Pedro Sánchez announces a 100-euro top-up grant and temporary taxes on banks and big energy companies

In his first speech, the Chief Executive stressed before the plenary session of the Lower House of Parliament that he is "fully aware" of the daily difficulties that the majority of citizens are suffering as a result of the escalation of prices, a consequence of the unfolding of the pandemic and the war in Ukraine that has made energy and basic foodstuffs, in particular, more expensive.

Inflation, he explained, is now the main challenge facing Spain and most of the world's economies. As for the outlook for the coming months, Sánchez pointed out that it will depend on how long the war goes on for, the performance of economies such as China's, the supply of gas from Russia to Europe, and the effectiveness of the measures adopted to avoid an inflationary spiral.

The president has called for not bowing to catastrophism because although the Spanish economy is going to grow less than expected, it is nonetheless creating quality employment, the most strategic sectors are already working almost at full capacity, European funds are having a real impact and the measures adopted, such as the cap on gas, will help to cool prices.

Sánchez has assured that the government will go "all out" to defend the social majority, the middle and working classes, so that the consequences of the war are distributed fairly and equitably and do not fall on the most vulnerable. At the same time, it will continue to modernise the country: "We are building the future, we are looking forward and we are not going to stop".

New measures in favour of the social majority

In addition to the measures initially contained in the National Response Plan to the consequences of the war in Ukraine, which were extended and expanded in the Royal Decree-Law whose validation in the Lower House of Parliament is to be voted on this week -fuel subsidies, limiting rent increases, discounts on electricity taxes that represent a total reduction of 80% of the bill, and the 200-euro subsidy for vulnerable people- the president announced a 100% subsidy for all multi-journey passes for public service trains on Cercanías, Rodalies and medium-distance trains operated by Renfe. To this effect, multi-journey passes will be free of charge from 1 September to 31 December. This initiative is in addition to the 30% reduction for the rest of urban and metropolitan transport passes, which can be supplemented by the regional governments up to 50% or 60%.

Second, a tax on large electricity, gas and oil companies will be introduced. Exceptional and temporary in nature, it will tax windfall profits made in 2022 and 2023. Annual revenue is estimated at 2 billion euros per year.

A tax on banks will also be approved on an exceptional and temporary basis. It will be applicable for two years, over the financial years 2022-2023, and it is estimated that it will raise around 1.5 billion euros per year.

The government will also continue to encourage the social partners to reach a pact on dividends and incomes to contain price rises and share the costs and benefits of the current crisis more fairly. In this regard, Sánchez thanked the representatives of civil society, social agents, collectives, NGOs and sectoral organisations for their willingness to reach agreements, which has made it possible to adopt measures and promote important legislation, including the labour reform.

Building the future

Pool Moncloa/Borja Puig de la Bellacasa

The president stressed that we must emerge from the crisis better than we entered it, with a more prosperous, sustainable and resilient economy and welfare state than before. The pillars of this transformation, he listed, are education, health, ecological transition and digitalisation.

These challenges are already being addressed through the Recovery, Transformation and Resilience Plan, Sánchez pointed out, "a real country plan of which we should be proud". Tomorrow it will be a year since its approval in the European Union and Spain is already the most advanced Member State in its implementation.

Other concrete measures announced by the president in his speech were the creation of a supplementary grant of 100 euros per month for all students aged over 16 years who already have a grant, with the aim of ensuring that no young person is forced to drop out from financial necessity. Nearly one million pupils will receive this supplement between September and December.

The School Code 4.0 programme will be launched to help pupils in kindergarten, primary and secondary education to develop their digital skills, computational thinking, programming and robotics.

The Executive will also create the State Public Health Centre to improve the management of health emergencies, present a new Common Agricultural Policy (CAP) and advance Spain's energy independence by promoting collective self-consumption in public buildings and access to electric vehicles.

A new basic state regulatory framework for fire prevention and firefighting personnel will also be established, in collaboration with all the administrations involved.

Defending democracy, co-governance and dialogue

Sánchez reiterated his commitment to Ukraine where, he said, not only the fate of the Ukrainian people but also that of Europe is at stake: "The future of our sovereignty and our rights, of our security and our democracy is in the balance. Precisely for this reason, the other European nations have a duty to fulfil".

In Spain, Sánchez has reviewed the legislation that has been promoted by the Executive to protect rights, now in parliamentary procedure, including the first Housing Law of the democracy; the reform of the Sexual and Reproductive Health and the Voluntary Interruption of Pregnancy Law; the Law guaranteeing the rights of LGTBI persons; and the Law of Democratic Memory.

Other imminent bills include those on whistleblower protection, official secrets, and the regulation of lobbying, and those against the trafficking and exploitation of human beings and racial discrimination.

The president also defended the validity of Title VIII of the Constitution, dedicated to territorial organisation, and defined co-governance between administrations as an unbeatable instrument for providing effective responses to citizens' problems.

Last, Sánchez thanked the legislative power for its support throughout the legislature in approving measures and reforms, calling for dialogue and reiterating his willingness to reach basic consensuses for the functioning of democracy, such as reforming article 49 of the Constitution and completing the renewal of constitutional bodies.

Response to parliamentary groups, this afternoon and tomorrow

This is the first State of the Nation Debate to be held since 2015. The plenary session continues this afternoon and tomorrow with speeches by the spokespersons of the parliamentary groups, from the largest to the smallest, to which the president will respond.

Once the debate is over, the groups will be able to table their motions for resolutions, which will be debated and voted on Thursday 14 July.

Non official translation