EU in crisis as Spain demands £1.5 Trillion support package.

Spain wants the new rescue package to guarantee better-off member states can’t undercut those dealing with more economic and political devastation. The country’s deputy prime minister for the market, Nadia Calvino,” said the coronavirus retrieval fund must award grants, not loans, to prevent cash-rich nations from gaining a competitive advantage.

Ahead of an EU summit on Thursday, she called to split the debt burden of the bloc’s economic collapse. “The European reaction to this crisis cannot be that some nations end up with higher debt-to-GDP ratios,” Ms Calvino informed the Financial Times. “We will need to make sure that we protect the functioning of the internal market… It can’t be that some nations can support their markets in a more generous way than others.” 

Berlin has committed more money to battle the EU’s worst-hit countries, the economic impacts of coronavirus than the likes of Italy and Spain, who already face more significant bills for their recovery. EU leaders are set to discuss the economic potential of the bloc as part of an electronic European Council summit. Finance ministers this month reached a deal after political wrangling between countries on a €500 billion package of crisis services. Ms Calvino stated the solutions are “welcome but not enough”. 

The restoration fund should be a”appropriate size”,” she added, with Spanish government estimating the need for between €1 trillion to €1.5 trillion. Madrid needs the rescue package to allocate capital based on drops in GDP and increases in earnings. The Bank of Spain has cautioned that the country’s GDP could slump by up to 13.6 per cent this year — based on how long Pedro Sanchez’s government asserts its lockdown measures. 

Public debt has been forecast to grow from just under 100 per cent of GDP to 120 per cent before recovery costs are calculated. Ms Calvino stated steps were needed because in the bloc such as Spain, across quite a few nations. “This isn’t only about financial skill, but this is about offering a European response to the crisis,” she added.

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