PRESIDENT Pedro Sánchez was met with resounding applause upon his return to the Moncloa Palace today (Tuesday) from Brussels after a hard-fought agreement with the European Union to provide emergency Covid-19 recovery funds to Spain.
The country will receive around €140 billion, of which €72.2bn will be in direct fund transfers and the rest in loans.
Whilst the right-wing opposition PP has abandoned its habitual criticising of the socialist-Podemos leftist coalition and congratulated its rivals' leader on his achievement, far-right Vox claims the funds are 'a bail-out in all but name'.
Unlike the bank bail-out of €100bn (reduced to €41.3bn after rebates) received by the then PP government in 2012 – which came with stifling conditions including income tax rising by over a third and value-added tax (IVA) to 21% - the funds are nothing to do with a national financial crisis at institutional level, and varying amounts are set to be received by several EU member States to help pin their economy back together after the pandemic forced nationwide shutdowns.
Some apprehension has been voiced as to whether Brussels would demand tough conditions in exchange, such as in 2012 when even the lowest-paid workers faced higher tax bills and numerous bank branches closed down at the EU's orders, putting finance employees out of a job.
But Sánchez's government remains determined to abolish at least part of the 2012 labour reform, which made it easier and cheaper for companies to fire workers and, whilst this eased conditions for smaller firms suffering losses who had to make redundancies to avoid total closure, it also paved the way for less-scrupulous bosses to shed staff with fewer protections and guarantees.
Sánchez has not yet revealed the full details of the EU deal, but says he will do so in a press conference before the month is out.
It has been widely reported that some of the more financially-conservative northern European countries, as well as incorrect stereotypes about southern Europe's supposed 'work-shy' and 'time-wasting' culture and 'overpaid' civil servants – despite Spain's having much longer standard working hours than Germany, the UK and the Scandinavian countries, and statistically the best health service on the continent – were posing challenging hurdles for Sánchez and which led to negotiations stretching out for several days.
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