MADRID/PARIS (REUTERS) - Spain will receive €140 billion ($222.5 billion) from the European Union recovery fund approved by the bloc's 27 leaders after almost five days of tense negotiations, Prime Minister Pedro Sanchez said early on Tuesday (July 21).

A little more than half of the transfers to Spain, €72.7 billion, will be grants and the rest will be repayable loans, Mr Sanchez said.

"It is a great agreement for Europe and a great agreement for Spain," he told reporters early on Tuesday, after negotiation lasted all night.

"Europe laid the basis of a response to the crisis of Covid without losing sight of tomorrow."

Spain will use the proceeds to encourage investment in its economy's digital transformation, the transition into greener energy sources and education, he said.

The 27 EU leaders approved the creation of a €750 billion fund, with €390 billion in non-repayable grants. The initial proposal was to hand over €500 billion in grants, with a group of northern, fiscally conservative countries seeking a lower level of handouts to their partners.

The stakes were high. EU economies were in freefall as they faced their deepest recession since World War II, with initial relief measures like short-time work schemes running out and fears that the autumn could see deep economic malaise and social discontent.

Spain and Italy, arguably the hardest hit European countries by the pandemic, will be the main beneficiaries of the recovery fund.

Meanwhile in France, French Finance Minister Bruno Le Maire told France Info radio that the country would get €40 billion ($63.5 billion) in subsidies as part of the EU deal on the economic stimulus package.

His government said it would unveil more details on the recovery plan on Aug 24.