Spain's parliament approved a budget that has been two years in the making, paid for in part by the European Union and seen as vital if Spain is to lift itself out of its coronavirus-induced economic slump.

The budget's passing on Thursday was a huge victory for Prime Minister Pedro Sanchez, who has been trying to get one passed since 2018.

Speaking ahead of the approval, Sanchez said the move would be "another step forward for a new direction," adding that delays have "made it hard for Spain to manage our response to the pandemic, passing this budget now is very important."

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The budget includes record spending on health and social care as well as a big increase in investment in infrastructure. It will also help enable the distribution of billions of dollars of EU rescue funds.

Gonzalo Garland, professor of economics at the University of Madrid, told CGTN Europe that Spain "was keeping the previous budget without incorporating any big or important changes." 

He explained: "So it's very important, not only because of the approval itself, that after almost three years it is necessary, but also for the political implications, with the political spectrum becoming far more complicated in recent years."

Garland noted the $169 billion from the EU recovery fund was a big factor in getting the budget passed.

"It's very important, these funds from the EU they are basically not a loan – they are with no return, so very important for the budgets and they ... allow for more of a social budget relative to what we had before, so I think is very important for all European countries," he added.

The most progressive or socialist budget in a generation is sure to deepen the divide between left and right in Spain. However, for Sanchez, his stated priority has been to kick-start the economy post pandemic.