Spain debt

Eurozone collapse: Spain’s debt hits record € 83 billion in 2020 as EU stimulus fund stalls | Politics | News

The Bank of Spain revealed on Wednesday that the debt of all Spanish public administrations to their private suppliers reached 82 billion euros in 2020.

The staggering sum is up 39.4% since 2016 and 2 billion euros since 2019, said the bank.

Prime Minister Pedro Sanchez has been urged by the Confederation of Spanish Small and Medium Enterprises to act quickly to resolve the situation “without delay”.

Last March, the Spanish government approved a € 7 billion direct aid program to help SMEs and self-employed workers in the country.

But Spain’s economic difficulties have been further exacerbated by the cessation of tourism, which accounts for 12.5% ​​of the country’s GDP.

The country is also still awaiting the delivery of stimulus funds from the European Union.

Spain’s Economy Minister Nadia Calvino said on Thursday that she expects the country to receive EU funds in the second part of the year.

She told Cadena SER radio station: “We expect (the bailout) to be approved in June and we will receive pre-funding for it in the second half of the year.”

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The slow implementation of the package by the bloc will put further strain on the euro area, as the Commission does not have enough funds to make the first transfer of 13% of the total amount allocated to each Member State.

If the process goes as planned, transfers are expected to begin in the second half of July.

Budget Commissioner Johannes Hahn said on Wednesday that around 45 billion euros would be needed to cover the 13% of the pre-financing – the amount corresponding to non-repayable grants.

He added that the Commission could raise on the markets between 15 and 20 billion euros per month to finance the fund, or about 150 billion euros per year until 2026.

But Spain and Italy alone, as the main beneficiaries of the fund, would already absorb nearly 20 billion euros in subsidies.

So far, a total of 17 Member States have approved the EU own resources decision, which will allow the Commission to borrow the € 800 billion.