2023-12-26 18:57:56
The Government plans to approve tomorrow the decree law that will extend some of the measures to cushion the rise in prices caused by the invasion of Ukraine, including the reduction of VAT on some foods for six more months, the impossibility of suspending basic supplies, the expansion of the discounts corresponding to the social electricity bonus or the suspension of evictions, according to Sumar sources. EH Bildu has announced that an agreement has been reached with them to prohibit the evictions of vulnerable people until 2025, the prohibition of cuts to basic electricity, water and gas supplies, and the extension of the TUR4 regulated tariff for community boilers.
The new package that will be approved this Wednesday in the last Council of Ministers of the year will be the eighth promoted by the Executive to continue responding to the impact of the war in Ukraine and the increase in prices, a mobilization of resources that, until now, amounts to about 47,000 million euros. Sumar also assumes the extension of other measures such as the extension of the discounts corresponding to the electric social bonus or the prohibition of layoffs due to the energy crisis for companies that have received direct aid. Specifically, the social bonus was extended to those regular consumers whose joint annual income of the cohabitation unit was equal to or less than 2 times the IPREM of 14 payments (16,800 euros) and greater than 1.5 times the IPREM of 14 payments (12,600 euros). euros). Currently the discount varies between 65% and 80%, depending on the vulnerability situation of the families.
Sources from the Ministry of Economy have recalled the existence of the elimination of the 4% VAT for all basic foodstuffs and the reduction to 5% for oils and pasta. Among the basic foods that see the 4% VAT eliminated, common bread stands out, as well as frozen common bread dough and frozen common bread intended exclusively for the production of common bread; breadmaking flours; the following types of milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered; the cheeses; eggs and fruits, vegetables, legumes, tubers and cereals, which have the status of natural products in accordance with the Food Code. According to the latest data published by the Tax Agency, these tax reductions have meant a loss of 1,573 million euros for the public coffers in January and November of this year.
One of the big unknowns is the decision that the Executive will make regarding the reduction in the price of public transport passes and multi-trip tickets (free buses and trains for regular users). Thus, the Government will have to decide whether to continue offering a 30% discount on public transport for the rest of the administrations as long as they commit to increasing this discount to 50%. It should be remembered that the Executive included an allocation of 1,440 million euros in its 2024 budget plan for the subsidy of public transport, including free trains and buses and aid to the autonomous communities for discounts on transport under regional jurisdiction. But the only thing that Sánchez has advanced on this matter is that public transport will be free for minors, young people and the unemployed, a measure that will be included in this next package.
Among what has already been committed is also the new threshold so that some 100,000 families with incomes of up to 37,800 euros per year can qualify for mortgage relief measures, from which only around 7,000 households have benefited so far. Likewise, the suspension of all early repayment commissions for mortgage loans from variable to fixed rates will be maintained in 2024 and conversions from variable to mixed rates will also be included.
Negotiation underway within the Government
The coalition government is still negotiating the extension of other measures of the so-called “social shield”, such as the reduction of taxes that support the electricity and gas bill, or the freezing of the price of butane cylinders. Thus, it is still not clear whether the VAT rate reductions to 5% on electricity and gas, wood and pellets will be extended beyond December 31, taking into account that this tax measure has had an impact between January and November collection of 728 million euros. Likewise, until December 31, 2023, the maximum price of a butane cylinder between 8 and 20 kilograms is limited to 19.55 euros, although this maximum price was last reached in the review of September 19, 2022.
Sumar sources have stressed that the negotiations are intense and that issues such as the tax on banks and energy companies are sparking debate within the coalition government. The Government agreement between PSOE and Sumar includes the maintenance of both taxes, after the two years initially planned, although in recent weeks the socialist side has suggested that there is room to soften them, since the circumstances that gave rise to their approval have been weakened.
End of the Iberian mechanism when it expires on December 31
One of the measures that has had the greatest effect in recent months to address the increase in prices, mainly energy, is the “Iberian” mechanism, which has allowed Spain and Portugal to decouple the evolution of the price of electricity from the price of gas. natural. However, the third vice president of the Government and minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, has already announced that it will decline on December 31, after pointing out that the European Commission considers that it is not “possible to put it into practice.” .
Sources from the Ministry assume that the measure will expire when it expires at the end of December, after pointing out that Spain already expected that the extension negotiated with Brussels before the summer would be the last, taking into account that the instrument has not had any effect on the processes of Marginal matching in wholesale markets since the end of February. The so-called “Iberian exception” was approved in June 2022 and was extended until the end of 2023 after the agreement reached by Spain and Portugal with the European Commission that extended the measure by seven months.
Criticisms of the PP
The PP denounces that the Government is not informing it of the anti-crisis measures that are going to be approved this Wednesday and has requested a meeting with the fourth vice president and Minister of Finance, María Jesús Montero, and the third vice president and Minister of Ecological Transition, Teresa Ribera, to agree on a battery of tax and energy measures.
The deputy secretary of Economy, Juan Bravo, and the deputy secretary of Sustainable Development of the party, Paloma Martín, announced this Tuesday at a press conference the request for this meeting on the verge of approving a new decree law to extend or modify anti-crisis aid. A text of which the PP does not know what measures it will include despite the fact that last week the president of the party, Alberto Núñez Feijóo, met in Congress with the President of the Government, Pedro Sánchez. “It is a request for a meeting, it seems logical. What does not seem logical is that we are on December 26 and the measures have to be applied on January 1 and today we still do not know what the Government is going to do,” Bravo explained. However, both Bravo and Martín have urged the Government to extend within this new decree the VAT reduction on the electricity and gas bill, the prohibition of supply cuts in vulnerable homes, the extension of the last resort rate , that basic foodstuffs remain VAT-free and that this measure be extended to meat, fish and preserved foods.
Regarding the self-employed, they have requested that a reduction in installment payments and withholdings be included in the anti-crisis decree. But the PP has also insisted on the deflation of personal income tax so that the working class can see their salary increase compensated without being affected by inflation. In terms of unemployment, Bravo has warned that, removing the “artifice” of fixed-discontinuous contracts, Spain has approximately 3.3 million unemployed people, and has denounced the lower GDP forecasts for next year and the high poverty rate. childish.
Paloma Martín, for her part, has criticized a “wrong” energy policy carried out by Teresa Ribera’s department, among other reasons because energy poverty has “triggered”, with more than three million homes in this situation, and because Spain is the country in the European Union that has purchased the most Russian gas in 2023. It has denounced that the Government’s energy policy has been “lacking” in structural measures and has meant moments with “very high” electricity bills. But also due to the uncertainty about what the Government is going to do with the tax aid on the electricity and gas bill.
#Government #studying #antiinflation #measures #extend #PSOE #Sumar #clash #scope