Spain announces $2.9 billion in new subsidies for households battling energy inflation

Spanish Socialist Prime Minister Pedro Sánchez on Thursday announced a $2.9 billion package in new subsidies to help people weather high gas and electricity prices exacerbated by Russia’s invasion of Ukraine.

The measures include set gas price rates for collective residential heating systems until the end of 2023 and more electricity and heating subsidies for low income households.

Announcing the measures in parliament, Sánchez said they would benefit 40% of households.

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Sánchez said the Spanish government can’t totally avoid the war or its economic consequences, “but we can cushion to the best of our ability the economic impact of (Russian President Vladimir) Putin’s war on the social majority of the country and the most vulnerable groups.”

The measures will be approved at a Cabinet meeting next Tuesday.

Spain recently approved windfall taxes on large energy companies and banks and has temporarily slashed the sales tax on natural gas from 21% to 5%.

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In its budget for 2023, the left-of-center coalition government plans to increase taxes for high income earners and set a temporary wealth tax, all of which it hopes will bring in 3.1 billion euros that will be used to finance initiatives to help people with lower incomes.