The Spanish government presents the new package of measures to combat the crisis

This Wednesday, the Council of Ministers approved the partial expansion of “social protection” to address the consequences of inflation, the energy crisis and the war conflict in Ukraine, maintaining measures related to the labor market that are fundamentally not suspendable supplies that Expansion of discounts in connection with the electricity social premium or the suspension of evictions.

At midday, Spanish President Pedro Sánchez appeared in La Moncloa to take stock of the year and talk about this new package. “These are measures to improve people’s lives in a special way in the midst of this uncertainty arising from the war in Ukraine and the Middle East,” the socialist leader began.

SMI and layoffs
This new package is the eighth to be promoted by the government and will extend workplace benefits in the form of public aid that expired on the last day of the year. In this way, companies that receive direct aid or through ERTE and lay off workers due to increased energy costs will be forced to repay the aid received.

In the case of the interprofessional minimum wage (SMI), the Council of Ministers has decided to freeze it. In this way, the minimum wage will remain at 1,080 euros per month at the beginning of next year while the Ministry of Labor waits to see whether it will sit down with employers and unions to reach an agreement or impose an increase only with the support of CCOO and UGT, which , if implemented, would represent an increase of between 3% and 4%.

Also in the labor sector, the relief contract related to partial retirement for the sector will be extended in 2024 following an agreement with PNV to facilitate the rejuvenation of the workforce and the training of young workers.

Likewise, the suspension of evictions and removals from their usual place of residence for people in precarious situations is extended. Likewise, the ban on cuts to basic services remains in place and the increase in discounts on the social electricity bonus, which is aimed at individuals or families whose income is between 12,600 euros and 16,800 euros, is also being expanded. “We are also extending the elimination of bank commissions for the early repayment of loans with variable interest rates by six months,” explained the President.

VAT on food
On the other hand, this package includes the extension of the 0% VAT on basic foods such as bread, flour, milk, cheese or eggs for another six months until June, as well as the 5% discount on oil and pasta, as Sánchez announced.

Free public transport
However, despite the fact that these and other points were raised, sources from Yolanda Díaz’s party stressed that negotiations between the Ministry of Finance and the Ministry of Labor had been “intense” throughout the morning due to some of these measures. In this sense, they refer to measures related to free public transport or taxes on banks and energy companies.

One of the big unknowns was public transport and its subscriptions. There is currently debate within the Executive about maintaining a 30% discount on public transport for the other administrations as long as they commit to increasing the percentage to 50%. Something that has already been agreed upon is implemented.

The government has allocated a total of 1,440 million euros to subsidize public transport in its 2024 budget, with the aim of making trains and buses free and helping communities reduce the prices of their respective modes of transport. The President has confirmed free travel for frequent users of the Cercanías, Rodalies, Media Distancia and state bus lines, as well as the discount on Avant. However, this free price does not include all public transport that the CEO had promised and that would be offered to young people, minors and the unemployed from January 1st.

Energy taxes and “Iberian exception”
Another doubt that was on the table was the extension of the energy tax credit, which was 5% on gas, electricity, wood and pellets. These reductions also include the application of the reduced tax rate of 0.5% of the special tax on electricity, as well as the temporary suspension of the tax on the value of the production of electrical energy and the cap on the price of the bottle of butane between 8 and 20 kilograms for 19.55 euros.

“We have decided to withdraw the tax cuts related to electricity and gas, but we will do this gradually over the next six months,” Sánchez said in his appearance, “I am referring specifically to the VAT on electricity, to the tax.” on the value of electricity generation and also on the special tax on electricity. VAT on gas will return to normal levels from February. In this way, the energy tax will be reduced from 5% to 10%. On the contrary, the lid of the butane bottle remains intact.

Regarding the famous “Iberian exception”, which partially protected Spain and Portugal from the evolution of electricity and natural gas prices, the Minister of Ecological Transition and the Demographic Challenge, Teresa Ribera, has confirmed this: from January 1, 2024 it is repealed because of its impracticability.

Taxes on banks and energy
The bank tax remains in place. This means that the interest and commissions of all companies that earned more than 800 million in 2019 will continue to be taxed at 4.8%, which will affect the activities of companies in Spain.

In the energy sector, the coalition government will extend taxes “on exceptional services in the electricity sector” by one year. “We will make changes to the general budget law so that strategic investments related to industrial projects and the decarbonization of the production system in our country can be withdrawn,” he added.

In this sense, Sánchez has reported that work is underway to “redesign” the extraordinary tax for this type of companies, although he has stressed that this decision has nothing to do with Repsol’s warnings that the tax is “under its” conditions “ represents investments in our country.

Two new measures
The socialist used the appearance to announce two new measures. On the one hand, “bank commissions for cash withdrawals at the counter for people with disabilities and also for older people” should be abolished. Secondly: “The transfer of the management of the minimum living income (IMV) to all autonomous communities of the common regime that so desire is authorized to put it on a par with the management of the regional regime.”

The measures include a reduction in electricity tariffs for electricity-intensive industries to 80%, flexibility in changing electricity supply contracts and the revaluation of pensions that contribute to the Consumer Price Index (CPI), which stands at 3.8%.

Sánchez ended his speech by standing up for his management. “It is good to remember that a year ago the conflict in Ukraine entered its first winter and there was talk of an economic recession,” he said, “but the Spanish economy has once again firmly denied all the prophets.” Chaos.” and strength.” “The consensus of the main international organizations assumed that the economic growth of GDP in Spain would be 1.2% in 2023 and today we know that we will grow by 2.5%” , he continued. The president concluded his speech by wishing “the government a happy holiday.”

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