These are the new measures agreed by the Government in the anti-crisis decree | Economy

The President of the Government, Pedro Sánchez, appeared this Saturday after the extraordinary Council of Ministers to announce the measures included in the anti-crisis decree, with which the Executive intends to contain the inflation caused by the war in Ukraine by 3.5 percentage points and It will be valid until December 31. Without them, he has said, the IPC could climb to 13% or 14%. “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 an extraordinary uncertainty about the European and Spanish economy, and that leads us to approve additional measures”, stressed Sánchez, who has shown himself to be very “aware” of the difficulties that families are suffering due to the rise in prices.

The decree, approved at the extraordinary meeting, represents a budgetary effort of 9,000 million euros. In total, by the end of the year the Executive will have invested 15,000 million euros in extraordinary measures. In addition to extending until the end of the year all the temporary aid approved in the spring decree —such as the aid of 20 cents per liter on fuel, the extension of which will cost just over 4,000 million to the public coffers, the reinforced social bond or the suspension evictions—, the following shock measures have been agreed:

  • A direct aid of 200 euros for households with an income of less than 14,000 euros per year and assets of less than 43,196 euros, discounting the value of their habitual residence. The purpose of the one-time check is that these families can face the increase in the price of basic consumer goods, such as food, which have skyrocketed in recent months. The Government estimates that this measure will benefit 2.7 million households.
  • A 15% increase in non-contributory retirement and disability pensions, as well as the minimum vital income (IMV). The reinforcement of both benefits will benefit more than 800,000 households, according to the calculations of the Executive. The recipients of any of them will not be eligible for the extraordinary aid of 200 euros.
  • A 50% reduction in the cost of passes and multi-trip tickets for Renfe and the bus lines that operate under the state concession formula. It will come into force from September 1, to prevent the aid from being largely absorbed by tourists who visit Spain in summer. The reduction, paid for with public money -221 million euros, which the Government will cover with an “extraordinary credit”, will be 30% in the case of regional or municipal services. The communities and the Town Councils will be able to complete this reduction until reaching 50%.
  • A new tax that will tax the extraordinary profits of large energy companies. It will not only affect electricity companies, but also oil and gas companies, the ones that have seen their profits increase the most due to the energy crisis. It will come into force from January 1, 2023, but will cover the profits harvested in 2022. It will reach Congress “in the coming weeks,” according to Executive sources. “The objective”, they say, “is to distribute the burden of the effort due to high inflation and that those sectors that are obtaining greater benefits due to the rise in prices of energy products increase their fiscal contribution”. The measure, of which more details are unknown for now, follows in the wake of those approved in Italy or the United Kingdom.
  • A drop in VAT on electricity from 10% to 5%, as Sánchez announced this week in Congress. It will benefit practically all Spanish households, freelancers and companies (27.7 million), regardless of the type of rate they have contracted and their usual consumption. The suspension of the generation tax and the reduction of the special tax are maintained to the minimum allowed by the European Commission: 0.5%, compared to the usual 5.1%.
  • The freezing of the price of the butane cylinder at 19.55 euros (the price set in the last revision, in May) until the end of the year. Usually, the price is reviewed every two months.

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