First Vice President and Economy Minister Nadia Calvinho closed the second conference on European Recovery Funds organized by elDiario.es with a speech in which she lamented that inflation remained at 8.3% in April. compared to the same month last year, although this figure is one tenth lower than expected and will be confirmed this Friday by the National Institute of Statistics (INE).
At the moment, prices peak at 9.8% in March. And, in fact, the vice president has put the cap on the price of gas almost on par in terms of transforming the economy, which will drastically lower the price of electricity and general inflation, with labor reform to overcome 20 million social security branches for the first time.
Shortly before, the director of elDiario.es, Ignacio Escolar, presented Calvinho’s speech with a summary of the extensive debate on European foundations that took place at the Reina Sofia Museum in Madrid. “A few months ago, the vice president handed over to me the responsibility of managing so much money to transform the Spanish economy,” she recalls.
The Minister of Economy referred to this responsibility and commitment to the Recovery Plan, which should serve as an answer to the question “what kind of future do we want for our country.”
Looking to that future, Calvinho believed that “the gas cap is as transformative as labor reform.” A cap on electricity price cuts and an “unsustainable” acceleration in headline inflation that “started with the abolition of the sun tax at the start of the legislature to encourage renewable energy penetration.”
At the opening of the event, President Pedro Sánchez confirmed that the electricity bill reduction mechanism would be approved at the Extraordinary Council of Ministers this Friday, and pushed forward the approval of PERTE (Performed Economic Recovery and Transformation Strategic Projects) for the economy and microchips.
At 48.8 euros for one year
If the gas ceiling is exceeded, in the so-called Iberian exemption, the average price will be 48.8 euros per megawatt-hour (MWh) throughout the year, slightly below the declared 50 euros/MWh.
Regarding the expected cap on gas, “the mechanism will operate for one year, guaranteeing an average price during this period of 48.8 euros, which will also mean important protection against future increases in world energy prices in a scenario of huge geopolitical instability”, explained Sanchez, who warned that the current energy context, marked by the war in Ukraine, “will last for a long time.”
Regarding the recovery of the economy after the pandemic, Nadia Calvinho explained that the investments promoted by European funds are of fundamental importance, along with the recovery of the labor market, despite the slowdown caused by the shock of the war in Ukraine.
“An investment growth forecast of 9% overall and an estimate of more than 10% investment in capital goods and intellectual property is an accelerator of recovery based on the Recovery Plan,” he elaborated.
Although, as he assured, the government is not losing its medium and long-term vision, “assuming sustainable growth”, both financially and environmentally, which this week AIRef called into question on the one hand, and the Bank of Spain on the other.
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