It's a Rough Ride For Spanish Firms In the Liquidity Trap

Spanish companies already endured one of Europe’s toughest lockdowns earlier this year as the country became one of the region’s epicentres for the virus, Reuters reported. A fresh surge in infections is compounding the hit to the economy, which is expected to shrink by more than 11% in the year as a whole. Yet fiscal aid to prop up the economy only amounted to 3.7% of GDP against 8.3% in Germany, the Brussels-based think-tank Bruegel estimates. That left small Spanish companies rushing to take up short-term loans as their only lifeline. “The greater recourse to guaranteed loans in Spain can be partly attributed to the lower availability of alternative fiscal relief measures for corporations,” the European Central Bank said in its September bulletin. Read more