Business & Economy

Spain to boost state aid, subsidize fuel amid economic fallout of Ukraine war

Madrid, Mar 28 (EFE).- Spain’s prime minister Pedro Sánchez on Monday unveiled a raft of extraordinary financial policies including state loans, tax breaks, rent control and fuel subsidies in response to the economic fallout of Russia’s Ukraine invasion.

The 16-billion-euro ($17.5bn) package will be split between 6 billion of direct investment and 10 billion in state-backed credit for businesses dealing with rising energy prices.

Sánchez, whose minority Socialist Party-led coalition holds a fragile voting majority in parliament thanks to a motley crew of regionalist parties, said fuel prices would be subsidized at a rate of 20 cents per liter, 15 cents of which would come from the state with the remaining 5 cents being stumped up by suppliers.

The measure comes as Spain grapples with opposition-backed transport protests against sky-rocketing fuel prices, which have been exacerbated by Russia’s invasion of Ukraine.

The government plan aims to help low-income families by limiting rent to an increase of 2%, boosting the country’s minimum income scheme by 15% and extending the household energy benefit program to a further 600,000 families.

“I think it is a serious and ambitious plan, and also a complex one because the crisis is asymmetrical and therefore we have to act within certain sectors,” Sánchez told a Madrid forum organized by Europa Press and management consulting firm McKinsey, where he announced the plan.

“But the emergency aid package that the council of ministers will approve tomorrow and that will last until June 30, will cost approximately 6 billion euros in direct aid and tax reduction and 10 billion euros in ICO credits to mitigate the impact of the crisis on families and businesses in our country.”

A further 1 billion euros was earmarked for the country’s cybersecurity sector, including a new cybersecurity center, which will help strengthen the country’s 5G rollout in the ambit of transport, medicine and energy.

Over 360 million euros of state-backed loans will be made available to the agricultural sector with a further 68 million earmarked for the fishing sector, both of which are struggling with rising fuel prices, the prime minister added. EFE


Related Articles

Back to top button