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Spain to lower taxes for sectors affected by Ukraine war 

The Local Spain
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Spain to lower taxes for sectors affected by Ukraine war 
Spain's Prime Minister Pedro Sanchez speaks during a press conference following a Conference of Regional Presidents. Photo: JAVIER SORIANO /AFP

The Spanish government will roll out tax reliefs to alleviate the economic impact of Russia’s invasion war in Ukraine on the Spanish economy’s most affected industries, with plans to also speed up renewable energy projects. 

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Spanish Prime Minister Pedro Sánchez on Sunday announced his government will help industries confront rising costs and energy prices derived from Putin's invasion of Ukraine. 

The price of electricity, natural gas, fuel and countless other raw materials and products has spiked over the past two weeks as a result of the conflict and its ensuing energy crisis,  at a time when inflation in Spain was already at its highest in the last three decades. 

A number of steel plants and factories across Spain have ground operations to a halt in recent days as a result of not being able to face spiralling costs. 

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During the Conference of Regional Presidents on the Canary island of La Palma on Sunday, Sánchez agreed with the country’s 17 regional leaders to reduce taxes for the most affected sectors, without specifying what the tax cuts will consist of or which industries will have access to them. 

What the Spanish premier has said is that the tax discount will not come for at least another two weeks, expected around March 29th. 

Popular Party presidents such as Madrid’s Isabel Díaz Ayuso called for there to be a complete temporary suspension of all electricity and gas taxes, to which Sánchez responded that his administration had already agreed to lower these rates at a cost of €10 to €12 billion to public coffers. 

To help reduce Europe’s dependence on Russian energy, Sánchez also called for renewable energy projects in Spain to be sped up, in particular gas, green hydrogen and renewable energy connections between Spain and the continent.

The EU believes Spain can play a pivotal role in reducing Europe’s dependence on Russian gas as it has the largest gas storage and regasification capacity of all Member States, but the lack of existing gas pipeline connections between Spain and the rest of mainland Europe poses a problem.

READ ALSO: Is Spain ready to be the EU’s main natural gas supplier?

For Sánchez achieving this energy autonomy is essential as the conflict is going to be "long and risks becoming chronic".

Spain’s Prime Minister has the backing of the regional presidents when it comes to his proposal to the EU of separating the price of electricity from that of natural gas as another means of reducing the influence Russia can have on Europe’s energy prices.

Regional heads have also agreed to coordinate the reception and housing of more Ukrainian refugees in the days and weeks to come, with the initial figure of 12,000 likely to rise if the war continues.

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