The Government gives a blow of effect after the Andalusian elections with a powerful decree that makes 9,000 million euros available to offset the effects of inflation.
In a forceful press conference, in which he presented himself as the defender of the interests of workers and the middle class against "certain economic powers" that are trying to overthrow the Government because it harms their interests, the president, Pedro Sánchez , has announced a package of measures included in a broader anti-crisis decree than the previous one.
This, in addition, will be extended until the end of the year with new initiatives, such as a check of 200 euros for workers, self-employed and unemployed with low incomes (below 14,000 euros per year, according to the Treasury, provided they are not receiving the minimum income vital, which is raised by 15%),
which has been key to the negotiation with United We Can, which was closed at the last moment, just before the Council of Ministers began, at a meeting in La Moncloa between Félix Bolaños and María Jesús Montero, on the socialist side, and Yolanda Díaz and Joaquín Pérez Rey, his Secretary of State, for the minority sector of the coalition.
Only then was the check finally agreed.
The decree also includes a 15% rise in non-contributory and disability pensions and a drop in VAT on electricity from 10% to 5% or a new tax on extraordinary profits from energy companies that will come into effect from 2023, but with retroactive effects, so you can tax what they are earning in 2022 thanks to the increase in energy.
The model that the Government is looking at, according to Sánchez, is that of Italy, where Mario Draghi first approved a 10% increase for benefits that fell from the sky and later announced that he will raise it to 25%.
The tax will be approved in a separate law by urgent procedure.
In addition, the 2% limits on rent increases and the brake on dismissals in companies with public aid are maintained.
“These measures [the check and the increase in low pensions and the minimum vital income] affect four million people.
But the decree as a whole affects all Spaniards, we put 15,000 million in total [adding the two decrees this year], 1% of GDP, to protect the middle class as a whole, ”Sánchez insisted.
In the negotiations within the Executive, the PSOE has insisted a lot that the measures had to be designed not only for the most vulnerable citizens, but for the entire middle class, and that is what, according to Sánchez, the decree does.
The discussion between the partners was very intense in recent days precisely because of this clash of visions.
The Socialists insisted on the most general measures, United We Can on those that affect the most vulnerable, especially the check.
This initiative, which has already been launched by countries such as Italy, France, Germany or the United Kingdom, has caused very significant internal tension in the Executive, because a sector of the PSOE's economic team did not agree with it at all.
At the beginning of the week it seemed that it was finally going to be included, given the worsening of inflation, but at the end the negotiation began to get complicated and finally the decision was made by Sánchez himself, who unblocked the issue by accepting a check for 200 euros, in line with Italy -exactly that amount- and not 300 as requested by United We Can,
closer to what Germany or the UK have done.
At the press conference it was clearly seen that Sánchez put the focus more on the other measures, especially the tax on large energy companies, which has also generated internal debate in the Executive.
Yolanda Díaz quickly claimed the check on social networks.
Despite the difficulty of reaching an agreement with United We Can, which was not closed until the last moment before the start of the Council of Ministers, Sánchez avoided delving into the internal discrepancies and concentrated on defending the importance of the decree, with which the Government intends to change the political agenda and recover a pulse lost with the Andalusian fiasco.
The agreement caused a closing of ranks within the Executive.
Diaz also, once the pact was reached after the tension of the last few days, concentrated on vindicating the coalition: “we are a coalition government determined to remain on the side of the people.
Let's continue working to extend protection to citizens," he said on Twitter, quoting Sánchez.
After the pact, everything was positive messages also from the other ministers of United We Can.
The decree, the NATO summit next week and then the debate on the state of the nation in July, with the renewal also of the Constitutional Court to change the majority from conservative to progressive, are the milestones that the Government has set to give the return to a political environment dominated by the euphoria of the PP.
The popular ones already see Alberto Núñez Feijóo on his way to La Moncloa, but the Socialists now trust with this decree to return the focus to the Executive's management, which is where Sánchez's team feels most comfortable, because he believes that at some point the citizens will reward a Government that, according to their vision, has known how to protect its citizens in the most adverse circumstances.
contain inflation
“With the measures that we have approved, the Government estimates that we are going to contain inflation at 3.5 points.
If these measures were not implemented, we would be talking about inflation of 14 points”, Sánchez underlined at the beginning of his speech.
The new aid package to combat the economic crisis resulting from the war in Ukraine, which will be in force until December 31, includes measures such as lowering VAT on the electricity bill to 5% -which Sánchez advanced on Wednesday during the control session in Congress—, in addition to extending all the fiscal measures that were in the previous decree, which again means consolidating a significant tax cut.
The 20 cents aid for fuel is also maintained.
“We are cushioning the effect and costs of the war.
But inflation is holding back the economic recovery in our country.
This war has produced extraordinary uncertainty about the European and Spanish economy, and that leads us to approve additional measures", added the President of the Executive, who has shown himself to be very "aware" of the difficulties that families are suffering due to the rise in prices, for which the Council of Ministers has approved the anti-crisis decree.
Sánchez, at a moment of the press conference, this Saturday. Andrea Comas
Among the new measures agreed in the Council of Ministers, Sánchez has announced a 50% reduction in the cost of state transport passes, and 30% in regional ones, from September 1, which the autonomies and municipalities will be able to compensate with his own funds up to 50%, Sánchez has given an example: “In Madrid, a monthly commuter pass is worth around 29 euros.
Now it goes to 14″, with full financing from the Government.
The 15% increase in non-contributory retirement and disability pensions is also relevant, which according to the president could mean an average increase of 60 euros.
In addition, the price of the butane cylinder will be limited.
Sánchez now trusts that the decree will have comfortable support in Congress, since it involves so much money in aid: “The effort is 15,000 million euros.
We make an 80% discount on electricity taxes.
We make a fair distribution of the costs of the war.
It will not be the decree that the PP would have signed, but it is a powerful package of measures in which many citizens who vote for different political options can recognize themselves.
I appeal to all forces to validate this decree law”.
After the setback in Andalusia, the Government is right to copy the measures of the PP in the #CMin to lower VAT on electricity and help the vulnerable, but it is wrong not to go further.
He is in time to take on the rest of the measures and really help the Spanish.
– Alberto Núñez Feijóo (@NunezFeijoo) June 25, 2022
From the opposition, the president of the Popular Party, Alberto Núñez Feijóo, has applauded, through his Twitter account, the measures announced by Sánchez, but has criticized the Government for not "going further" in the aid approved against the crisis .
Feijóo has also pointed out that the new decree is due to the results of the Andalusian elections on Sunday, in which the PSOE obtained the worst result in its history in the community and the PP swept an absolute historical majority.
"After the setback in Andalusia, the Government is right to copy the PP measures in the Council of Ministers to lower VAT on electricity and help the vulnerable, but it is wrong not to go further," the PP leader wrote. in the tweet.