Oviedo (Times Of Ocean)- The Spanish cabinet has approved a €16 billion ($17.8 billion) economic package to mitigate the impact of the Russian war in Ukraine and tame soaring inflation.
“The unjustified attack has brought a war to Europe’s doorstep and it is already having economic and social effects – the flow of refugees, spikes in energy and commodity prices, and the disruption of supply chains,” said Economy Minister Nadia Calvino.
Spain is experiencing a crippling transport strike as a result of the soaring fuel prices, which has been going on for three weeks now without gaining any participants.
Gas prices and delivery issues had also caused the fishing sector to halt activity. Meanwhile, production halted at several major factories.
A key pillar of the government’s package is to cut the price of gasoline and diesel for everyone by at least €0.20 per liter (roughly $0.80 per gallon).
The measure will take effect on April 1 and remain in effect at least through June 30.
Companies affected will also receive hundreds of millions in direct aid and a new €10 billion line of credit to cover liquidity needs. However, any company receiving government assistance is prohibited from firing employees due to the high cost of energy.
Spanish authorities will also introduce a temporary limit on rent increases for the first time ever. Most landlords will not be able to raise rents more than 2% for the next three months.
To help the most vulnerable members of society cope with inflation that has hit 30-year highs, welfare payments will be expanded to 600,000 people and increased by 15%.
Boosting energy security and reducing price volatility are two other key pillars of Spain’s latest recovery plan. As a result, the government announced it would accelerate investments in green energy and energy efficiency, as well as change certain regulations for green energy producers.
The European Commission also gave Spain and Portugal the go-ahead to cap electricity prices during last week’s meeting. Portugal is still in the process of swearing in a new government, so the price cap has not yet been announced.