The Minister of Finance and fourth vice president of the Government, Maria Jesus Montero, already prepares the way for the withdrawal of some of the measures approved in the anti-crisis packages to contain the inflation launched by the previous Executive. It will possibly be the next December 27 when an extraordinary Council of Ministers approves the new decree-law and from the economic area of Pedro Sánchez’s cabinet they already make it clear that it is Brussels that asks that this aid be reformulated. “The European Union has been advising to withdraw stimulus measures,” said Montero in an appearance before the media in Seville, where he attended the Plaza de España awards ceremony presented by the Government Delegation.
Montero assured that the Government is “working” and that “before the end of the month, in ten or fifteen days” there will be a new decree-law that will reformulate what was called social shield and that Sánchez himself will possibly present. “We work within a context where Europe asks to withdraw extraordinary stimuli”, added Montero, making it clear that this will be the path that the Executive will follow. The anti-crisis decree expires at the end of the year and the last extension of it mobilized a total of 3.8 billion euros in the second half The exercise.
Food and transportation
Sánchez already advanced during his investiture that measures such as Transport aid for young people and the unemployed will remain in forces. Public transport would be free starting next January 1 for minors, young people and unemployed people, following the path of September 2022, when free local and medium-distance trains were approved.
Likewise, the president announced that the descent of VAT for food until June 2024. This reduction has existed since January 2023, when it was approved to combat inflation. It will be extended in its current terms, excluding meat and fish. As until now, the elimination of the 4% VAT is expected to apply to all basic foodstuffs (bread, flour, milk, cheese, eggs, fruits, vegetables, legumes, potatoes, cereals) and the 10% reduction 5% to the oil and pasta.
Prices moderate
The latest data published yesterday by the National Institute of Statistics (INE) confirmed a slight relaxation of prices in Spain, of three tenths compared to October, and the end of November at 3.2%. Food has begun the de-escalation of prices, although products such as oil continue to rise, and fuels are the ones that benefit the most from the reductions approved by the Government, closing the year with the price of gasoline at annual lows. A fact that will allow the Council of Ministers to justify a withdrawal of fuel aid. The Government extended until December 31, 2023 the bonus of ten cents per liter of diesel for the professional transport sector by highway.
It was already known that the Government will not approve new measures to combat the rise in prices, as some of its investiture partners have demanded, as announced El Periódico de España, from the Ibérica Press Group. The Ministry of Finance rules out this possibility despite the fact that the Council of Ministers gave the green light this Tuesday to a spending ceiling for 2024 with a record figure of 199.12 billion. The socialists embrace the objective of reducing the deficit to 3%, due to the return of fiscal rules, so as not to extend new aid in the anti-crisis package. The last extension of the decree mobilized a total of 3.8 billion in this second half of the year.
Light and gas
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The current anti-crisis decree contemplates help on the electricity and gas bill on which the Government has not yet made a definitive statement. Sumar partners are inclined to extend these subsidies on the electricity bill but the PSOE is inclined to heed the recommendations from Brussels. Reductions in the Special Tax on Electricity and VAT have helped contain the electricity bill, which could increase again if the bonuses are withdrawn. The suspension of the tax on the value of production of electrical energy (IVPEE), which taxes electricity generation at 7%, does not appear on the bill because it is paid by electrical companies, but its withdrawal has helped contain prices because energy companies They end up transferring it to the citizen. Gas has also enjoyed the VAT reduction and a direct subsidy to the regulated rate of last resort (TUR).
Brussels has been recommending the gradual withdrawal of some of these bonuses for months, encouraging Spain to limit spending and allocate savings to reducing the deficit. In this sense, it encourages focusing aid on the most vulnerable companies and households.