Spain sets aside another $56 billion for ailing companies

MADRID (AP) - The Spanish government announced Friday it is making available another 50 billion euros ($56 billion) in aid for companies struggling to weather economic difficulties brought by the new coronavirus outbreak.

The government said after an extraordinary Cabinet meeting it will provide 40 billion euros in loan guarantees for new investments, especially in the fields of technology and the green economy. A previous loan guarantee scheme, worth 100 billion euros and launched in March, met high demand from businesses.

The government is also setting aside 10 billion euros to help strategic industrial companies with liquidity problems, through purchases of company shares or debt, for example.

Also Friday, the government signed a pact with labor groups and employers' associations to work together on saving jobs and developing the economy.

Prime Minister Pedro Sánchez said the broad and largely symbolic agreement 'œsends a message of confidence'ť to markets and Spain's trading partners, adding that more aid will come from the European Union's planned economic recovery measures.

The government's plan to hike corporate taxes could test the deal in coming months, however.