Spanish Prime Minister Pedro Sánchez announced Friday a sweeping package worth €5 billion ($5.8 billion) aimed at cushioning the economic impact of the Middle East war, including a “drastic reduction” in energy-related taxes.
Speaking after an emergency cabinet meeting, the Socialist leader said the 80-measure package was necessary to shield households and key sectors from surging costs.
“Extraordinary situations require extraordinary responses,” Sánchez said, calling it the “largest social and economic shield” being implemented in the European Union.
“Clearly, these measures will not prevent the effects of this illegal war from reaching Spain, but they will at least mitigate their impact and make them somewhat more bearable.”
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The package, set to take effect Saturday following publication in the official gazette, includes cuts to value-added tax on gas and fuel expected to reduce pump prices by as much as €0.30 per litre, or roughly €20 per tank for the average car.
Sánchez also said the government would cap the maximum price of butane and propane.
The government will also slash electricity taxes by 60 percent, suspend a production tax and reduce the value-added tax on electricity to 10 percent from 21 percent.
Additional support includes a direct subsidy of €0.20 per litre of fuel for transport operators, farmers, ranchers and fishermen, along with equivalent aid for fertiliser purchases.
‘Extremely angry’
Sánchez also announced a decree introducing a “temporary freeze” on rents in Spain, which like other European nations is grappling with a housing crisis as rents skyrocket.
This measure still requires approval from parliament, where the government lacks a majority.
It was included under pressure from Sánchez’s junior coalition partners, the far-left Sumar party.
“I am extremely angry about the situation the world is in, which certain decisions and governments are pushing us into,” Sánchez said, repeating his opposition to the war being waged by the United States and Israel against Iran.
“Spaniards will have to bear a cost of five billion euros — money that could have been spent on scholarships, healthcare or social services.”
Sánchez defiantly refused to let US troops use its bases to attack Iran at the start of the conflict, a move that drew sharp criticism from US President Donald Trump.
He said Spain was the “best prepared” country to face the crisis thanks to its higher reliance on renewable energy.
Renewable power makes up around 55 percent of Spain’s energy mix, while the country imports most of its crude oil from the Americas and Africa.
The EU’s fourth-largest economy has in recent years registered growth rates far higher than its peers, notably thanks to domestic consumption, tourism and exports.
