The Spanish government will approve extraordinary measures on Friday due to the war in Iran

MadridThe Spanish government will hold an extraordinary cabinet meeting on Friday to address the economic effects of the war in Iran and approve a package of measures. Sources at La Moncloa (the Prime Minister's official residence) explain that the response plan for the war in the Middle East will include both short-term and long-term solutions, as confirmed by the Third Vice President and Minister for Ecological Transition, Sara Aagesen. However, these will not initially be generalized measures like those implemented for fuel during the war in Ukraine, but rather will prioritize the most affected and also the "most vulnerable" economic sectors. On Monday, the Minister of Economy, Carlos Cuerpo, and the Minister of Agriculture, Luis Planas, met with representatives from the food industry, the fertilizer sector—key to the primary sector—and animal feed to discuss the necessary measures for this economic sector, one of the hardest hit by the US-Israeli war against Iran. which blocks the Strait of Hormuz in response. The measures will not only address the increase in fuel prices but also the disruption of fertilizer trade, which has a significant impact due to the conflict.

In a press conference before participating in the 18th Cesce 2026 Conference in Madrid, the Minister of Economy, Carlos Cuerpo, emphasized that the government is working as quickly as possible to define these measures "rigorously": "We want the broadest possible consensus," he said.

The parties put measures on the table

For now, the minister has ruled out approving a VAT reduction on food and will instead focus on fuel, where the most serious crisis is occurring due to the blockade of the Strait of Hormuz, through which 20% of the world's oil passes. However, a few days ago the Spanish government reduced the likelihood of implementing measures such as the fuel price subsidies that were applied across the board in 2022 to the entire population following the war in Ukraine (the 20-cent discount), and is now opting for tax measures or aid for fuel purchases for the freight transport and agri-food sectors. The PSOE spokesperson, Montse Mínguez, has not provided details and has simply stated that they will mobilize all resources to address the most "urgent" and "necessary" needs.

However, the decree law approved by the Spanish government must be agreed upon with Sumar's partners and also with its parliamentary partners, some of whom, like Podemos, are demanding direct intervention in market prices for housing and food, or the nationalization of Repsol. This Tuesday, Sumar's coordinator, Lara Hernández, demanded the automatic extension of half a million rental contracts that are due to expire in 2026, as well as the reinstatement of the suspension of evictions for vulnerable families, a measure already rejected twice by Congress with votes from the PP, Junts, and Vox. Esquerra agrees with Sumar in defending these measures and adds a reduction in income tax for low-income earners and an increase for high-income earners, as well as studying the creation of a special tax for energy companies and reinstating public transport subsidies by 2026. On the other side of the political spectrum, Junts has already presented its proposals to address the effects of the war in Iran, based on fiscal measures: a reduction of VAT to 5% for essential energy supplies; a general deflation of income tax to combat inflation; the government assuming the payment of rent for vulnerable families—so that landlords are not affected by the suspension of evictions; establishing 0% VAT for home purchases by those under 35; and eliminating the general application of the 7% tax on the value of electricity production to reduce bills. Meanwhile, the PNB is also calling for the reinstatement of the Iberian exception to limit gas prices, aid for supplies for the most vulnerable families, and fuel price subsidies for certain sectors; while EH Bildu is demanding the restoration of the social safety net, a cap on fuel prices, and a reintroduction of the energy tax. In fact, the Spanish government is taking its time to finalize the measures, convening an extraordinary cabinet meeting on Friday instead of approving the package of measures tomorrow, Tuesday, at the regular government meeting. The Moncloa Palace is aware that, whatever they approve, it will be difficult to reach a parliamentary consensus to pass the bill through the Congress of Deputies.