The update of the impact of the coronavirus crisis carried out by the Foundation of Savings Banks (Funcas) leads this body to warn the Government that relying on the arrival of European funds without undertaking reforms will condemn the Spanish economy to a insufficient recovery.

The delay in dealing with the situation is already being noticed.

According to its CEO, Carlos Ocaña, the gap that separates the Spanish economy from the most advanced in the European Union "threatens to widen."

The higher incidence of the epidemic and the dependence of the Spanish economy on international tourism have meant that the Spanish GDP has suffered more than the rest of the EU countries and that the recovery is weaker than expected.

Funcas has worsened by 3.2 percentage points its forecast of a fall in GDP for this year, to 13%, due to the higher number of infections and its deterrent effect on the arrival of tourists and the impact on consumer confidence.

The direct consequences for the remainder of the year have to do with a collapse in confidence in homes and businesses in the short term.

About 800,000 people are still subject to employment regulation files (ERTE) and liquidity tensions are growing in businesses that, according to Funcas, would be solvent under normal conditions.

The savings rate will skyrocket 17% while investment falls to a similar extent (18%).

Raymond Torres, director of the economic situation and international economy, has pointed out that in the labor sphere the unemployment rate will rise to 17% this year and 17.2% next year.

In a week in which the Government tries to agree on a new scheme until the beginning of 2021, Funcas has underlined the effectiveness of this tool to cushion the impact of the crisis, although it has indicated that for budgetary reasons it will be necessary to be "more and more selective "in measures to support companies and workers." To date, public spending on this type of aid launched last March amounts to 25,000 million euros.

This spending, together with the fiscal hole of 72,000 million euros created by the collapse of the collection will take the state deficit to 12% in 2020 and 8% next year.

It is these reasons that lead Funcas to warn the Government that, without a plan that generates confidence in the short term and without budgets that guarantee the execution of European funds or structural reforms, aid for the recovery of the Spanish economy they will lose effect.

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