Theresa Ribera, the third vice president and minister for ecological transition, reported the president’s Thursday announcement that the VAT on electricity would drop to 5 percent. She cautioned that a temporary tax cut, while helpful, does not resolve the core problem of persistently high electricity prices. The plan presented by Alberto Núñez Feijóo weeks earlier was criticized as cosmetic by the former vice president. For a consumer using roughly 60 euros each month, the reduction translates to about 2.7 euros in savings. The vice president emphasized at a New Economic Forum breakfast that fiscal measures can ease strain in the short term but cannot substitute for deep, structural changes that address the economy’s fundamentals (source attribution).
Ribera stressed that tax cuts alone will not be the solution, yet she acknowledged the need to reassess measures in light of changing circumstances. It is not feasible to aim solely for reduced revenue and budget transfers, she explained. Such an approach would have only short-term effects and would limit the state’s capacity to address serious situations requiring timely responses. The broader critique from right-leaning parties that their proposals focus on shifting the burden from consumers to taxpayers was noted; Ribera argued that this approach fails to transform the underlying economic model (source attribution).
The cabinet plans an extraordinary session on Saturday to approve the VAT reduction, the measure reaching the minimum level permitted by Europe due to the Ukraine war. The meeting will also green-light a second anti-crisis package aimed at protecting the most vulnerable consumers. Among the targeted measures are programs to strengthen electricity social bonds and a bill discount for low-income households under regulated PVPC contracts. The discount, typically between 25 and 40 percent, has already been raised from 60 percent to 70 percent and will stay in place until June 30. These actions are designed to be implemented quickly and efficiently (source attribution).
In a separate assessment, Spain’s energy landscape has intensified concerns about price volatility. The vice president noted that high prices are likely to persist into the medium and long term and called for measures that extend beyond immediate relief. She also referenced discussions about a potential new tax on energy companies, noting that Spain has already reduced the extra benefits energy firms receive from rising gas prices. This reduction is meant to help recalibrate rates and ensure that contracts linked to fixed prices under the Iberian mechanism do not unduly cushion profits while prices rise. Specific figures on collected revenue were not disclosed (source attribution).
Ribera cautioned that some figures presented by electricity, gas, and oil companies were too burdensome to digest and stressed the need for careful analysis to avoid creating further price shocks for consumers. She indicated that any new tax design must avoid hindering investment in the sector. While it remained unclear whether the proposed energy-sector tax would be included in the Saturday measures, the discussion continues as part of a broader evaluation of how best to balance market dynamics with consumer protection (source attribution).
Ultimately, the vice president underscored that a sector as essential as electricity cannot be treated as a fragile market where consumers are left to bear the risks alone. The aim is to foster greater confidence in the core service providers while pursuing structural improvements that enhance reliability, affordability, and fairness for all households (source attribution).