ISSN 2330-717X

Spain: PM Sánchez Announces New Package Of Economic And Social Measures To Tackle Energy Crisis

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Spain’s Prime Minister Pedro Sánchez appeared before the Lower House of Parliament earlier this week to report on the European Council of 7 October and the measures adopted to deal with the crisis caused by the war in Ukraine.

Pedro Sánchez explained that these new measures will be approved in the next Council of Ministers, will have an impact on 40% of Spanish households and will involve the mobilisation of an additional €3 billion from the General State Budget.

The Social Tariff for Electricity will be strengthened to benefit 1.3 million households, increasing by 15% the amount of energy eligible for discount and increasing the discount percentage to 65% and 80% for vulnerable and severely vulnerable households, respectively.

A new category of electricity consumers entitled to a 40% discount on their bills will also be temporarily created for low-income working households. This will reach an additional 1.5 million households.

The Social Tariff for Energy for vulnerable households will double the budget in both 2022 and 2023. This will raise the amount of the minimum allowance to €40 (equivalent to the cost of two butane cylinders) and double the amount of the average allowance to around €375 per household.

Another relevant measure will be aimed at controlling heating and hot water costs in 1.7 million households with communal gas boilers. To this effect, the protection already granted by the regulated tariffs (TUR 1, 2 and 3) will be extended to households that are part of communities of neighbours with centralised natural gas boilers, creating a new regulated tariff for which the quarterly price increase will be capped until the end of 2023. The current offers mean that around 1.7 million households will benefit from a reduction of more than half of their bills compared to what they would pay otherwise.

Cushioning the impact of war

Sánchez recalled that the announced measures are in addition to those adopted in the National Plan of Response to the Consequences of the War in Ukraine in March, the Royal Decree on Urgent Measures in June, the Shock Plan for Energy Saving and Energy Management in Air Conditioning in August and the More Energy Security Plan, approved this week. The aim of all of them is to “cushion the economic impact of Putin’s war on the social majority of the country and on the most vulnerable groups”.

This social response will continue in the next General State Budgets, which will allocate 58.5% of its budget “to protect the middle class and the working men and women of our country”.

Sánchez, who has asked for the support of the parliamentary groups for these accounts, has stated that they will allow progress to be made in social and territorial cohesion and in the modernisation of the productive fabric and infrastructures. He also underlined that “they represent the greatest commitment to young people by a government in the history of Spain”.

Strengthening the welfare state and social justice

Sánchez assured that the government’s line of action is in accordance with the new social consensus that dominates in the West, characterised by collaboration as opposed to competition, collective interest as opposed to individual interest, public-private collaboration, fiscal justice and the strengthening of the welfare state “to give security and prosperity to our societies”.

Sánchez defended Spain’s active role in building this social consensus, especially in the EU, where pioneering proposals have been made such as the recovery funds, the extension of the Iberian mechanism, the reform of the electricity market to decouple it from the price of gas and the limitation of the income of companies that produce low-cost electricity.

Support for Ukraine

Last, Pedro Sánchez maintained that the unity and solidarity of Europe and its allies, as well as economic sanctions, are ensuring that Putin is currently not winning the war, and reaffirmed the humanitarian, military and financial support for Ukraine: “We must continue to support the victim against the aggressor”.

The international order, he added, must be based on rules so that the strongest do not win, where multilateralism prospers and conflicts are resolved through dialogue rather than force.

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