Spain to lower taxes for sectors affected by Ukraine war 

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. 

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

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. 

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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One in three Spaniards can’t afford to go on holiday this summer: study

One third of Spaniards can't afford to pay for a holiday this summer and almost half the population is having trouble making ends meet, according to new data from Spain's national stats agency.

One in three Spaniards can't afford to go on holiday this summer: study

Data from Spain’s national statistics body, the Instituto Nacional de Estadística (INE), has revealed that one in three Spaniards cannot afford to take a week’s holiday.

The 2021 Living Conditions Survey, published this week, also concluded that over one in four Spaniards (27.8 percent) were at risk of poverty or social exclusion, a figure which represents an increase of 1.6 percent on the 2019 study.

The INE considers someone at risk of poverty if their income level is below the the national average; that they are suffering “severe material and social deprivation”; or that their household is classified as “low intensity in employment.”

There are 13.2 million people who meet at least one of these criteria in Spain.

The study, which the INE publishes once a year, is the most detailed reference for measuring poverty at the national level, and the numbers also reveal that there are 10.3 million people in Spain with incomes below the poverty line.

In 2020, that threshold was €9,535 per annum for a single-person household and €20,024 for a household of two adults and two children.

Furthermore, there are another 4 million Spaniards facing “severe material deprivation,” which is defined as people who cannot afford expenses such as going on holiday for at least one week a year (32.7 percent of Spaniards), eating meat or fish every two days (4.7 percent), having the financial capability to deal with unforeseen events (33.4 percent) or maintaining a comfortable temperature at home (14.3 percent), something particularly important during the summer months in Spain but made much more difficult by increasing electricity prices.

READ ALSO: How much does it cost to have air conditioning at home in Spain?

North-South divide

Many countries have a famous North-South divide – Italy, England, and the United States, to name just three. Spain can be included on this list, and this is especially true when delving into the INE data.

According to the study, economically speaking Spain is increasingly divided into horizontal halves: in southern Spain poverty levels even double those in the north.

A third of people living in Andalusia and Extremadura are at risk of poverty, for example.

In the Canaries, Murcia, Castilla-La Mancha, and Valencia, the figure is one in four.

Contrast that, however, with the data from northern Spain: only one in ten people in Navarra and Basque Country are at risk of poverty; in Madrid (admittedly central Spain but it is the capital) and Catalonia, the figure is slightly higher but still only around 15 percent.


The economic hardship comes amid not only Spain’s recovery from the pandemic, but also the double shock of skyrocketing inflation, which reached a 37 year high this week, and crippling energy bills caused by knock-on effects from war in Ukraine.

A loss of earnings during Covid-19 lockdown, combined with Spaniards feeling the pinch of inflation in their shopping baskets and rapidly increasing energy bills, means that more Spaniards are being pushed into poverty and the gap between the rich and poor in Spanish society is widening.