400 million euros in aid: the Government's plan to deal with the effects of the war in the Middle East

BarcelonaSalvador Illa announced on Monday an initial aid package to address the effects of the war in the Middle East on the Catalan economy. Specifically, on Tuesday the Catalan government will approve the mobilization of €400 million in direct aid, tax breaks, and financing instruments to protect the country's businesses and families. The aid will focus particularly on transportation, agriculture, and fishing, the sectors most affected by the war, and the package is expected to be expanded depending on how the conflict evolves. This set of measures is in addition to... the protections deployed last week by the Spanish governmentThe aid that the Government plans to allocate to the economic sector, which will amount to up to 216 million euros, will be conditional on companies wishing to participate preserving jobs. The main pillars of the aid are an expansion of two financing lines between the Department of Economy and Finance and the Catalan Finance Institute (ICF), direct aid to the agricultural and fishing sectors, and tax exemptions. Business advisory and promotional services are also planned. The plan announced by Salvador Illa includes allocating 154 million euros to accelerate the energy transition and sustainable mobility. Regarding social aid, as the president explained at a business conference organized by ExpansionThe measures will be aimed at ensuring that the most vulnerable families can cope with food and energy expenses. To this end, the Catalan government will mobilize up to €30 million to create an open line of aid for families and to offer support to municipalities by reinforcing emergency social assistance, for example. Coordination of temporary layoff schemes (ERTEs) due to force majeure with the Spanish administration is also planned to protect job stability. "I make an explicit appeal for everyone to act in the general interest and the common good," said Illa, who demanded "responsibility" from large companies and the financial system.

Reynés sends a message of "calm"

At the same business meeting, Naturgy's president, Francisco Reynés, assured that the gas supply is guaranteed despite the current context of geopolitical instability. Reynés also took the opportunity to send a message of "calm" to the public in the face of the volatility of the energy markets. According to the energy company executive, in recent weeks there has been a "supply shock" impacting prices, with constant fluctuations depending on the expected duration of the conflict. In recent months, as Reynés explained, Naturgy has strengthened and diversified its supply sources, which now allows them to guarantee gas in the short term. However, the impact of the conflict on the economy could be significant. At the meeting ofExpansionCaixaBank CEO Gonzalo Gortázar has lowered Spain's 2026 growth forecast from the initial 2.4% to 2% due to the war in Iran, if energy prices continue to rise. Gortázar also warned that an interest rate hike to curb inflation could further slow economic growth. Meanwhile, Aena's Chairman and CEO, Mauricio Lucena, cautioned that the main risk of the war in the Middle East is not so much the direct impact on air traffic as the economic repercussions. "What worries us most is the potential deterioration of the macroeconomic outlook," he said.