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The Council of Ministers yesterday approved an injection of 475 million euros of public money in Air Europa, a subsidiary of the Globalia group pending a purchase operation announced a year ago by Iberia for the amount of 1,000 million and postponed due to the pandemic. The Executive inaugurates with an airline company – and therefore with the tourism sector, essential for Spain and one of the most affected by the crisis – the new solvency fund, designed to support strategic companies that have been affected by the crisis of the coronavirus. Public intervention is essential to keep the productive fabric alive in the face of an increasingly uncertain recovery, which is moving away from the horizon as health data deteriorate. In that sense, the operation makes sense. However, it is worth noting the insufficient transparency on the part of the Executive regarding the conditions of the same and, more generally, how the work of the fund proceeds, of which practically no information has been provided.

Spain has stood out so far for being somewhat shy about activism in other countries. And due to a certain delay: the Spanish Executive is late for this type of operation. In the airline sector alone, Germany and France have given billions to their flag carriers, Lufthansa and Air France, and many other euro countries have granted significant direct aid to their respective companies. In the main cases, aid conditionality has been more transparent and formal.

In general terms, Spain has limited itself to public guarantees for loans under favorable conditions for companies. In this section, he has made a huge effort. Recent data from the European Commission suggest that, with this effort, Spain is the country that has mobilized the most money in relation to its GDP (5.3%, compared to 4.7% in France or 2.8% in Germany). But the big states of Europe have been bolder, opting for recapitalizations for essential companies in key sectors.

Spanish GDP rebounded in the third quarter, but the second wave of the pandemic anticipates a relapse at the end of the year. It is reasonable to anticipate a lot of financial suffering. In this situation, Air Europa’s operation is most likely only the first in a series of public interventions that must pump oxygen into the economy, especially in strategic sectors. It is to be expected that the State will take extra care in the transparency of these processes and in fine-tuning the criteria to help only viable companies and avoid a zombification of the economy. It is essential that this is done with prudence, so as not to cause distortions in the market. A high degree of ex-post audit is also required to minimize losses. The Government can and must advance on this path: in exceptional situations, the low profile must be abandoned and greater activism from the economic authorities makes sense. With greater certainty in the time horizon of ERTE and guarantee lines, for example; With this new chapter of direct aid, and even if necessary, entering the capital of some companies, to prevent the crisis from engulfing the viable ones. A vigorous action is warranted, more than that demonstrated so far, because today, low risk equals high risk. But with transparency and precision.


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