The Corps acknowledges that the war in the Middle East is already being felt "in people's pockets."

Madrid / BrusselsThe war in Iran and its ramifications in the Middle East are not only putting pressure on commodity prices like oil and gas, but are already being felt "in the pockets of Spaniards and in their daily lives," as Economy Minister Carlos Cuerpo acknowledged this Monday from Brussels. Since the US and Israeli attack on Iran, the Spanish government has been monitoring the impact of the conflict on the Spanish economy and is open to taking measures. "This government will respond," government sources indicate. The current scenario has revived the specter of four years ago, when the Russian attack in Ukraine unleashed an unprecedented energy and inflationary crisis: the price of a MWh... pool Electricity, for example, is breaking all records.

"You only have to look at what's happening at gas stations with the price increases at the pumps," added the Socialist leader, who pointed out that in one week gasoline has already risen by about 15 cents per liter, and diesel by about 28 cents. A warning that Sánchez also issued this Monday put a "cap" on fuel prices. In fact, four years ago the government was forced to approve a subsidy on part of the fuel cost. But Cuerpo, who also noted that the price increase is already affecting sectors such as transport, agriculture, and fishing, has asked for more time to assess the situation and implement possible measures.

Moncloa has been studying proposals for days, although it has not yet announced which ones or when they intend to begin implementing them. The Minister of Labor, Yolanda Díaz, met last week with social partners—the major unions and employers' associations—to discuss what measures could be approved. In fact, this Monday, the CCOO and UGT unions demanded that the Spanish government approve a new "social safety net" to address the economic shock of the war. At last week's meeting, Díaz presented some of the policies approved in the past, which she highlighted again this Monday: temporary layoff schemes (ERTEs) for workers, the ban on dismissals, aid to companies, and the activation of measures such as the RED mechanism, which allows for a reduction in working hours. "There is a range of measures that don't even need to be approved; they are already available," the minister stated, also speaking from Brussels.

All of this comes after the social safety net, which included a moratorium on some evictions and a ban on cutting off basic utilities, was defeated in Congress on February 25th by votes against it from the PP, Vox, and Junts. If the Spanish government takes steps to implement wartime measures, it could reinstate this package, as Sumar, the junior partner in the coalition government, wants. They see it as an incentive not to vote against it again. "We are clear on the measures that can be implemented and we will put them on the table as the situation develops," Cuerpo insisted before entering the Eurogroup meeting taking place this week in Brussels.

The Minister of Economy also expressed support for jointly releasing oil reserves to mitigate the soaring prices of this fossil fuel, a proposal discussed on Monday but ultimately ruled out by the G-7, at least for the time being.

Pressure from the PP

The war in the Middle East could undermine one of the key selling points of Pedro Sánchez's government, which it always clings to in defense of its administration and its term in office: the strong performance of the Spanish economy. The central government immediately issued a message of "reassurance," pledging to make all available resources accessible to the public. Beyond the Sumar coalition, Podemos, one of the investiture partners, has also been pressing for the swift approval of an economic response, and the Basque Nationalist Party (PNV) has submitted a non-binding resolution to protect energy-intensive industries. The People's Party (PP) has also made its move, deciding to bring to Congress a reduction in the VAT on energy, the elimination of the electricity generation tax, and an update to the income tax brackets, among other measures. Sources within the PP accuse the Spanish government of "doing nothing," unlike in other countries. According to these same sources, all of this should serve to compensate consumers at a time of rising gas and oil prices.