You are currently viewing Sánchez will negotiate with parties and social agents a strong reduction in energy taxes
The President of the Government, Pedro Sánchez, with the Secretary General of the OECD, Mathias Cormann this Monday in La Moncloa.FERNANDO CALVO (Europa Press)

The Government will seek an agreement with the social agents and the parties to undertake a sharp reduction in energy taxes in order to alleviate the escalation of prices. In parallel, the president will begin a tour of European capitals to convince member countries of the need to cut the connection between the price of gas and electricity, a proposal that Spain has defended without success for months, but that Pedro Sánchez He believes that now he can arouse a favorable majority feeling. The socialist leader has promised in an interview in the sixth this Monday night that, just as it happened during the pandemic, the Executive is going to approve as many measures as are within its reach to alleviate the effects of the war in Ukraine on the Spanish population. On March 29, the Council of Ministers will approve the plan that will include tax cuts.

“The Government of Spain is going to do everything in its power to protect the most vulnerable and to cushion the consequences of this war,” said Pedro Sánchez, making it clear that the Executive is preparing an ambitious package of measures. The president defends that tax cuts are not the most important thing to contain energy prices, but that the important thing is to achieve the decoupling between the price of gas and electricity, but he will also act on taxes. Sánchez places high expectations on the European Council on March 24 and 25, that he will be able to decide if he acts in the direction that Spain has been claiming to separate both concepts. The Government wants to seek agreement with the social agents and the parties at the same time, because the measures must be approved in a royal decree validated by Parliament.

Sánchez believes that the Executive has instruments to prevent inflation from rising above two digits, and asks the parties for unity to carry out the plan. The president warns that the situation due to Putin’s war is very delicate and he has not ruled out the scenario of a Third World War. Sánchez has recalled that Russia is an “authoritarian” and “autocratic” nuclear power and defends that Vladimir Putin must be stopped in Ukraine because he cannot follow that imperialist drive in other states, such as Poland. The seriousness of the war has also caused Sánchez to bet now on increasing the Defense budget in Spain until it complies with the NATO commitment to dedicate 2% of the Gross Domestic Product (now it is 1%). Spain will increase the shipment of weapons to the Ukrainian resistance and Sánchez has recalled that, as a member of NATO, if Putin attacks a country in the alliance, the country is obliged to show solidarity and respond to the attack together with its partners.

Political pressure is mounting on the government to intervene in taxes on electricity and fuel in order to alleviate the sharp rise in prices as a result of the war in Ukraine. One day after the Conference of Presidents agreed to intensify tax cuts to cushion the effects of the war on household pockets, both United We Can and the PP, from different perspectives, have increased pressure on the Prime Minister to undertake an ambitious intervention in taxes that allows for a substantial reduction in the bill paid by citizens. The junior member of the Executive considers the agreements of the Conference of Presidents “insufficient”, while Alberto Núñez Feijóo accuses the Government of “riching himself” with the collection of taxes on electricity, gas and gasoline.

The delicate economic situation, with runaway energy and fuel prices, serves the government’s junior partner and the main opposition party to impact the PSOE and demand stronger and faster measures. The Executive is working on it, studying a package of measures, but in part it requires a European negotiation to achieve a change in the regulation that allows lowering energy prices, which requires more time. The Government has also opened the door to a tax reduction on gasoline and diesel, since 45% of the final price of diesel at pumps and almost 50% of gasoline are taxes. The autonomous barons supported Pedro Sánchez on Sunday to negotiate in Europe in an unusual joint statement, but the political truce due to the consequences of the war in Ukraine has barely lasted a few hours.

On the one hand, the minor partner in La Moncloa, United We Can, pushes to differentiate itself from the PSOE asking to act on the benefits of electricity companies and a tax reform to tax the highest incomes, which the socialists have kept in a drawer for the moment .

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Ione Belarra’s party agrees with the tax cut agreed this Sunday between the Government and the regional barons at the Conference of Presidents, but asks to go further. The formation insists on its claims so that the crisis is paid by “the benefits that fell from heaven” of the electricity companies and that the Executive launch a “progressive tax reform” contemplated in the Government pact with the PSOE that, for the moment, the Treasury has paused.

“The fact that certain agreements have been reached at the Conference of Presidents means that there is a general consensus that it is urgent to take a series of measures,” the spokesman for Podemos, Pablo Fernández, greeted this Monday at a press conference. who, however, advocates that these be accompanied by other “more ambitious” initiatives. Last Friday, before the party’s governing body, Belarra called for a “new social and green shield” to deal with the crisis arising from the conflict in Ukraine. It included an “energy emergency plan” that contemplates an additional cut in the benefits that fell from the sky of the electricity companies and an aid of 300 euros to families to pay electricity and gas bills, in addition to a tax reform ” urgent” to “shield” public services and that allows the creation of a “state care system” that collects the income of 100 euros per month for child rearing and the extension of maternity and paternity leave, which his ministry negotiates in the law of family diversity.

Despite the pressure from Podemos, the plans of the Ministry of Finance, led by the socialist María Jesús Montero, are not for now the rate hike. Ten days ago, in the presentation of the report of the committee of experts to undertake this reform, the head of the department ruled out an imminent rise due to the escalation of the war, which caused a new friction with the minority partner, who had already announced in February a reform proposal that bothered Montero.

The formation of Belarra also proposes that the Government confiscate “all the assets” of the Russian oligarchs in Spain to use those economic resources for humanitarian aid for the Ukrainian people, “either in their own country or in the initiatives to host refugees on Spanish soil”, he specifies. The party believes that all visas granted to Russian billionaires and obtained by extraordinary means as a result of their investments in Spain should be “immediately revoked”.

The PP of Alberto Núñez Feijóo also urges Sánchez, just one day after having signed an agreement with the president that already contemplates more tax reductions to cushion the impact of energy prices on the bills that families pay. The Galician baron, one of the main architects of that pact as leader in chest of the PP -although he will not be elected president of the conservatives until the congress on April 1 and 2- raised this Monday the tone against the Government and accused him of “lining” with the collection of taxes on electricity and gasoline, despite that the autonomous communities receive 100% of the collection of the Tax on Electricity and 58% of the Tax on Hydrocarbons, which they use to pay for public services.

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