Spain's government to approve anti-crisis plan on Friday to curb Iran war impact
The package, which an extraordinary meeting of the Spanish cabinet will approve, aims to protect "the most vulnerable and the most impacted sectors"
Spain's government is convening an extraordinary cabinet meeting on Friday to finalise the anti-crisis plan in the face of the Iran war. The package aims to "protect the most vulnerable and the sectors most affected" by the rise in prices.
The government has made this decision after a week of internal debates over when and how to act. While Second Deputy Prime Minister Yolanda Díaz has been calling for quick approval of measures, Deputy PM María Jesús Montero and Minister of the Economy Carlos Cuerpo are in favour of waiting for Brussels to issue solutions after the European council on Friday.
The disagreement between the PSOE and Sumar parties within the government has reflected both the different stances within the coalition and the technical and parliamentary complexity of putting together a package of measures that can pass through the cabinet's filter. One or two royal decrees will have to approve the measures.
Although the government has not yet revealed the contents of the plan, the previous days have left clues as to its main lines. Road transport and the agricultural sector are priority beneficiaries, as they are the hardest hit by rising fuel prices.
Truck drivers have been demanding a subsidy of at least 25 cents per litre of diesel for days, similar to the one granted in 2022 after the outbreak of the war in Ukraine. The Minister of Economy, however, has stated that the current situation is not comparable to that of then - the impact is currently concentrated on fuel, without electricity or food prices having experienced equivalent increases.
For this reason, Cuerpo has ruled out repeating the universal subsidy of 20 cents per litre, which was heavily criticised at the time for its regressive effects.
Road transport and the agricultural sector are priority beneficiaries, as they are the hardest hit by higher fuel prices.
Possible measures
Among the measures that the government has considered are reductions in energy IVA taxes to alleviate household bills; the activation of temporary lay-offs (Erte); and the reactivation of part of the social shield.
Cuerpo has also been pointing to the use of sector-specific "fiscal measures" - a more targeted approach than the response from three years ago, which seeks to avoid indiscriminately benefiting those who do not need it.
The government states that it is monitoring the "highly volatile" situation daily. The release of strategic oil reserves agreed upon by the major economies and the outcome of this week's European council meeting are two of the factors the government has cited as crucial in determining the final scope of the plan. What seems to be ruled out, in any case, is widespread aid.
