Madrid (AFP)

Spanish Prime Minister Pedro Sanchez unveils on Wednesday his stimulus plan to redress a Spanish economy devastated by the Covid-19 crisis, thanks to the injection of 140 billion euros in European funds.

As a sign of the severity of the crisis induced by the pandemic in one of the most affected European countries, the leftist government of Mr. Sanchez announced on Tuesday that Spain's GDP is expected to fall by 11.2% this year, two points from more than expected in May.

Unemployment will climb to 17.1%, as will the public deficit which should reach 11.3% this year.

Public debt has already exceeded 110% of GDP in the second quarter.

In this context of gloomy forecasts for the fourth economy of the euro zone, already in recession, Pedro Sanchez must present at 11:00 am (09:00 GMT) the main lines of his "Recovery and resilience plan".

A package of public investments financed mainly thanks to the 140 billion euros going to Spain as part of the European recovery plan approved this summer and composed for half of loans and grants.

- "Huge opportunity" -

"The virus exists and our obligation is to fight it with all our strength, and then, (...) to channel these forces to make it a historic accelerator to transform our country. We cannot lose this huge opportunity," said the socialist in early September.

Minority in parliament, the government of Mr. Sanchez has been urging its potential allies for weeks to support the state budget, the adoption of which is, according to him, essential to be able to launch the investments of the recovery plan.

The Spanish plan will include several major axes corresponding in part to the demands of Brussels: ecological and digital transformation, social and territorial cohesion, i.e. the fight against poverty and support for rural areas, and gender equality in the labor market. .

The goal is to strengthen economic growth which should be at least 7.2% in 2O21, while "the recovery is already underway", assured Tuesday the Minister of the Economy Nadia Calviño.

This stimulus plan should thus bring, according to Ms. Calviño, two or three additional points of GDP growth which could grow in the best case by nearly 10% next year.

Optimistic assertions in a country where the government has been spending 4 billion per month since April to finance a massive partial unemployment plan in an attempt to avoid layoffs, and where the sectors most affected are tourism and hotels, engines of the economy together represents 18% of the GDP.

The recovery there is also undermined by the second wave of the pandemic, which particularly affects Spain and has forced the government to impose a partial closure of Madrid since Friday.

© 2020 AFP