The Spanish government has approved a €5 billion emergency package to shield the economy from the impact of the war in Iran, according to reports from Euronews and Realtid. Prime Minister Pedro Sánchez announced the measures after an emergency cabinet meeting in Madrid on Friday.
The package, which reportedly contains 80 measures set to take effect on Saturday, includes significant tax cuts on energy. VAT on electricity and fuel will be reduced from 21% to 10%, alongside cuts in excise duties on hydrocarbons. The measures are designed to support approximately 20 million households and 3 million companies.
the war will cost Spaniards €5 billion
Sánchez stated that "the war will cost Spaniards €5 billion" and indicated that additional resources could be deployed if necessary. The prime minister expressed frustration with the situation, reportedly saying he was "very angry" about the circumstances during a press conference in Madrid.
The package also includes measures to save up to €200 million for energy-intensive industries and will temporarily suspend the tax on electricity production value to reduce system costs. While the measures aim to mitigate the energy shock and contain inflation impact, the government acknowledged they will not fully offset the conflict's effects.
very angry
Spain, a major importer of liquefied natural gas, is reportedly exploring options to increase gas imports from Algeria via pipeline to reduce vulnerability. Sánchez assessed that the current crisis is not expected to be as severe as the 2022 energy shock following Russia's invasion of Ukraine, citing Spain's expanded renewable energy capacity.