28 Nov 2008

Spain unveils 11b euro stimulus plan

9:58 am on 28 November 2008

Spain has launched an 11 billion euro plan aimed at boosting the economy and creating 300,000 jobs.

It is part of the European Union's 200 billion euro stimulus announced on Wednesday. The plan represents 1.1% of the Spain's Gross Domestic Product.

Prime minister Jorge Luis Rodriguez Zapatero said the money will be mainly invested in infrastructure and public works.

Spain's unemployment reached 11.3% in September - an EU record.

The government said it would invest 0.8 billon euros in the car industry, which has been through a severe downturn. Sales are down 54.6% since the beginning of the year.

The construction industry has also been severely hit by the financial crisis, with property prices falling and companies slashing thousands of jobs.

The Spanish economy shrank by 0.2% in the third quarter, putting an end to 15 years of continuous growth.

The European Commission has demanded that each EU member must spend about 1.2% of GDP to fight the economic slowdown.

Germany has already announced a similar 50 billion euro package and France is expected to unveil economic measures worth 20 billion euros next week.