The Government’s plan for Ukraine will cost 16,000 million: gasoline subsidy, prohibition of dismissal, rent ceiling…

The Government has proposed a five-axis shock plan for the next three months with which it seeks to cushion the effects of the war in Ukraine on the economic recovery of Spain and on the well-being of citizens, in the midst of rising inflation. Among the measures, the Executive will discount gasoline with 20 cents per liter not only to carriers but also to individuals, it will “avoid” layoffs or cap rent increases at 2%.

The President of the Government, Pedro Sánchez, advanced this Monday at the Europa Press and McKinsey & Company ‘Generation of Opportunities’ forum the measures that will include the shock plan in response to the economic and social impact of the war in Ukraine that he will approve tomorrow the Council of Ministers.

In total, there will be 16,000 million for the next three months, until June 30, of which 6,000 will be distributed in the form of direct aid and tax reductions and 10,000 through ICO credits.

The Government “knows” the problems of the affected sectors and will fairly distribute the “sacrifices” required by a war that comes “in full economic recovery”, Sánchez said during the speech in which he outlined the five-year plan axes, which includes measures for families and workers, for the business and economic fabric, for transport, cybersecurity measures, and energy.

Of the 0.20 euros per liter that will be discounted in the refueling of gasoline, 0.15 euros will be subsidized by the State and the remaining 0.05 by the oil companies.

Dismissals for reasons related to war are prohibited

“Layoffs will also be avoided,” Sánchez indicated, to urge companies to resort to internal flexibility measures, such as temporary employment regulation files (Erte), “which worked so well during the pandemic.”

Last week it transpired that the Ministry of Labor was considering re-prohibiting objective dismissal, a rule that had already been applied during the pandemic. In statements to journalists, the Second Vice President and Minister of Labor, Yolanda Díaz, confirmed that dismissals for reasons related to the war in Ukraine will be prohibited: “We don’t have to fire anyone”he has said and has urged companies to go to the Erte, which have a clause for maintaining employment as they remind this medium from the Ministry.

In the event of dismissal by companies that have resorted to this mechanism, they will have to repay public aid perceived.

In the midst of the debate on again prohibiting objective dismissals, the first vice president, Nadia Calviño, recalled on Friday in statements to The sixth that “we must avoid a state of mind that is not that of the pandemic”, distancing himself from Díaz’s forcefulness.

The IMV rises, rent increases are limited…

In terms of housing, the Government will cap the review of rental contracts at 2% Until June 30th. During the configuration of the plan, Díaz asked to freeze rental prices in the face of escalating inflation to prevent the consequent rise in rents according to the CPI (in February, at 7.6%) in contracts that have revision, so the measure satisfies one of the requests of United We Can.

Outside of employment, the social measures also include a 15% increase in the minimum vital income (IMV) in the next three months and 600,000 more families will be added to the social bonus and will already accommodate 1.9 million homes.

will also be expanded fiscal measures in light already implemented and that reduce VAT to 10%. United We Can fought for an energy check of 300 euros to help pay the electricity bill for families with incomes below 70,000 euros gross per year that has not come out ahead in itself although the co-spokespersons of the purple formation, Isa Serra and Pablo Fernández, have recognized that the improvement of the IMV implies de facto deploying that idea in the most vulnerable families because it will result in increases of between 240 and 420 euros.

Aid for agriculture and fishing

As for companies, they will be able to access the new ICO lines for 10,000 million. At this point, the Government has included aid for agriculture and livestock (362 million) and for fishing and aquaculture (68 million).

The Government will also increase the volume of resources for offset tolls by 80% and to reach the maximum in CO2 compensation, Sánchez has advanced.

The plan also includes the extension of the maturity period of the loans guaranteed by the ICO and the grace period for the most affected sectors.

Transport aid: from 1,250 euros per truck to 300 per light vehicle

The transport sector will receive an injection of more than 1,000 million euros between the bonus of 20 cents per liter refueled and 450 million in direct aid “to cover liquidity needs caused by the temporary increase in energy and fuel”.

At this point, Sánchez has advanced the specific aid, which will be 1,250 euros per truck, 900 euros per bus or 300 euros per light vehicle (taxis, ambulances…).

In addition, the refund of the hydrocarbon tax will be shortened from three months to one.

The “Iberian exception”: a reference price for gas will be set

What the Government will not be able to apply at the moment are the measures to lower energy prices to which the European Council gave the green light on Friday due to the singularity of the cases of Spain and Portugal.

On this issue, Sánchez has announced that this week Spain and Portugal will present to Brussels an “exceptional and temporary” measure to set a reference price for gas, although he has not specified the amount. This, he has indicated, “does not mean subsidizing gasdoes not break the incentives for renewables or electricity flows between countries” and will allow Spain and Portugal to “significantly lower electricity prices immediately” without “distorting” the electricity market in Europe.

The plan will also update the remuneration system for renewables, cogeneration and waste (Recore), which will mean a reduction in system charges of 1,800 million, and will extend until June 30 the mechanism for reduce “excess profits” in the electricity market.

For the “Iberian exception” to become a reality, we will have to wait “three or four weeks,” said the third vice president and minister for the Ecological Transition and Demographic Challenge, Teresa Ribera, last week.

Lastly, the cybersecurity plan On a national scale, it will have a budget of 1,000 million euros and will include “more than 150 essential actions”. In addition, a cybersecurity operations center will be set up and the security of the new 5G electronic communications networks will be strengthened in “essential services” such as transportation, energy or medicine.