The Spanish government agreed on Saturday to an extra €9 billion ($9.5 billion) in new spending to tackle the economic effects of the war in Ukraine.
Prime Minister Pedro Sánchez said after an extraordinary Cabinet meeting that it had been decided to extend the measures of the first relief package totalling €16 billion for another six months until December 31 and to launch new aid measures.
The left-wing minority government’s plan still must be approved by parliament.
The new measures to cushion the consequences of the war and the sharp rise in energy prices include a reduction in VAT on electricity from 10 to 5%, reductions in public transport subscription rates by 30 to 50%, a 15% increase in lower old-age and disability pensions and a special payment of €200 for people earning less than €14,000 a year.
Sánchez explained that they were also considering an increase in taxes on the excess profits of electricity companies, namely on high additional profits as a result of the Ukraine war. The plan is still being refined but it should be presented soon.
With a view to the upcoming debates and votes in the Congress of Deputies, Sánchez called on “all political forces” in the country to support the announced measures.
This week he had appealed to the opposition: “I wish that instead of complaining, instead of criticising, you would support this royal decree for the good of families, businesses and industry in our country.”
At the end of April, parliament approved the first anti-crisis plan only by a narrow majority after Sanchez was able to persuade lawmakers from smaller parties to vote in favour.
Direct subsidies and tax relief amounting to €6 billion as well as a further €10 billion in state-supported loans were decided at the time.
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