Spain prime minister promises cash boost for businesses

Mariano Rajoy has earmarked more than €6bn for Spanish businesses

Throwing money at a problem, we are told, is no guaranteed way to solve it. But the well-heeled are not down-at-heel for a very good reason, and money often has a lot to do with it.

Spain’s economy has been down at heel so often in recent years that it had begun to resemble a piece of discarded gum: flat, useless, rather unsightly and generally in a sticky situation. But in recent months it has scraped itself off the pavement and is now readying itself for fresh bouts of mastication…

Laboured chewing gum metaphor aside, Spain is looking on the up once more, and its Prime Minister, Mariano Rajoy, has recently announced plans to keep the momentum going by injecting a cash package into the economy aimed at boosting Spanish businesses.

“The plan will include investments totalling €6.3 billion, of which €2.67 billion will come from the private sector and €3.63 billion from the public sector,” said Rajoy.

The chief benefit for companies in Spain will the cutting of the main rate of corporate tax from 30 per cent to just 25 per cent. Another benefit will be the introduction of a credit package for small- to medium-size companies, while the government will also invest heavily in research and development, transport and energy saving companies.

Such ambitious plans come on the back of a solid start to the year for Spain’s economy. For the first time since early 2008, before the economic downturn, Spain posted a 0.4 per cent increase in its GDP for the first quarter. Buoyed by this performance, Rajoy hopes to maintain this momentum with a series of carefully timed injections of capital aimed at helping Spanish businesses stand upright after years in the doldrums.