Spain unveils plan to ease war impact

MADRID

Spain’s government is readying a package of emergency economic measures worth 6 billion euros ($6.6 billion) in direct aid and tax breaks and 10 billion euros ($11 billion) in loans for families and businesses affected by the fallout from Russia’s invasion of Ukraine, Prime Minister Pedro Sanchez said yesterday.

The emergency plan aims to “protect economic growth and jobs,” Sanchez said in a speech at a business conference in Madrid.

“This emergency plan in response to the war includes a set of measures that will protect economic sectors and Spaniards who are being most affected,” Sanchez said.

Like the rest of Europe, Spain has been struggling since last year with soaring energy prices, with households and businesses struggling to pay electricity bills. Since Russia invaded Ukraine last month, oil prices have spiked, and Spain’s transport and farm sectors have demanded help with crippling gasoline prices.

The EU’s 27 leaders on March 25 reached an energy compromise, including a special dispensation for Spain and Portugal because they have weathered exceptional price surges.

The measures, intended to remain in place through June 30, will be assessed by European Union authorities before being enacted to ensure they don’t provide an unfair advantage.

Among other measures, the government is to provide an across-the-board discount of 0.20 euros ($0.22) per liter of gas, with the government meeting three-fourths of that cost and gas companies the rest, Sanchez said in a preview of the plan.

Yesterday, average petrol prices in Spain ranged between 1.84 and 1.98 euros per liter, while diesel stood at between 1.86 and 1.95 euros, according to dieselogasolina.com.

Last week, the government announced a similar reduction but only for truck drivers, with the new reduction to impact everyone.

The plan also extends until the end of June tax cuts already in place such as the reduced rate of VAT on energy and a suspension of tax on electricity production. It also includes a 362-million-euro aid package for the agriculture and farming sector, 68 million euros for the fishing and aquaculture industries, a 2 percent cap on rental increases, and a 15 percent increase in the income support to help the most vulnerable. Spain saw consumer prices surge to their highest level in almost 35 years at 7.6 percent in February.