July 23, 2020 / 10:19 AM / 14 days ago

Stimulus measures to boost Spain's recovery should be extended, says ECB's de Cos

FILE PHOTO: A woman wearing a face mask looks at her mobile after Catalonia's regional authorities and the city council announced restrictions to contain the spread of the coronavirus disease (COVID-19) in Barcelona, Spain, July 21, 2020. REUTERS/Nacho Doce

MADRID (Reuters) - Stimulus measures to help Spain cope with the coronavirus crisis, such as furlough schemes and state-backed credit lines, should be extended and recalibrated periodically, Spain’s central bank governor Pablo Hernandez de Cos said on Thursday.

Among the measures already approved in Spain aimed at mitigating the effect of the pandemic, the government extended furlough schemes until September 30 while also signing off on guaranteed funding lines of up to 150 billion euros (136 billion pounds).

“Supporting the recovery and facilitating the adjustment of the economy to the post-Covid scenario requires first of all to extend and periodically recalibrate some of the measures already implemented,” De Cos told a conference.

De Cos said measures should now focus on the most affected groups of companies, sectors and population.

Though the Spanish central bank recently said that the economy would begin recovering in the second half, De Cos said on Thursday that the recovery was incipient, incomplete, uncertain and uneven.

Spain’s central has said that the economy could shrink by 11.6% in 2020, without ruling out an even sharper contraction of 15.1% due to the possibility of a new wave of coronavirus.

De Cos, who also described as satisfying a recent agreement reached by European leaders on a 750 billion euros pandemic aid-package, said the challenge would now be for these funds to help boost recovery.

Reporting by Jesus Aguado and Emma Pinedo; Writing by Ingrid Melander

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