COVID-19: Can Spain’s Universal Basic Income be a model for Europe?

With Spain reeling under the onslaught of the coronavirus pandemic, which has claimed over 13,000 deaths, the European country has rolled out an innovative Universal Basic Income (UBI) programme to ease the financial burden on the virus-stressed citizens.

On April 4, Spain’s Economy Minister Nadia Calvino announced the plan as part of the government’s response to coronavirus crisis. UBI is an unconditional, regular payment made to every citizen. The amount of money paid to each person may differ based on demographic factors, such as age. Not much is known as to the amount covered or the date of rollout, but Ms Calvino assured that it would be launched as soon as possible and would complement other social security measures pledged by the government.

The project will be coordinated by Social Security Minister Jose Luis Excriva and the government expressed its broader aim to keep this in place as a “permanent instrument.” The UBI was unveiled after Prime Minister Pedro Sanchez rolled out a $216 billion package to boost Spain’s economy and announced a number of polices to assist self-employed workers and companies, mainly small and medium sized. The government also decreed that all people self-isolating will receive sick leave benefits.

EU’s Marshall Plan?

Meanwhile, the EU leaders are struggling to find ways to finance recovery from the pandemic with Mr Pedro calling for a common “Marshall Plan” to recover from the pandemic. Faced with the scourge of the pandemic, most countries are struggling to maintain the balance between health and economy. In this context, the impact of the move by the Spanish government to provide an unconditional cash payment to its citizens remains to be seen.

Overall, economists are divided over the benefits of UBI. There will always be sceptics, but the optimists believe that with detailed planning, this may turn out to be a model for the rest of Europe to follow suit.

A country in crisis

Spain has registered over 13,000 deaths due to the Coronavirus with the number of suspected cases aggressively rising as it stands third in the global rankings of number of cases, behind only the United States and Italy. The first confirmed case of Coronavirus in Spain was on January 31, 2020. Subsequently, the European country has been under a lockdown since March 14 with strict restrictions which are set to last up to at least April 25.

Undoubtedly, this has had a huge impact on the Spanish economy, with around 900,000 people losing their jobs since mid-March. Spain witnessed years of recession following the 2008 global financial meltdown. Fuelled by tourism and hospitality, the Spanish economy was reviving, but the outbreak of the coronavirus pandemic has derailed these plans as these sectors which are projected to be worst hit due to the pandemic.

(Rushali Saha contributed inputs for this article)

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