Spain Unveils $17.5bn Economic Plan To Ease Effect Of Russian-Ukraine Conflict

Spanish Prime Minister Pedro Sanchez has announced a 16-billion-euro ($17.5bn) economic plan that includes state aid and loans to help businesses and households weather the sharp rise in energy costs due to Russia’s war in Ukraine.

The plan provides for tax cuts worth 6 billion euros ($6.5bn) and a further 10 billion euros ($10.9bn) in aid from the state-owned development bank ICO, Sanchez told business leaders in Madrid on Monday.

The government aims to reduce the price of petrol and diesel fuel for all consumers by 20 euro cents per litre (74 cents per gallon). The state would contribute 15 euro cents per litre (55.5 cents per gallon) and the oil companies 5 euro cents (18.5 cents per gallon).

The measures would initially apply until June 30 and are set to be officially approved by the Cabinet on Tuesday.

Meanwhile, Spain and Portugal are looking to decouple the price of electricity from that of gas.

The two countries are due to present a plan to the European Commission this week on how much the reference price of natural gas – which is used to calculate the electricity price – should be reduced.