Spain tries to reverse economic slump as unemployment rises

Spanish Prime Minister Pedro Sanchez and Deputy Prime Minister for Social Rights and Sustainable Development Pablo Iglesias present the government’s budget plan for 2021 in Madrid. (AFP)
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Updated 28 October 2020

Spain tries to reverse economic slump as unemployment rises

  • Spain’s jobless rate grew to 16.3% — up from 15.3% in the previous quarter — as 355,000 people lost jobs between July and September, the National Statistics Institute said

MADRID: The Spanish government plans to increase taxes on big corporations and the wealthy and use €27 billion ($31.8 billion) in European grants as it tries to reverse one of the deepest coronavirus-related slumps among developed economies.

The country is grappling with a resurgence of the virus that has claimed at least 35,000 lives. The government says COVID-19 has probably infected more than 3 million people since the beginning of the pandemic, although tests have detected only a third of that number.

A strict lockdown from March to June and restrictions to stem more recent outbreaks have harmed the eurozone’s fourth-largest economy, which is highly reliant on tourism and was only just beginning to recover from the 2008-2013 financial crisis.

Spain’s jobless rate grew to 16.3 percent — up from 15.3 percent in the previous quarter — as 355,000 people lost jobs between July and September, the National Statistics Institute said.

The total number of people out of work is 3.7 million, according to the institute. Hundreds of thousands more are still on temporary furlough schemes paid by the government.

In its effort to contain the economic nosedive, the Spanish government on Tuesday proposed a €240 billion national spending plan for next year that increases subsidies for the poorest, raises pensions, broadens a basic income scheme and provides more funds for the hard-hit health system.

The budget proposal for 2021 is set to be approved Tuesday by ministers in the ruling left-wing coalition and submitted to the European Commission. Then the government faces an uphill battle to obtain parliamentary approval with necessary support from rival parties.

Spanish Prime Minister Pedro Sánchez, a Socialist, called the budget proposal “ambitious” and “progressive,” focused on “rebuilding what the crisis of the pandemic has taken from us.”

Deputy Prime Minister Pablo Iglesias, head of the far-left partner United We Can (Unidas Podemos) in the ruling coalition, said that large companies and wealthy people will be taxed further to fund increased spending on social issues.

“We are opening a new era that leaves behind the neoliberal times of austerity and cuts,” Iglesias said, adding that Spain’s new path will be “one of recovery of labor and social rights, of reinforcing what’s public.”

Some of the investment will require policy shifts and legal changes.

Spain has said that it wants to use all €140 billion that the EU earmarked from its massive coronavirus recovery fund to create 800,000 jobs over the next three years.

But the government says it will first use grants, roughly half of the allocated money, and make use of the low-interest loans for the 2024-2026 period.

 The 2021 spending plan includes the first €27 billion from the EU’s fund expected to arrive in Spain.

The proposal is based on the expectation that Spain’s economy will grow 7.2 percent next year. 

The International Monetary Fund expects GDP to sink more than 12.8 percent this year, more than any other developed economy.


Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

Updated 27 min 32 sec ago

Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

  • The CureVac vaccine successfully passed the first phase of clinical trials in early November
  • The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19

JEDDAH: Saudi Arabia has signed an agreement with a German firm to supply and distribute a coronavirus vaccine in the Kingdom.
Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO) said on Sunday that it had signed the agreement with biopharmaceutical company CureVac on Nov. 27.
Under the agreement, SPIMACO will apply for the necessary approvals from the Ministry of Health and the Saudi Food and Drug Authority (SFDA) to meet the requirements for distributing the vaccine.
The CureVac vaccine successfully passed the first phase of clinical trials in early November. 
Results showed an increase in virus-neutralizing antibodies in all participants who took the dose, and more than 90 percent of patients were shown to have developed antibodies against both the receptors and the COVID-19 spike protein.
CureVac is aiming to lodge a submission to the European Medicines Agency during the first quarter of 2021.
The agreement includes the possibility of extending the supply and distribution rights to the UAE, Kuwait, Bahrain and Oman.
The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19. 
In a statement on Nov. 11, Abdullah Al-Assiri, assistant deputy minister for preventive health, said the government had previously signed an agreement to receive early supplies of two or three different vaccines that were in the final stages of their clinical trials.
“Saudi Arabia will be one of the first countries to receive the vaccines,” he said during an interview on Saudia TV.
Saudi health officials have previously announced plans to offer free vaccinations by the end of 2021 to 70 percent of residents who have not contracted the virus.