover

The Spanish government has announced details of further public spending to kick-start the economy, after more than three months of severe restrictions due to the coronavirus, reports CNN.

At a news conference Tuesday in Madrid, government chief spokeswoman María Jesús Montero announced that some 16 billion euros ($17 billion) would be disbursed to Spain's 17 regional governments over the next few months, beginning in July. She described it as "the largest transfer of resources ever made to regions."

How the money will be dispersed, according to Montero:

• At least 9 billion euros will go to the health sector, to add staff and increase capacity to handle any new outbreaks of the coronavirus
• 5 billion will aim to compensate people for loss of income
• 2 billion euros will go to education. Part of the education spending will be to improve online teaching, including the purchase of 500,000 computers and tablets for schools

The government has also approved a final installment of 15.5 billion euros in state credit guarantees to companies and the self-employed, focusing on the tourism and car industries.

This would be in addition to the 69 billion euros already provided in financing guarantees to Spanish business.

Montero also said the government would announce an ambitious plan to revive Spain's vital tourism sector later this week. 

Spain plans to relax quarantine requirements for European visitors starting on July 1, but whether that will apply for British visitors is still unclear because of the UK's own requirement that visitors, including Spaniards, self-quarantine for two weeks on arrival.  

The Minister of Industry, Commerce and Tourism, María Reyes Maroto told the news conference that the new experiment this week of having a "secure air corridor" between the Balearic Islands — which include Majorca, Menorca and Ibiza — and Germany was "proving very useful from a security point of view to test the protocols [to prevent the spread of Covid-19."]

Despite the government spending, which will take public borrowing well above 100% of GDP, Spain's central bank is forecasting a deep recession this year.

Last week it predicted the economy would shrink between 9% and 11.6% in 2020.