The Government will approve in the coming weeks to earmark €11 Bn in subsidies for companies, SMEs and the self-employed in sectors particularly affected by the economic crisis, such as tourism, hotels, restaurants and small businesses. The aid plan could include haircuts on the financing provided by the Official Credit Institute ICO, which has offered €140 Bn in guarantees. The employers’ associations from the retail and hotel and catering sectors had demanded €12.5 Bn in aid from the different administrations in order to save both industries.
Half of the line of guarantees’ first tranche, amounting to 20 billion euros, will be earmarked for SMEs and the self-employed, guaranteeing 80% of new loans and financing renewals. The remainder will go to medium and large companies. In the latter’s case, up to 70% of new loans will be guaranteed, while loans’ renewals will be guaranteed up to 60%. Once the resources are used up, the government will automatically activate new tranches of credit lines up to the maximum target of 100 billion euros.
The M&A market in Spain has been very active over the last two years. There is a lot of cash around, but what is lacking are some good deals.
Spain is the country with the most SMEs chosen by the European Innovation Council, the European Commission’s financial and technical support tool, to receive up to 40 million euros in funding with the aim of supporting business growth via the development of innovative projects.
Despite the improvement in macro data over the last few years (GDP has risen by 13% and employment – Active Population Survey – 12.1% from its lows), the consequences of the crisis on the destruction of Spain’s businesses fabric still remain.
A recent report by Eurostat revealed that SMEs in Europe generate half of intra-European trade. These companies provide up to 249 jobs each and drive the economy.
In 2016, Spain was once again the European country which received the most funding from the European Investment Bank (EIB), for a total of 11.5 billion euros, in terms of investment per unit of GDP or, in other words, in relation to the size of its economy.