Spain launches €11 billion stimulus package

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Friday, November 28, 2008

Spain has launched a 11 billion stimulus plan intended to boost the weakening economy and create 300,000 jobs. José Luis Rodríguez Zapatero, the Prime Minister of Spain, says that the money will be spent mostly in infrastructure and public works.

Zapatero in France in 2007
Image: Guillaume Paumier.

A portion of the package will aim to assist Spain's auto industry, which accounts for a fifth of Spanish exports and has been hit hard by the economic crisis, having seen sales plummet 54.6% since the beginning of the year.

The plan represents 1.1% of Spain's gross domestic product, and is a part of the €200 billion stimulus announced by the European Union.

Spain's economy is in a sharp downturn due to a crash in the construction sector. Spanish GDP shrank 0.2% in the third quarter, the first such decline in fifteen years. Spain's unemployment rate reached 11.3% in September, a record for the European Union.

Germany launched a similar package worth €50 billion, and France is expected to launch economic measures worth €20 billion next week as well.