Salvador Illa announced on Monday an initial aid package to address the effects of the war in the Middle East on the Catalan economy. Specifically, on Tuesday the Catalan government will approve the mobilization of €400 million in direct aid, tax breaks, and financing instruments to protect the country's businesses and families. The aid will focus particularly on transportation, agriculture, and fishing, the sectors most affected by the war, and the package is expected to be expanded depending on how the conflict evolves. This set of measures is in addition to... the protections deployed last week by the Spanish governmentThe aid that the Government plans to allocate to the economic sector, which will amount to up to 216 million euros, will be conditional on companies wishing to participate preserving jobs. The main pillars of the aid are an expansion of two financing lines between the Department of Economy and Finance and the Catalan Finance Institute (ICF), direct aid to the agricultural and fishing sectors, and tax exemptions. Business advisory and promotional services are also planned. The plan announced by Salvador Illa includes allocating 154 million euros to accelerate the energy transition and sustainable mobility. Regarding social aid, as the president explained at a business conference organized by ExpansionThe measures will be aimed at ensuring that the most vulnerable families can cope with food and energy expenses. To this end, the Catalan government will mobilize up to €30 million to create an open line of aid for families and to offer support to municipalities by reinforcing emergency social assistance, for example. Coordination of temporary layoff schemes (ERTEs) due to force majeure with the Spanish administration is also planned to protect job stability. "I make an explicit appeal for everyone to act in the general interest and the common good," said Illa, who demanded "responsibility" from large companies and the financial system.

The war in the Middle East dominated a question time session in the Spanish Congress, with all eyes on Friday, when Spanish Prime Minister Pedro Sánchez will have to detail the measures to mitigate the economic effects of the conflict. This emergency plan is currently the Spanish government's top priority, to the point that it has put on hold the possibility of presenting this year's budget during the first quarter, as the Treasury had previously promised. In a press conference after meeting with the President of Ukraine, Volodymyr Zelensky, Sánchez has left the presentation of the budget this month up in the air due to "the gravity of the international situation." In fact, he has considered it one of the "worst crises" of his term. Currently, Sánchez lacks the necessary support to pass a budget and is governing with the budget extended from 2023. To fulfill his previous commitment, the budget would have to be presented next week—when Sánchez appears to explain his position on the Iran war—or during Holy Week. Afterward, it is highly likely that the Minister of Finance, María Jesús Montero, will leave the government to run in the Andalusian elections, which Juanma Moreno Bonilla must call (May 31 or June 21 are being discussed, as the Pope is visiting Spain the week of June 6-12).

Another defeat for the Spanish government in Congress. The lower house approved a 2.7% increase in pensions this year (only Vox voted against it), but rejected, for the second time, the social safety net decree and the decree promoted by the Minister of Social Rights, Pablo Bustinduy, which would have allowed the Spanish government to limit the prices of goods. Both measures were defeated by the votes of the PP, Vox, and Junts. "Be clear that people will take note [of your decision] and they have long memories," said Bustinduy.