In the September Banco de España forecasting exercise I have referred to in my address today, the impact of this programme was not explicitly incorporated into the projections, since at that time there was notable uncertainty over many key areas in relation to the use of these funds. However, we did publish an analytical text in which, under different assumptions about the execution time of the projects requested, the types of projects and how they would be financed, an initial approach was made in respect of their potential macroeconomic impact.4 4  See Box 9 of the “Quarterly report on the Spanish economy”, Economic Bulletin 3/2020, Banco de España. 11  The results of this analysis suggested that the European programme, given the potential volume of funds it could mobilise, has the capacity to become a significant factor of support to the Spanish economy’s recovery in the wake of the impact of COVID-19. Also, and in particular, it could be a unique lever for raising our modest potential growth rate, especially if the design and prompt implementation of new public investment projects exerting a high multiplier effect on activity were pursued, accompanied by the introduction of structural reforms providing for the more efficient functioning of our economy as a whole. In this respect, the NGEU programme entails an upside risk to our September forecasts that I shall quantify later.
On the health front, combating the virus obviously continues to be a priority objective until an effective medical solution has been developed. This may require continuing to adapt the capacity of the health system to ease the effects of the second wave on public health and to manage potential and subsequent fresh outbreaks. At some point further ahead, the objective must be to purchase the necessary doses of the treatment or vaccine, for distribution to the population at large. Beyond the health sphere, the short-term priority must be to continue to support households and firms until a sound and sustained recovery is in place. This is something we will very likely not see until a medical solution is available that will render restrictions on people’s movements and on certain sectors of economic activity unnecessary. Until this is the case, budgetary support for private economic agents is crucial to minimise the risk that the present health and economic crisis may trigger a financial crisis, which would entail much higher and longer lasting costs in terms of production and employment. However, these support measures must now be more selective, concentrated on the population groups and businesses most affected by the crisis, to maximise their effectiveness in a setting in which public funds are necessarily limited. This was the backdrop for the extension of the furlough schemes up to January 2021 agreed between the Government and the social agents.