Spain plans to approve a new aid package to bolster the finances of companies hit by the coronavirus pandemic in March, Economy Minister Nadia Calvino told reporters in Brussels on Monday.
The package will take the form of direct payments to companies considered viable but which are struggling financially because of the pandemic, Calvino said. "What we are doing is trying to identify those companies that were fundamentally viable before the pandemic hit and whose solvency has been weakened as a result of the sharp drop in activity," she said.
Nearly one in five companies in Spain may have ended 2020 insolvent as the euro zone's fourth-largest economy was one of the hardest hit by the pandemic, according to a recent Bank of Spain report.
A government source had previously told Reuters that haircuts on state-backed loans could factor into the package.
In November, Madrid extended its 140 billion euro ICO liquidity scheme until June 2021, but that was not enough to offset the impact of the third wave of the pandemic on heavily indebted companies that had been warning for months they would not be able to repay their debts.