The Council of Ministers approves the extension of the decree law until December 31, with the drop from 10% to 5% of VAT on electricity and the bonus of 20 cents per liter of fuel
Just five days before the Government’s anti-crisis measures plan to alleviate the effects of the war in Ukraine ends, the Council of Ministers met this Saturday in an extraordinary manner to approve the extension, which in this case will not be only three months, but will extend until December 31, as confirmed this Friday by President Pedro Sánchez.
Six more months and new measures to try to inject an oxygen balloon into family economies that are beginning to be seriously impacted by this endless escalation in inflation, which can no longer be considered circumstantial and which seems to last at least until the end of the year . To protect households, industry and companies from this rise in prices, the Executive, in addition to maintaining measures such as the discount of 20 cents per liter of fuel, the cap on rent or the prohibition of objective dismissals, incorporates new measures such as a 200 euro check for the unemployed and self-employed who are suffering the most from high inflation, aid for public transport passes, a new reduction in VAT on electricity from 10% to 5% or the limit on the maximum price of the butane cylinder , among other.
During his appearance, Sánchez assured that these initiatives are managing to contain the rise in prices by 3.5 points, that is, if this plan had not been implemented, the Executive’s calculations are that the CPI would be 3.5 points higher than current, with rates close to 14% or 15%.
This extension of the decree will have a budgetary cost of more than 9,000 million euros. The president explained that of them, 5,500 million are actually spending to apply the measures that protect families, the working class and the most affected sectors, and another 3,600 million are reduced income due to tax cuts. Together with the first decree, the total expenditure for the State will have been in 2022 of about 15,000 million euros, more than 1% of the GDP of Spain.
The measures approved by the Council of Ministers are the following:
Discount up to 50%
Public transport
One of the measures that were in the air was the reduction of public transport. Finally, the Council of Ministers has approved a 50% reduction in the price of all monthly passes with state ownership (such as Renfe), in addition to a 30% reduction in passes that depend on the autonomous communities and municipalities (buses and metro ), which they may also expand with their own resources up to 50%. The measure will apply from September 1 to December 31.
Sánche gave the example that the monthly Cercanías pass will go from costing 29 euros per month to 14.5 euros.
200 euros of direct aid
Check to unemployed and self-employed
The Government has also approved a direct aid of 200 euros -100 euros less than what United We Can propose- for low-income self-employed and unemployed workers, an aid that can be requested during the month of July.
Although the president has not wanted to specify who this direct aid will be intended for and invited them to wait for the details to be published in the BOE, Vice President Yolanda Díaz explained on her Twitter account that it will be a check for families with incomes of less than 14,000 euros a year -that is, households that earn less than the minimum interprofessional salary- “which will help alleviate their situation”. Díaz did not limit it to the unemployed or self-employed, as Sánchez did.
From 10% to 5%
VAT rebate on electricity
Another measure announced by Sánchez last Wednesday in Congress is a new reduction in VAT on electricity, from the current 10% to 5%, which will mean a cut of about five euros in an average bill of 100 euros. The Executive estimates that this cut means a reduction in income of about 220 million euros each quarter.
It should be remembered that a year ago, when the price of electricity began to rise and stood at 85.73 euros per MWh, the Executive already lowered this VAT from 21 to 10%. Currently, and despite the measures that have been implemented, such as the gas price cap, the price per MWh exceeds 200 euros.
price cap
butane cylinder
In addition, the maximum price of the butane cylinder is limited, which will be in force until December 31 and “will contribute to the well-being of the most vulnerable,” explained the president during his appearance.
“We are freezing the price of the butane cylinder again as we did during the coronavirus crisis,” the second vice president said on social media, indicating that this decision will mean “important support in many houses in our country so that they can cook or open hot water does not involve an even greater expense ».
20 cents/liter
fuels
In the field of fuels, the reduction of 20 cents in the liter of fuel is also maintained until the end of the year.
Today gasoline is sold on average at 2.13 euros per liter and diesel at 2.10. A price increase that has left practically without effect the subsidy of 20 cents per liter that the Government applied since April 1 to all drivers. Carriers asked this week to increase this bonus to 40 cents per liter for their sector, but their claims have not had an effect at this time.
Go up 15%
Minimum Living Income
The 15% increase in the amount of the Minimum Vital Income is maintained, which benefits nearly 1.2 million people, the most vulnerable.
15% rise
Non-contributory pensions
The new decree also includes a 15% increase in the nearly half a million non-contributory retirement and disability pensions, which will mean an average of about 60 euros more per month, according to Sánchez.
Delay installments
Agricultural sector and transport
The delay in the payment of Social Security contributions for the agricultural sector and transport is also extended until the end of the year.
Likewise, the limit on the rise in rents that have to be reviewed according to the CPI at 2% is maintained.
All companies that receive aid from the Government are prohibited from making an objective dismissal derived from the energy rise.
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