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The Vice President of Economic Affairs, Nadia Calviño, rejects for the moment the cessation of all non-essential economic activity and requires banks to already open the credit tap for companies despite not yet detailing how the program will be implemented. public guarantees worth 100,000 million euros approved by the government six days ago.

The economic head has highlighted the two aid packages already put in place by the Executive and has highlighted that a large part of the economic activity that continues to develop in the country is aimed at the production and provision of essential goods and services in sectors like food or toilet.

Regarding the total closure of the economy, the vice president has defended that the Government does not want "Spain to stop" , and has shown that "all activity is being redirected to priority sectors" and "develop the necessary equipment to overcome the crisis". "For a hospital to function, there is no doubt that the country's chemical and pharmaceutical industry must continue to function, the textile sector must continue to supply clothing and the food industry," Calviño has given as an example.

Questioned about the evolution of the economy, and specifically due to the S&P forecast that the economy will collapse 1.8% this year, the government economic manager has indicated that the same rating agency expects strong growth for next exercise. This is in line with what Economy sources already stated last Friday, when the S&P estimate was released, and when they pointed out that the accumulated growth between 2020 and 2021 will be practically similar to what would be registered without the impact of Covid-19 .

Therefore, the Executive recognizes that the economic contraction will be notable during this year, with a reduction in Gross Domestic Product (GDP) which, if the aforementioned -1.8% is met, would be the largest since 2012. However, The Government itself is confident that the rebound in 2021 will be so intense that it will offset the contraction, a point on which many economic and analysis firms are not so sure.

Without detailing the guarantees

In relation to the public credit guarantee program for companies approved last Tuesday at the Council of Ministers, Calviño still does not explain how this tool will be channeled and what part of the financing granted by the bank will be supported by the State. Financial entities consider it key to know this percentage and whether the measure will only affect new loans or will extend to refinancing. Its approach is that for small companies and the self-employed the State covers 90% of the credit, for medium-sized companies 80% and for large companies 70%.

In any case, the economic vice president has stressed that these guarantees will be "retroactive", so she has asked banks not to waste a minute when granting oxygen to companies that need it. Calviño herself has asked the sector to follow the example of Bankia, which yesterday announced a moratorium on the payment of loans to SMEs and is studying extending the deferment of the mortgage installment to a maximum of 12 months.

Economy had initially set the distribution of credit risk close to 60% -40%, since the proposal approved last Tuesday included guarantees of 100,000 million euros for the mobilization of credit above 180,000 million. However, the banks reacted a day later asking for more public coverage of the loans in the face of a great wave of business failures due to the slowdown in economic activity.

Calviño hopes to be able to present his proposals tomorrow Tuesday to the Council of Ministers so that a decision can be made in this regard, while on the other hand he works with the European Commission to approve the granting of these guarantees by the State to the bank.

According to the criteria of The Trust Project

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