The socialist president of Spain, Jose Luis Zapatero, has announced a package to help the housing industry survive the crisis presently affecting it. In a move which is aimed at helping the property constructors and promoters rather than individual homeowners or buyers the president unveiled two important projects. One was the approval of real estate investment companies, quoted on the stock market, which will enjoy special tax breaks and will hopefully provide an impulse for the rental market and encourage investment in the property sector. The second was the provision of a new line of state loans to construction companies which will allow them to use borrowed money for purposes other than construction on the provision that unsold homes those companies possess are made available on the rental market for a specified period.
The move comes at a time when the European Union is predicting zero growth in Spain for the last months of the year although Zapatero himself was more optimistic with government forecasts slightly higher than the EU figures. The credit line which will be made available will start at three billion euros although this could be increased in the future. It will be administered by the Instituto de Credito Oficial, which is part of the ministry for the economy and works to help Spanish companies become more competitive. The president said that the measures should work towards providing liquidity for companies which have accumulated large stocks of property. Unemployment in Spain has recently risen to more than 2.5 million, more than ten per cent of the workforce and inflation stands at around five per cent.
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