Politics shouldn't be all about pronouncements and grand gestures. Pragmatism is also essential. In short, it's about being practical so that citizens, those governed, feel they aren't being abandoned when times get tough. And this seems to be the path the Spanish government has taken with the package of measures designed to mitigate the effects of the war in the Middle East. The conflict, whose end appears far off, has driven up gas and oil prices and, consequently, the prices of everything related to them, such as fuel and electricity. That's why the measures announced by Pedro Sánchez will amount to around 5 billion euros, far less than the more than 20 billion mobilized in 2022 following the invasion of Ukraine—but we are still in the early stages and don't know how long the war might last. The first decree focuses on reducing energy taxes, one of the services most affected by the impact of the Middle East crisis, and one that could have ripple effects throughout the economy. In addition to lowering the VAT on electricity and gas from the current 21% to 10%, as well as on biomass raw materials such as pellets and firewood, the energy production tax, currently at 7%, is temporarily eliminated and reduced from 5.5% to a special rate of 0.5%. Maximum retail prices for butane and propane are also frozen. The VAT on gasoline and diesel is also reduced, which, according to the Prime Minister's office, will result in a savings of approximately 30 cents per liter when filling up. Consumer organizations estimate that the reduction will be around 17 cents for diesel, which has seen the largest price increase. A key point, also included in the decree, is granting the National Commission for Markets and Competition (CNMC) new supervisory and sanctioning powers to prevent operators from exploiting the tax cut to increase their profit margins and enrich themselves. This is essential to prevent the tax reduction from benefiting certain companies more than citizens and, therefore, taxpayers.
Measures aimed at the most vulnerable are also included, related to the social electricity and heating vouchers and the prohibition of cutting off their basic utilities (water and energy). Aid to the agri-food sector—which suffers not only from rising fuel costs but also from the increased cost of fertilizers—is equally important, as is support for energy-intensive industries, to prevent a conflict that is not ours from harming businesses.
Regarding housing measures, such as the two-year extension of rental agreements, which have caused significant tension between the PSOE and Sumar factions within the Spanish government, Sánchez has opted for pragmatism. Therefore, these measures are included in a separate decree, knowing that Junts will once again side with the PP and Vox and vote against it. Only Yolanda Díaz's party's need to differentiate itself from its socialist partners has led to the existence of this separate document, initially destined for defeat.
In any case, faced with the political turmoil and keeping a wary eye on the composition of Congress, Sánchez is opting for a possible social safety net instead of what might be more desirable.
