Spanish government offers rescue package to constructors

Zapatero promises 3000 million euros to help rescue Spain’s building industry

The Spanish president has announced that the government is prepared to bolster the housing sector with long term loans totalling 3000 million euros. The announcement made in the Spanish parliament is aimed at boosting the economy and helping the housing sector and construction industry. In return for the loans which will help many companies stay afloat the government wants more houses to be destined for the rental market in order to help the housing sector readjust to difficult times.

By this method, the president hopes that these measures will help smaller investors gain access to properties, promote flexibility in investment in property and provide money for such investments. A new system of credit in ICO will have the objective of promoting the supply of rented accommodation and therefore helping the market to readjust.

More specifically, the government will facilitate the transformation of loans owed by construction companies for building projects to loans repayable over the long term.

In return the government wants more properties to be offered for rent during a fixed period of time. The 3000 million euros destined to help construction companies could be increased depending on market conditions.

Zapatero also said that he believed that inflation would progressively decrease over the next few months and forecast that it would be below 4% by the end of the year.