By Belén Carreño
MADRID, Apr 13 (Reuters) – Spain will continue with its economic recovery plan despite the foreseeable delay in the arrival of support funds from the European Union, financing initial investments through public borrowing, the President of the Spanish Government Pedro Sánchez.
The budget approved by parliament in December allocates 27 billion euros (32.23 billion dollars) to investment spending this year. Sánchez will present to Parliament on Wednesday a broader recovery plan that foresees 72,000 million euros of investment by the end of 2023.
Sánchez detailed projects worth 50,000 million euros, among which stand out 6,800 million for housing rehabilitation and 13,200 million for sustainable mobility, promoting the key industry of the automotive sector.
Spain should receive some 140,000 million euros (166,000 million dollars) from the EU that will help it recover from the crisis caused by the pandemic. About half of the funds will come in the form of grants and the rest will be loans.
The German Constitutional Court has blocked the ratification of legislation allowing the EU to make joint loans, delaying the distribution of funds.
However, Madrid will present its investment plan to Brussels for approval at the end of April, Sánchez said, later than the previous March deadline.
Although it intends to go ahead with its spending plans, Spain now expects the resources to arrive by the end of the year. That will postpone the bulk of the economic impact until 2022, and the government last week lowered its growth forecast for this year to 6.5% from 9.8%.
European Union recovery funds will boost economic growth by 2 percentage points per year in the coming years, according to government calculations.
Spain will use the money to finance 110 large investment projects, Sánchez said, including almost 8,300 million euros in the digitization of public administration and small and medium-sized companies.
(1 dollar = 0.8378 euros)
(Information from Belén Carreño, Inti Landauro and Nathan Allen, edited by Andrei Khalip and Catherine Evans; translated by Michael Susin at the Gdansk newsroom)