The Government has approved this Saturday new measures to deal with the crisis caused by the war in Ukraine that will involve spending “more than 9,000 million euros”, as announced by the President of the Government after the extraordinary meeting of the Council of Ministers.
“This new decree represents an extraordinary effort, in excess of 9,000 million euros, with 5,500 million in spending to protect families and 3,600 million in reduced income due to tax cuts”, which includes the reduction of VAT on electricity from 10 % to 5%.
In total, the Government plans to invest until the end of 2022 “about 15,000 million euros, more than one point of gross domestic product (GDP)”.
Sánchez has reported this new aid after the extraordinary meeting of the Council of Ministers this Saturday, in which the decree was approved that will extend until December 31 measures in force to deal with the crisis caused by the war in Ukraine and new ones.
Among the novelties included in the decree law, the Executive has approved a direct aid of 200 euros for workers, self-employed and unemployed with “low income” that can be requested from the month of July. The aid will alleviate the rise in the shopping basket for the lowest incomes, according to Sánchez.
In addition, a 50% discount has been approved on multi-trip passes and vouchers for public transport provided by the State, which will be in force from September to December 31. In the case of transport provided by the autonomous communities, this discount will be 30% and the autonomies may supplement it up to 50% with their own resources.
Likewise, it has been agreed to limit the maximum price of butane “to ensure the well-being of the most vulnerable.”
Sánchez has stressed that the new royal decree will be in force until December 31 and that until that date the increase in non-contributory pensions will be applied by 15%, in line with the increase that was already approved in April for the Minimum Income Vital (IMV).
With these measures, the president estimated at 3.5 the inflation points that can be contained with all the measures included in the plan.
Likewise, Sánchez announced a new tax that will tax the extraordinary profits of energy companies as a result of the “rise in energy prices”, a measure that is going to be “very important” for the “fair distribution” of economic “burdens” and caused by the war in Ukraine.
He explained that this initiative, which is not included in the royal decree law approved today, will be presented in the coming weeks as a bill of the two formations of the coalition government, to be processed and enter into force on January 1, 2023.
“It is a measure that is in tune with public opinion in our country, with similar measures in neighboring European countries and that meets the recommendations of various international organizations such as the European Commission itself, the OECD and the IMF,” he said.
Sánchez has not specified what this new tax will be like, which is still under study, but he has stated that it responds to the need to guarantee “a fair distribution of the social and economic burdens” of the energy crisis caused by the war in Ukraine.
“The burdens of this painful situation must be distributed fairly, those in better conditions must contribute more, and what cannot be done is that some benefit at the expense of the majority,” he explained. “Those who obtain indirect revenue from this price increase must additionally contribute to the collective effort and to the protection of the middle and working class,” the president added.
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