The Central Government boasts of having moderated inflation and that, at the moment, it is one of the lowest in European countries, 3.2% in May and falling. However, food prices, despite having hit a ceiling and also started to slow down, remain at very high levels.
12% in May is a skyrocketing increase even though it represents the third consecutive month of moderation. And, precisely, it is these prices that force the Spanish Government to extend at the Council of Ministers this Tuesday both the reduction in VAT on basic foods and the reduction in transport.
“The reduction in VAT on basic foods and support for public transport are two measures that we will maintain”, said the first vice-president and Minister of the Economy, Nadia Calviño. Food prices “remain above what is reasonable”, declared Calviño to RNE, who recognized the balances they must carry out between what is recommended by both Brussels and the Bank of Spain, i.e. , put an end to generalized aid, and effectiveness in controlling inflation. In this sense, Calviño recalls how in January they abolished the 20 cents general discount per liter of gasoline, and it was only reserved for professionals in the sector, which in April was halved, 10 cents; and also as it was in January when the reduction in VAT on basic foods came into force. Something that will continue, with measures that will try to “adapt as automatically as possible to how the economy responds”.
On the other hand, Calviño rules out extending the VAT reduction to meat and fish, a recurring request of the PP, which the vice-president does not consider necessary and adds, in addition, that, in recent weeks, “one of the prices that has dropped it was the fish”.
In this way, although the vice-president did not specify, from her words it can be deduced that the elimination of VAT will be maintained for essential foods, such as bread, baking flour, milk, cheese, eggs, fruits, vegetables, legumes, potatoes and cereals; and the VAT reduction from 10% to 5% for oils and pasta.
On the other hand, the discount on public transport will also continue, although Calviño did not give details here either. It currently involves both the free local, commuter and medium-distance Renfe passes, as well as the financing of a 30% discount on urban and interurban public transport to regional and municipal governments, which have the option of supplementing it up to 50%
It was in May when the European Commission, in its recommendations by country, pointed out that the era of the free bar was coming to an end, and that from 2024 the gradual return to normality would begin. Brussels called for more attention to public spending and a gradual withdrawal of the measures adopted in the wake of the energy crisis. In addition, Brussels adds that, if aid is to be maintained, “it should be focused on vulnerable families and companies, be fiscally affordable and preserve incentives for energy savings”.
Calviño has expressed his agreement with this philosophy of more surgical interventions, but it remains to be seen how this translates into the Council of Ministers this Tuesday. It will take the form of a royal decree law that will have to be subsequently validated by the permanent delegation of Congress.
On the other hand, Calviño rejected the proposal of the second vice-president and leader of Sumar, Yolanda Díaz, to establish an extraordinary bond of 1,000 euros to help vulnerable families pay the mortgage in the face of the sharp rise in interest rates. He says that “it cannot be a solution to use public money” to give it to the banks, but that it is the financial institutions that must facilitate the relief measures. Calviño meets on Thursday with the bank employers to evaluate the codes of good practices.
