200€ check , VAT rebate on some foodstuffs, end to fuel discounts… the anti-crisis measures

The President of the Government, Pedro Sánchez, preparing for the election year 2023 and under the propaganda slogan “Complying”, has detailed the new features of the royal decree law approved this Tuesday by the Council of Ministers to tackle the energy crisis and the high inflation caused by the Russian invasion of Ukraine, with a special focus on the cost of foodstuffs.

Main novelties:

• Elimination of VAT on staple foods (bread, bread flour, milk, cheese, eggs, fruit, vegetables, pulses, potatoes, cereals). It goes from 4 % to 0 %. Basic foodstuffs such as meat and fish are excluded.
• VAT cut from 10% to 5% for oils and pasta.
• 200 euros for 4.2 million families with an annual income of up to 27,000 euros.
• During the next six months, the conditions of contracts are extended for their renewal to avoid abusive increases.
• 300 million in direct aid to farmers to compensate for the increase in costs due to higher fertiliser prices.
• Support for the gas-intensive industry with a new ICO liquidity line of 500 million euros and 450 million euros in aid for the ceramics sector and other subsectors, in addition to 3.1 billion euros in public investment through the new industrial decarbonisation programme.

Measures that remain unchanged as of 31 December:

• Free Renfe commuter, rolling stock and medium-distance travel cards during 2023.
• 30% reduction in urban and interurban public transport in areas where the regional and municipal governments complement it up to 50%.
• A six-month extension of the tax rebate on electricity and gas, from which butane and propane continue to be excluded.
• Freezing of the maximum price of the butane cylinder only for the 12.5 kg cylinder marketed by very few operators, such as Repsol. The rest of the formats are free tariffs.
• Extension until 31 December of the 2% limit on the annual rent update.
• Six-month extension of the suspension of evictions and evictions for vulnerable households.
• Ban throughout 2023 on cutting off essential supplies and extension of the social voucher.
• The 15% increase in the minimum living income and non-contributory pensions is maintained.
• The relief contract and partial retirement are extended until 2024 to boost generational replacement and job creation, especially in industry.
• ERTEs linked to the situation of temporary force majeure of companies and workers affected by the volcanic eruption on the island of La Palma are extended.
• The prohibition on dismissals in companies under the aid programme due to the increase in energy costs resulting from the war in Ukraine is maintained.

Measures amended as of 31 December:

• Extension of the discount of 20 cents per litre only for professional road transport, to be paid at the end of each month.
• For farmers, direct aid of up to 20 cents per litre, through the reimbursement of the special tax on hydrocarbons, at a cost of 240 million euros.
• Direct aid for fishermen valued at 120 million euros.

The Council of Ministers has also approved the revaluation of pensions by 8.5% in 2023, in line with the increase in inflation, guaranteeing the purchasing power of pensioners.

The green light has also been given to improved active retirement, which will allow primary care health professionals, family doctors and paediatricians of retirement age to continue for the next 3 years to combine 75% of their pension with full-time or part-time active service.