Government and autonomies agree on tax reductions to mitigate the impact of the war

  • Sánchez and the presidents agree on a unanimous statement of support for the position of the Executive in the EU and of tax cutsalthough without profiling

The monstrous war in Ukraine, the devastating consequences that are already emerging from a warlike conflict that will surely change the world, have forced the first far-reaching political pact in a long time. A change of climate that has also influenced the turn of the rudder in the PP and the replacement of Pablo Casado by a leader with a more composed profile, Alberto Núñez Feijóo. Government and autonomies, meeting this Sunday at the XXVI Conference of Presidents on the Canary Island of La Palma, light a unanimous agreement that supposes the closed defense of the position held by Pedro Sánchez before the European Union to review the energy market and that will imply also a tax cut that mitigates the impact of the conflict in Ukraine and whose route has yet to materialize. “We are going to help lend a shoulder”, summed up the head of the Xunta, acknowledging the “advances” of the summit. “Today Spain comes out stronger because we are more united,” the minister spokesperson, Isabel Rodríguez, glossed with satisfaction. An atmosphere of harmony to which the presence of the ‘president’, Pere Aragonès, contributed, and from which the head of the Madrid Executive, Isabel Díaz Ayuso, emphatically distanced herself -nothing unusual for her-, by overflowing the demands of her party colleagues and of their new leader.

Declaration of La Palma (XXVI Conference of Presidents, March 13, 2022)

Declaration of La Palma (XXVI Conference of Presidents)

The expression of the agreement of this XXVI Conference was the joint declaration, signed by all after six hours of debate in the Benahoarita Archaeological Museum of Los Llanos de Aridane, in La Palma. The text was developed during the day and consists of four points. One, the expression of support for the Government in its position before the next European Council, on March 24 and 25, to achieve a “reduction in energy prices”. Two, “promote the execution of European funds by all public administrations.” The document incorporates, as Sánchez wanted, the commitment to “leave aside partisan discrepancies.” That is to say, that the funds are not used against the Executive, as Casado did.

Third point, manage in a “coordinated” way the reception of Ukrainian refugees. The president announced at the beginning of the appointment that there will be 5,400 places available from the State and another 12,800 provided by communities and municipalities. The regional leaders asked for resources to deal with the reception of displaced persons and Sánchez conveyed the “tranquility” to them, Rodríguez said, that there will be the “necessary funds.” There will be three reception centers (Madrid, Barcelona and Alicante) and a possible fourth in Malaga.

It is also agreed to promote the execution of European funds and leave them aside from partisan struggles and coordinate the arrival of refugees

Fourth element: the national response plan, to cushion the effects of a war that, as Sánchez warned them, will be “long” and with the risk of becoming “chronic.” That includes the “intensification” of the measures already announced so far, such as “tax cuts” to mitigate the impact of energy prices “on the bills paid by families and businesses.” That point was, according to Feijóo, the hardest to start Sánchez, and the one that left the barons of the PP (also Aragonès) more dissatisfied. Sánchez stressed that the Executive will do “everything in its power” to help industries and families, and recalled that the tax cuts approved so far would mean a decrease of between 10,000 and 12,000 million euros if they were prolonged throughout the year.

Tour of Europe

The head of the Xunta and the Andalusian Juanma Moreno had led the demand for a reduction in taxes on electricity and hydrocarbons, reaching the super-reduced rate, 4%. The final text, however, does not go into detail. Rodríguez argued that the virtue of the plan is that it is “open and dynamic”, and now the Government wants to speak with the political groups, with the social agents, with the sectors involved and, again, with the communities through a sectoral conference that will be piloted this week by the vice presidents Nadia Calviño and Teresa Ribera and the economic ministers. In parallel, Sánchez will undertake an intense tour of Europe in the coming days to gain support for the European Council at the end of the month.

In other words, the president manages to buy time until he sees how the EU breathes and what it manages to scratch, but in the meantime unanimous institutional support in Spain can show off, which does not mean that, if the Twenty-seven do not send out positive signals, the Government acts one-sided way. The Balearic president, Francina Armengol, said it behind closed doors: if Brussels does not listen, if it does not attend to the need to remodel the wholesale electricity pricing system, “we must stop the rise to individuals and companies yes or yes”.

Feijóo recognizes the “utility” of the summit in La Palma, although he expected more. He does not disavow Ayuso, but he looks uncomfortable with his position

This Sunday’s was the first face-to-face conference that was attended by a ‘president’ of the Generalitat. Aragonès arrived around eleven in the morning, once the informal breakfast with the King had finished, and he did not stop emphasizing the “exceptionality” of his presence, motivated by the situation in Ukraine. The Republican leader left with a bittersweet feeling. Dissatisfied by the lack of specificity of the measures and relieved by the minimum achievement of having saved respect for the Catalan competence framework in the management of the crisis and the commitment that the funds for the reception will be transferred. The summit, for Aragonès, concluded better than the previous one, in December (and telematics), focused on covid. There was no aside with Sánchez, but there was with the Aragonese Javier Lambán to reduce the tension for the candidacy for the 2030 Winter Olympics.

“At this time it is essential to close ranks around the Spanish position in the EU and in NATO,” said Feijóo, who noted that the summit had been “useful” and sent a “message of hope” to the industries and families. But Ayuso abruptly left that conciliatory tone: she demanded to temporarily suspend (not lower) the taxes on energy and allocate the 20,000 million euros that the Government has reserved for equality policies between now and 2025 to “help the families to face rising prices”. Rodríguez demanded not to “frivolize” and recalled that the budget of the ministry led by Irene Montero does not reach 500 million euros, and that what the Council of Ministers approved last Tuesday was a transversal plan for effective equality that includes measures such as maternity and paternity leave, the perception per dependent child or the fight against the gender gap in pensions.

The Madrid president sought her own profile, confronted Sánchez directly and, incidentally, approached one of Vox’s favorite battle horses, gender policies. Feijóo did not want to disavow her before the media — “it is not right” to dedicate those resources to equality plans because the “priority” should be workers and households — but he seemed uncomfortable. For him another stage also begins, that of dealing with the baroness of her party who wants to continue attracting the spotlight, pampering her agenda and her image. Ayuso, several socialist leaders pointed out, he sought to “burst” Feijóo’s position. “There are those who play as a center forward and others in the middle of the field,” sources very close to the new popular leader excused the position of the Madrilenian.

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But for the head of the Xunta, the important thing was the agreement, no matter how much he expected “more” from the regional summit. At the end of the day, as they pointed out in their surroundings, “we are in a dizzying situation”. Ukraine is urgent, priority and serious.

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