In response to the rising cost of living, the Spanish government presented a new package of measures worth ten billion euros this Tuesday. The aim is for the relief to reach those who really need it, said Prime Minister Pedro Sánchez.
For example, VAT on staple foods such as bread, milk, cheese, fruit, vegetables and cereals is to be suspended at four percent for six months. For pasta and cooking oils, the rate is to be halved from ten to five percent. The leader of the conservative PP, Alberto Núñez Feijóo, had been calling for such a reduction in VAT on staple foods for months. The government coalition of PSOE and Unidas Podemos only partially met his demand, the PP criticized, because the aid package does not take into account products such as meat or canned goods.
The left-wing government’s package of measures is primarily aimed at needy families and pensioners. Around 4.2 million households with an annual income of less than 27,000 euros and assets of less than 75,000 euros are to be paid a one-time bonus of 200 euros. In addition, all pensions will increase by 8.5 percent and particularly low pensions by 15 percent. Current discounts on electricity and gas prices are to be extended for six months. The ban on reducing energy supplies to needy households should remain in place.
Rents are frozen, tickets remain reduced
There is also good news in other areas: apartment rents are to be frozen for six months for existing contracts. However, this does not avoid the annual rent adjustment, which in Spain often increases automatically in line with inflation. Instead, the surcharge was limited to a maximum of two percent for the entire year 2023, and according to Sánchez, forced evictions should also remain suspended.
It is also planned that fares in local transport will remain reduced. The state covers 30 percent of the cost of monthly passes, as long as the Autonomous Communities contribute another 20 percent. Tickets for local public transport should therefore continue to cost only half the normal price. Commuters who use medium-distance trains should be able to travel for another year free of charge.
On the other hand, the reduction in the price of petrol, which has been in effect since the spring, will be restricted. The fuel discount of 20 cents per liter, from which all consumers have benefited so far, will only apply to the “most affected areas” in the future. According to Sánchez, these include transport companies, agriculture and fishing. Farmers should also receive 300 million euros in direct aid to absorb the increased costs for fertilizers.
The progressive judges are now in the majority at the Constitutional Court
The new measures are the sixth aid package under Prime Minister Sánchez to cushion the “economic and social consequences” of Russia’s war of aggression against Ukraine. Efforts so far have seen Spain bring inflation under control from 10.8 percent in July to 6.8 percent in November, and it now has one of the lowest inflation rates in the European Union.
In addition to the aid package, Sánchez was able to report another success on Tuesday: After months, the blockade of the Spanish constitutional court and the associated institutional crisis were surprisingly ended. The Judicial Council unanimously elected two new constitutional judges, allowing two more judges who had been appointed by the government some time ago to take office. The conservative majority of judges in the constitutional court is thus turning into a progressive majority – and for the left-wing government there is no longer the danger that the judges could bring down a number of projects.
Overall, the Spanish government’s support will increase to 45 billion euros. However, the opposition PP criticizes that the planned measures are not sufficient to compensate for the increased food prices. These rose by 15.3 percent in November compared to the same month last year. Regional and local elections are taking place in Spain in May, and parliamentary elections are next autumn.