Von der Leyen dismisses Sánchez's request to suspend fiscal rules due to the energy crisis

Madrid/BrusselsUrsula von der Leyen took only a few hours to slam the door on the request by Pedro Sánchez and Giorgia Meloni to suspend fiscal rules to confront the energy crisis derived from the war in the Middle East. The President of the European Commission was not at all ambiguous and emphatically dismissed the request from the Spanish and Italian leaders, who had also asked her —unsuccessfully— to apply an additional tax on the extraordinary profits that energy companies are making from the rising cost of fossil fuels. "The clause [to suspend fiscal rules] can only be activated in case of a severe economic recession in the eurozone or the European Union as a whole. Fortunately, this is not the situation," Von der Leyen responded at a press conference, although she omitted that the community bloc has applied exceptions with the deficit cap to finance the great European rearmament.

The Spanish Prime Minister has called on the European Union for "more ambition" and has asked for European funds to electrify the economy to be extended for another six or twelve months, and, on the other hand, to suspend fiscal rules when it comes to investment in renewables. In turn, the Italian Prime Minister, who has urged Brussels to be "more courageous" in presenting energy measures, has requested exceptions in deficit compliance —Italy has narrowly exceeded the cap— in order to subsidize part of the electricity bill for Italian citizens and companies, as the European Commission itself recommends in the energy plan presented this Wednesday.

"We need more resources for the green transformation," proclaimed Sánchez, in light of the effects that the increase in oil prices due to the conflict in the Strait of Hormuz is having on all European Union countries. "Since the war began, fossil fuel imports have increased by 24 billion euros; 500 million a day," recalled the Spanish Prime Minister.

On the other hand, the Spanish president has reaffirmed his no to the war in Iran and his support for Ukraine, as well as for international law and the multilateral order. In this regard, he insisted, as the Minister of Foreign Affairs, José Manuel Albares, already did on Tuesday, that the EU must suspend the association agreement with Israel. "A different yardstick is used with Ukraine," denounced the Spanish president, who advocates for defending the territorial integrity of Ukraine in the same way as that of Lebanon, the West Bank, and Gaza. "This detracts from our legitimacy. The law of the strongest leads us to a weaker world, to more deaths and more suffering," he stated.

Key to the Spanish economy

In principle, the European Next Generation EU funds, linked to recovery plans -born with the covid-19 pandemic-, end on August 31, 2026. Despite loopholes being found for projects receiving this money to be executed beyond this date, European manna will cease to flow from that day onwards. Countries, however, have had to make real efforts to try to meet the goals and commitments to receive the funds -Spain has already received 71.4 billion euros from the European Commission.

For Pedro Sánchez's government, the electrification of the economy is key, considering that the aim is for 80% of the energy consumed by 2030 to be renewable. Beyond deploying green technologies (photovoltaic, wind, etc.), this requires investment to strengthen the electrical system and its infrastructures (transport and distribution networks), but also key technologies like storage. Nevertheless, last summer the European Parliament already proposed extending these funds by 18 more months to ensure, precisely, the correct execution of projects. The European Commission would have the final say, and so far, it has been reluctant.