Spain unveils €9 billion plan to tackle Ukraine fallout

The national aid plan will help the country weather the ongoing fallout of the conflict in Ukraine.

Spain unveils €9 billion plan to tackle Ukraine fallout
Pedro Sánchez arrives at the press conference at Moncloa Palace to announce the new direct aid plan worth €9 billion. Photo: JAVIER SORIANO/AFP

Spain’s government on Saturday unveiled a €9 billion national aid plan to help the country weather the ongoing fallout of the conflict in Ukraine.

Prime Minister Pedro Sánchez unveiled the package in Madrid which comes on the heels of a €6 billion injection in March for a scheme worth €15 billion overall, or “more than one GDP percentage point”.

The government also extended other measures taken in March and set to end on June 30 by another six months till the end of the year. Those include reducing the price of a litre of petrol by 20 euro cents.

For the second time in less than a year, it also reduced value-added tax on electricity from 10 to 5 percent, a move already announced by Sánchez earlier this week.

It decided to hand out “direct aid of €200” to the self-employed and unemployed, and increase pensions and disability benefits by 15 percent.

The measures aim to help consumers deal with rising inflation, which hit 8.7 percent in May, its highest level in decades.

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Why the UK’s Royal Navy ships are being built in Spain

Spain's internationally renowned shipbuilders will help make three new supply ships worth €1.8 billion for the British Navy.

Why the UK’s Royal Navy ships are being built in Spain

Navantia, Spain’s state-owned shipbuilding company, will play a key role in the construction of three new British Navy supply vessels.

The Team Resolute consortium, of which Navantia’s UK subsidiary is a member along with British firms BMT, Harland & Wolff and Appledore, was awarded the €1.8 billion (around £1.6 billion) contract to make three 216-metre auxiliary ships that will carry supplies and ammunition to British Navy aircraft carriers, destroyers and frigates.

The ships will be among the largest in the British fleet, smaller than only the Queen Elizabeth aircraft carriers.

In Spain, the shipbuilding work will take place at the internationally renowned Navantia shipyard in Puerto Real in Cádiz. Navantia have previously built ships for the Saudi Navy, and in 2016 built two ships for the Australian Navy, though they were mostly built in Navantia shipyards in Ferrol, Galicia.

Navantia’s president, Ricardo Domínguez, said in a statement that “It is an honour for Navantia and Navantia UK to participate in this programme, which will benefit from our excellence in shipbuilding and our programme management and technology transfer capabilities.”

Construction in the UK will take place at the Harland & Wolff shipyards in Belfast and also in Appledore, on the Devon coast.

According to the contract, production should begin in 2025 and the three ships, which will each be the length of two football pitches, should be operational by 2032.

Xiana Méndez, Spain’s Secretary of State for Commerce, described the contract as “excellent news” for Spain, stressing the strength of Navantia’s international portfolio not only for the clear “economic effects” but the “strategic alliances” it allows Spain to foster on the international stage.

The contract makes Navantia one of several important Spanish companies currently operating in the United Kingdom, along with energy company Iberdrola, Telefónica (O2), the Iberia Express airline, which is part of IAG, as well as transport infrastructure group Ferrovial, which operates at Heathrow airport, and airport operator Aena, which runs Luton airport.

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Navantia’s role in the shipbuilding consortium is certainly encouraging for Spain’s relationship with Britain in the post-Brexit world. Spanish newspaper La Vanguardia reported the news with the headline: ‘Navantia beats Brexit.’

Spanish Armada?

It has not been received quite as positively in the United Kingdom, however, with shadow Defence Minister Chris Evans claiming that the outsourcing of parts of the construction process to a Spanish firm serves to “create a new Spanish Armada, over 430 years since the last one lost.”

“It is also highly unusual for warships to be built abroad due to security implications” he added. “This is about creating British jobs for British workers, with British ships, using British steel.”

Defence Minister Alex Chalk defended the contract and Navantia’s involvement, suggesting that “some components are built overseas” and that in “in modern engineering designs it was ever thus.”