Spain’s Cabinet is to approve a third package of measures to alleviate the effects of the social and economic consequences of the war in Ukraine today, Tuesday 27 December. It will come into force on 1 January.
Prime minister Pedro Sánchez will hold a press conference after the meeting to explain the anti-crisis measures. Although in recent months Spain has managed to moderate the price rises and has the lowest inflation rate in the eurozone, the government decided to continue some of the measures which are already in force and include new ones.
One new initiative is expected to be a reduction in the rate of the IVA sales tax on certain basic food items to offset the impact of high inflation.
There are two rates of IVA for food products in Spain, 10% and 4%. The lower rate is applied to those which are considered essentials such as milk, eggs, fruit and vegetables, bread and pulses. All other items which are counted as food which can be served to humans or animals are taxed at 10%, but some products do not fit into either category, such as soft and alcoholic drinks, and they are subject to the full 21% rate of IVA.
The government is also reported to have been studying the idea of giving a cheque worth around 200 euros to help families that earn less than 27,000 euros per year cope with the rising cost of food items, and this would benefit about eight million people.
Some of the measures introduced this year are expected to be extended, including the 2% limit on rent increases and the 15% increase in non-contributory pensions, and it has already been announced that free rail travel will be continued.
However, nobody is sure whether the 20 cent discount on each litre of fuel, which currently applies to all drivers, will be continued in its present form or adapted. The measure received criticism for being discriminatory in favour of those who have their own transport and therefore being of no help to the most vulnerable families.
Government sources have indicated in recent weeks that it may be changed so it will only apply to sectors which are most affected by the high cost of fuel, such as transport, agriculture, farming and fishing.