How Spain plans to lessen the economic impact of the war in Ukraine
The Spanish government announced a package of measures on Wednesday to protect the country's economy from the consequences of the war in Ukraine, with everything from jobs to energy rates covered.
In a speech in parliament, Prime Minister Pedro Sánchez announced a series of measures on a national and European level to prepare for the consequences of the EU's harsh economic sanctions imposed on Russia, as well as its shipment of weapons to Ukraine.
The conflict will have an impact on Spains exports, investment and tourism, as well as an increase in electricity bills.
"It is very likely that energy prices remain high and volatile in the future, directly impacting the consumer price index and the purchasing power and wellbeing of our compatriots," Sanchez said.
"The result will be an economic slowdown in our country and in Europe, and less investment at a key moment for Europe as we consolidate the recovery from the Covid-19 crisis."
READ ALSO: How Spain could be impacted by Russia's invasion of Ukraine
Energy prices
In order to ease the costs on households and businesses, Sánchez said he would extend a series of tax breaks on energy until June 30th.
These include the social energy tariffs (bono social de electricidad) a government programme to reduce energy poverty) which gives vulnerable groups a 60 per cent discount on electricity and a 70 per cent discount to severely vulnerable groups. Tax breaks on value added tax on electricity, electricity production tax and special electricity tax will also be extended.
Sánchez also encouraged regional governments to "protect the most vulnerable" in the next Conference of regional presidents, which is to be held on the Canary island of La Palma on March 13th.
Additional renewable energy investment
In order to increase renewables generation capacity, Sánchez announced the government would dedicate another €1 billion to a plan backed by EU recovery funds to boost production and storage of renewable energy.
Furlough and measures for tourism and agriculture
Regarding employment, the Spanish government will accelerate the implementation of the new ERTE furlough scheme, in anticipation of temporary shortages, increased costs or reduced demand in certain sectors.
The government will also increase the promotion of the most exposed tourist destinations in this crisis, those where tourism from Russia is significant, such as Andalusia and Catalonia.
Regarding agriculture, Spain will ask the European Commission to use all means to facilitate the supply of grains and oilseeds to farmers. "If necessary, we will also ask for more support from the Common Organisation of Agricultural Markets," Sánchez said.
Joint gas purchases in Europe and decoupling gas from electricity
Sanchez explained that the energy impact in Spain will be "more limited" than in other European countries, since imports from Russia account for only 4.6 percent of oil and 8 percent of gas.
The European Commission has already announced the adoption of measures proposed by Spain, such as joint purchases of gas and the creation of strategic reserves between various countries.
The Spanish government will also advocate for the adaptation of the fiscal rules, to push for the Covid-19 recovery.
Finally, Spain will promote in the EU and in the OECD the declaration of Russia as a tax haven, including that country in the black list of tax havens.
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In a speech in parliament, Prime Minister Pedro Sánchez announced a series of measures on a national and European level to prepare for the consequences of the EU's harsh economic sanctions imposed on Russia, as well as its shipment of weapons to Ukraine.
The conflict will have an impact on Spains exports, investment and tourism, as well as an increase in electricity bills.
"It is very likely that energy prices remain high and volatile in the future, directly impacting the consumer price index and the purchasing power and wellbeing of our compatriots," Sanchez said.
"The result will be an economic slowdown in our country and in Europe, and less investment at a key moment for Europe as we consolidate the recovery from the Covid-19 crisis."
READ ALSO: How Spain could be impacted by Russia's invasion of Ukraine
Energy prices
In order to ease the costs on households and businesses, Sánchez said he would extend a series of tax breaks on energy until June 30th.
These include the social energy tariffs (bono social de electricidad) a government programme to reduce energy poverty) which gives vulnerable groups a 60 per cent discount on electricity and a 70 per cent discount to severely vulnerable groups. Tax breaks on value added tax on electricity, electricity production tax and special electricity tax will also be extended.
Sánchez also encouraged regional governments to "protect the most vulnerable" in the next Conference of regional presidents, which is to be held on the Canary island of La Palma on March 13th.
Additional renewable energy investment
In order to increase renewables generation capacity, Sánchez announced the government would dedicate another €1 billion to a plan backed by EU recovery funds to boost production and storage of renewable energy.
Furlough and measures for tourism and agriculture
Regarding employment, the Spanish government will accelerate the implementation of the new ERTE furlough scheme, in anticipation of temporary shortages, increased costs or reduced demand in certain sectors.
The government will also increase the promotion of the most exposed tourist destinations in this crisis, those where tourism from Russia is significant, such as Andalusia and Catalonia.
Regarding agriculture, Spain will ask the European Commission to use all means to facilitate the supply of grains and oilseeds to farmers. "If necessary, we will also ask for more support from the Common Organisation of Agricultural Markets," Sánchez said.
Joint gas purchases in Europe and decoupling gas from electricity
Sanchez explained that the energy impact in Spain will be "more limited" than in other European countries, since imports from Russia account for only 4.6 percent of oil and 8 percent of gas.
The European Commission has already announced the adoption of measures proposed by Spain, such as joint purchases of gas and the creation of strategic reserves between various countries.
The Spanish government will also advocate for the adaptation of the fiscal rules, to push for the Covid-19 recovery.
Finally, Spain will promote in the EU and in the OECD the declaration of Russia as a tax haven, including that country in the black list of tax havens.
READ ALSO:
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