Covid effect: Spain needs concrete investment projects to rescue the economy

Spain is fighting an odd crisis it's high on cash, but low on ideas. Spain does not know how to spend.

It's got 166 billion dollars in grants and loans is from the European Union recovery fund for the covid-19 crisis and the crisis is severe.

Spain's economy slumped 18.5% in the second quarter the second worst in the region after the UK. Spain's ailing economy will receive around 140 billion euros or $166 billion out of the EU's 750-billion-euro coronavirus recovery package.

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This includes 43 billion Euros in grants in the next two years alone — this is equivalent to about 8% of Spain’s annual expenditure.

Spain needs concrete investment projects to rescue the economy coming in the way is a prolonged political paralysis.

The country has not been able to approve a full-year budget since 2016, so suddenly absorbing all that extra cash is a challenge. There are concerns over how to set up the machinery to take on this amount of liquidity and this by the way is cash that the Prime Minister Pedro Sanchez fought hard for at an EU summit in July.

He has now put his office in charge and the economy minister is finalising a plan to be presented to Brussels by October 15.There are many countries that would love to be in Spain’s position.

In April when the pandemic began. Over 90 countries requested the international monetary fund for emergency funds and then, you have war-torn countries like Afghanistan and Yemen that have been combating covid-19 amid the raging conflicts. Spain's crisis sounds like a luxury.

(With inputs from agencies)