Sánchez announces a tax on banks and free commuter train tickets

MadridThe president of the Spanish government, Pedro Sánchez, has taken advantage of the state of the nation debate in the Spanish parliament to announce a 100% rebate for Renfe commuter and medium-distance train tickets and also a new tax on banks. "Tickets for more than one trip will be free between September 1 and December 31," announced Sánchez, who just before had pointed out the need to promote the use of public transport as one of the keys to fighting against the increase in energy prices. It should be borne in mind that the Spanish government had already announced a 50% discount on season tickets, but now it will be increased to 100% on trains operated by [state operator] Renfe. The measure joins the 30% rebate on metropolitan transport, which the Catalan government will complement to achieve a 50% in reduction in fare prices from September 1.

Sánchez also announced a new exceptional and temporary tax on banks, which he has accused of benefiting from the increase in interest rates. With these announcements, Sánchez is staging the turn to the left that he had already initiated with the tax on electricity firms that he had announced a few weeks ago and which was demanded by his coalition partners, Unidas Podemos, as well as by his parliamentary allies ERC and EH Bildu.

The Spanish President has said that he expects to collect €1.5bn per year with this tax on banks, which would be in force for two years. He has also specified that with the tax on electricity companies, which he announced on the day the last royal decree of measures against the war was approved, he expects to collect €2bn a year. It will be a tax on the extraordinary benefits the "dominant energy groups in the electricity, gas and oil" are having, he said. The PSOE leader went on to describe social measures, such as a new grant of €100 per month which will be received between September and December by all students over 16 years of age who are currently receiving a state grant.

Source of inflation

Sánchez has stressed that he "will work hard to defend the working middle classes" even if this makes him an "uncomfortable ruler for the powerful". The Spanish president tried to show empathy and started the debate admitting that inflation is punishing households in a way not seen in decades. "I am fully aware of the daily difficulties people face to make ends meet," he said. And he added: "And I am aware that people do not want us to explain what is going well, but rather to focus on what is going badly, and above all, on the measures we are taking". The Spanish President took advantage of the debate to give a lengthy explanation of the causes of inflation, which he basically attributed to bottlenecks in the supply chain of raw materials and the Russian invasion of Ukraine. And he has argued that Spanish inflation is no exception. "Otherwise, why are there eight countries in the European Union with higher inflation?" he asked. "Seventy-five percent of developed economies are being affected by inflation," he has summarised.