The Spanish government will approve the shield "as soon as possible" to mitigate the impact of the war

MadridThe Spanish government is working tirelessly to approve a package of measures "as soon as possible" to mitigate the economic impact of the war in Iraq. Although on Thursday morning, Second Vice President and Minister of Labor, Yolanda Díaz, asserted that some measures would be approved at the cabinet meeting next Tuesday, government sources have downplayed this expectation. "We are working to make it happen as soon as possible [...] The government's intention is to work swiftly and efficiently to have a text that incorporates the most effective measures possible," sources from La Moncloa (the Prime Minister's official residence) indicated. On Thursday morning, the national government held a meeting with the major unions and employers' associations to discuss the economic response to the conflict in the Middle East. The Minister of Labor also stated that among the measures, which would come into effect immediately upon publication in the Official State Gazette (Official State Gazette), the ban on dismissals for energy-related reasons, mobility plans, and tax measures for the most affected sectors would be incorporated. It has also opened the door to housing measures, such as freezing rents or limiting evictions. "We are calibrating the measures day by day, and we will approve some next Tuesday," he said.

This Tuesday's meeting is at the highest level. The main economic portfolios of the state executive—the Ministries of Economy, Finance, Labor, Energy, and Social Security—have met with the union leaders of CCOO and UGT and those of the Spanish employers' associations CEOE and Cepyme to advance the package of measures that the Moncloa Palace is working on.

The Minister of Economy, Carlos Cuerpo, acknowledged a few days ago that the impact of the war was already being felt in families' wallets, and this Wednesday he anticipated that in the next four to ten days the increase in the price of oil and gas will be passed "fully" on to citizens. She was referring to fuel prices, but also to the increase in electricity bills for some customers and, later, to the cost of the shopping basket. In this regard, the government wants to push through a package that includes more than just energy measures. And this could involve reviving some of the social safety net proposals that failed to pass in Congress a few weeks ago and which the executive branch should approve again, as Díaz has indicated. For now, unions and employers' associations haven't made major demands and are expected to do so at Thursday's meeting. In any case, the unions, or at least CCOO has expressed this view, favor proposals that limit prices, while the business sector welcomes tax breaks and incentives—a dichotomy that was already seen during the war in Ukraine.

Third Vice President and Minister for Ecological Transition, Sara Aagesen, has already detailed that the plan envisioned by the Spanish government will include both short-term measures—that is, one-off measures—and structural measures. The short-term measures are intended to protect businesses, workers, and families, and could include proposals already approved in 2022 following the outbreak of the war in Ukraine: for example, fuel subsidies or VAT reductions on food. The structural measures would serve to strengthen strategic autonomy and the energy transition, the minister said, with the aim of being "less exposed" to price volatility.

Throughout Wednesday, the Ministries of Energy and Economy also met with other sectors directly or indirectly affected by the war in the Middle East. They met with the gas and oil sector and with large energy-consuming industries, while on Thursday the Minister of Economy will meet with the distribution and logistics sectors.