The cap on the price of gas to lower the cost of electricity in Spain and Portugal is going to be delayed more than expected. The President of the Government, Pedro Sánchez, has assured that there is still no agreement on the Iberian proposal to limit below 50 euros per MWh, while he has added that it is a matter “which has its complexity”. In the press conference after the Summit of the Heads of State of the EU, in which the sixth package of sanctions against the Kremlin was approved, the leader of the Spanish Executive stressed that the team led by Ursula Von der Leyen is still studying the draft presented on May 6, which dilates even more in time the roadmap planned by Sánchez to face the ‘rate’ of electricity.
After the recognition of the Iberian Peninsula as an energy island in the European Council of the March 24 and 25, the Moncloa calendar It was contemplated that this measure would already be in force in May. However, the technical details regarding the Iberian exception first, and the delay in Brussels, which has only sent both countries a preliminary evaluation, mean that two months after announcing his star measure to address high electricity prices, electricity remains up in the air. The impatience to obtain a ‘yes’ from Brussels stems from the fact that time is running out to take the vote on this decree to Congress and they do not want to submit it to parliamentary scrutiny before having the placet of the EU.
After passing the filter of the Council of Ministers and its subsequent publication in the Bulletin State Official (BOE) in mid-May, Sánchez and Ribera have less than fifteen days to take the initiative to the lower house, where it is not clear if it will go ahead because it raises suspicions across the political spectrum. the idea passed reduce the electricity bill by up to 40%, although as time has passed this percentage has been reduced and they only expect the electricity bill to drop by only 15%, which is currently around 200 euros per MWh. The war has uncovered the Achilles heel of the Old Continent in the energy field, to which Sánchez has also emphasized strengthen interconnections with the rest of Europewith mention of the need to monitor the investments of EU aid to materialize this project.
The agreement on an embargo on imports of Russian oil that arrive by sea to the Old Continent supposes going beyond a higher rank, with more severe consequences in western economies than those imposed so far. Sánchez himself has recognized that it is an “important step” and although he has not specified that it will have immediate effects on the economy, he has indicated that the Ministry of Finance and the Executive’s economic team are already carrying out an analysis of the situation, with the intention of extending beyond June 30, the Royal Decree-law by which urgent measures were taken to respond to the economic and social consequences of the war in Ukraine. “There will be an answer before the end of its validity,” he stressed.
After insisting that if nothing was done in the face of Russia’s aggression and the cost would be higher if nothing was done in the face of Russia’s aggression, he took advantage of the occasion to boast of the measures implemented to date such as tax rebates to the price of electricity via taxes, specific aid to sectors such as transport, agriculture or livestock, the increase in the number of households that benefit from the electricity social bonus, or the 20 cent discount per liter of fuel. Regarding this last aid, the Tax Agency still has pending the distribution of 123 million to service stationswhich means that it has only resolved 72% of the total.
With all this, he has stuck out his chest to say that they were approved after agreement with the affected sectors and with a parliamentary majority. “The Government is the same one that launched all the measures to protect families, companies, the country, in a time as difficult as the pandemic and we are going to do the same, everything in our power, to protect our economy, companies, industry and families”, he added. For this reason he has shown his willingness to extend the aid measures. “Obviously, we open ourselves to can extend that royal decree law beyond that June 30,” he reiterated.
Along the same lines, Sánchez highlighted the inevitable impact of the invasion on all economies and recalled the forecasts made by the Bank of Spain in the face of a total embargo on energy products (gas and oil) and that would subtract between 0.8% and 1.4% from the national GDP, a figure that would increase to 1.8% during the first year in the event of a total commercial closure. “What is evident is that no economy is safe from the impact. We are already noticing it,” he stressed before recalling the runaway rise in energy prices or raw materials since last February 24.