Spain, like other European countries, is facing a cost of living crisis exacerbated by the Russian war in Ukraine, which has led to a rise in energy prices.
Spanish Prime Minister Pedro Sanchez on Tuesday announced a package of new measures worth ten billion euros ($10.65 billion) to counter the effects of inflation next year.
This is the third large package in 2022, bringing the total aid approved by the Spanish government since early this year to 45 billion euros.
Spain, like other European countries, is facing a cost of living crisis exacerbated by the Russian war in Ukraine, which has led to a rise in energy prices.
Sanchez said that the package includes a one-time grant of 200 euros to about 4.2 million families with an annual income of 27,000 euros, as well as the abolition of value-added tax on basic foodstuffs and the extension of tax cuts on energy bills until the first half of next year.
He added in statements to reporters that the aid packages provided by the Spanish government so far helped the country increase economic growth this year, which he estimated at more than five percent, which is higher than the Bank of Spain’s latest forecast of 4.4 percent.
Abolition of value added tax
The Spanish government also announced the abolition of the value-added tax on basic commodities in order to compensate for the sharp rise in prices.
The new measures focus on food products, whose prices increased over a year by 15.3 percent in November.
Over the next six months, “the value-added tax will decrease from 4 to 0% for all basic consumer goods,” such as bread, milk, cheese, fruits, vegetables and cereals, Sanchez said.
As for the value-added tax approved for oil and pasta, it will fall from 10 to 5 percent.
The other prominent measure approved on Tuesday during the last cabinet of this year is to provide “200-euro assistance” to families earning 27,000 euros or less per year, in order to “compensate for the high prices of food products.”
As for reducing the price of fuel by 20 cents per liter, which currently benefits all drivers, it will become, as of January 1, the monopoly of “the sectors most affected” by inflation, that is, transportation, agriculture, fishing, and marine companies, according to what the Socialist Prime Minister announced.
Since Russia’s invasion of Ukraine on February 24, Spain’s leftist government has ramped up aid in an effort to contain inflation that has soared across the European continent.
And after inflation reached 10.8 percent in July, its highest level in 38 years, it gradually receded to 6.8 percent in November.
However, this decline has not yet covered the food sector, whose prices have been rising.
