Council of Ministers

The Government of Spain adopts urgent measures to alleviate the effect of the drought on the primary sector

Council of Ministers - 15.3.2022

Moncloa Palace, Madrid

The Council of Ministers has approved a Royal Decree-Law on urgent measures to support the agricultural sector due to the drought. Spain's reservoirs are currently at 44.1% of their total capacity, the lowest level since 1995.

The Minister for Agriculture, Fisheries and Food, Luis Planas, explained that rainfall in the last hydrological year, which runs from 1 October to 1 March, has fallen by 40% compared to the historical series, and has decreased by up to 60% in the Guadalquivir and Guadiana basins. Although storm Celia brought rain this week, Planas acknowledged that "it cannot correct this situation of structural deficit, which affects both dry land and, in particular, irrigation due to the reduction in irrigation allocations".

The aim of the Royal Decree-Law is, said the minister, "to contribute to recovering the profitability of agricultural and livestock farms" and "to strengthen a sector that is at the forefront of providing us with sufficient quality and quantity food for all citizens every day of the year".

Fiscal, labour, financial and hydrological measures

Foto: Pool Moncloa/Borja Puig de la BellacasaThe approved measures fall under the responsibility of six ministerial departments and affect fiscal, labour, financial and hydrological areas, with an estimated impact of 450 million euros.

Among the measures of a social nature, Planas listed the deferral of the payment of Social Security contributions, the reduction in the number of labourers from 35 to 20 for the purposes of receiving the agricultural subsidy in Andalusia and Extremadura, and the possibility of temporary workers in the countryside being able to acquire the status of permanent-discontinuous workers.

In fiscal matters, the net yield is reduced by 20% in the singular objective estimation of the agricultural and livestock regime, known as the module system, and those farms that have suffered a decrease of more than 30% in agricultural or livestock yields are exempted from rural VAT.

To guarantee liquidity in the sector, a line of aid is created, under a direct concession regime, to subsidise the principal of financing operations formalised through financial institutions, for which a budget of 10 million euros is provided, which will be able to mobilise more than 100 million euros in the sector. In addition, there will be a guarantee financing line of 2.17 million euros from the Sociedad Anónima Estatal de Caución Agraria (SAECA) and the 43rd Combined Agrarian Insurance Plan will be increased with an extraordinary allocation of 11 million euros.

A fourth package of measures relates to the Common Agricultural Policy (CAP). Spain will request, among other things, an increase in the CAP advance payment for 2022 in October and also the possibility of making the application conditions more flexible. On the 21st, Luis Planas will attend the European Union's Agriculture Council, where he will present this issue.

Finally, in the area of competence of the Ministry of Ecological Transition and Demographic Challenge, "in order to seek a balance between the use and protection of existing bodies of water" and to compensate for energy costs, affordable tariffs are set for desalinated water and water from the Júcar-Vinalopó. In the Guadalquivir and Guadiana basins, in addition, the regulation canon and water use tariffs will be reduced and emergency works worth 9.65 million euros will be carried out.

Strategic project for the shipbuilding industry

Foto: Pool Moncloa/Borja Puig de la BellacasaThe Government has approved the Strategic Project for Naval Recovery and Economic Transformation (PERTE), which aims to mobilise a total investment of 1.46 billion euros and contribute to the creation of around 3,100 quality jobs.

The Minister for Industry, Trade and Tourism, Reyes Maroto, explained that the project is based on public-private partnership and will allow the transformation of the naval industry's value chain through its diversification towards marine renewable energies, the development of low-emission ships, its digitalisation, the improvement of its environmental sustainability, as well as the training of its workers.

Maroto has maintained that the project responds to the Government's commitment to promoting a driving industry for our economy, which will also contribute to Spain's industrial autonomy.

The Naval PERTE will promote the collaboration of the different industrial actors, contribute to the modernisation of the sector and increase its competitiveness by around 15%, with an annual growth rate in the naval industry of 9%, according to the minister: "We estimate that the PERTE could create around 3,100 quality jobs mainly in peripheral regions and thus contribute to one of our priorities in the recovery plan; the demographic challenge policy.

Reyes Maroto recalled that the naval industry generates 70,000 highly qualified jobs and 7.5 billion euros of annual turnover in Spain and enjoys recognition in international markets. More than 20 shipyards have the capacity to build high-volume vessels, and our country was the second largest shipbuilder in the European Union and the ninth largest in the world in 2021.

Improving energy efficiency

The Council of Ministers has agreed on the distribution of 170 million euros among Regional Governments Cities to improve energy efficiency and the circular economy in companies in the tourism sector.

The Minister for Industry, Trade and Tourism has stated that the funds come from the NextGenerationEU programme and will contribute to reducing energy costs and the carbon footprint.

The Government expects that this 170 million euros will be able to finance more than 2,600 actions in the accommodation sector, helping to improve efficiency and reduce consumption in the face of soaring electricity prices.

The minister said that this investment is in addition to the 570 million euro fund for improving tourism competitiveness, which will finance actions to improve energy and lighting in tourist establishments, and to develop the circular economy.

Complaint to the International Criminal Court on the situation in Ukraine

Foto: Pool Moncloa/Borja Puig de la BellacasaThe government has agreed to ask the prosecutor of the International Criminal Court to investigate whether crimes have been committed in Ukraine that are within its competence.

The Minister for Territorial Policy and Government Spokesperson, Isabel Rodríguez, stressed that Spain is one of 38 countries to join this action following "the escalation of atrocities committed during the invasion and in solidarity with the Ukrainian people".

Spain considers that Russian President Vladimir Putin "will have to be held accountable before the International Criminal Court and that alleged war crimes, crimes against humanity or genocide that could have been committed against the Ukrainian people should be investigated", the spokesperson added.

Rodríguez also stressed that The Crown Prosecutor of the State has launched the appropriate investigations to analyse these consequences within the scope of Spanish law.

Current Affairs

During her appearance at the press conference following the Council of Ministers, the spokesperson reported on the actions being taken by the Government in relation to Russia's invasion of Ukraine. These initiatives were announced by the President of the Government of Spain Pedro Sánchez in the Lower House of Parliament on 2 March.

Since then, the President of the European Commission, Ursula von der Leyen, has visited Spain to address the energy issue. The Executive has met with social and economic agents to achieve unity in the social sphere, as well as with the Spanish Federation of Municipalities and Provinces. In addition, a Conference of Presidents was held last weekend.

Isabel Rodríguez said that "unity of action in response to Putin's war: unity in Spain, unity in the European context and in the NATO sphere".

The spokesperson also announced that the national plan to respond to the economic and social impact of the invasion of Ukraine and the consequences of the war will be finalised on 29 March at the Council of Ministers.

Energy prices

Foto: Pool Moncloa/Borja Puig de la BellacasaThe minister and spokesperson recalled that in recent months the head of the Executive has called for decoupling electricity and gas prices, centralised purchases in wholesale markets, accelerating the strategy on renewables as much as possible, and encouraging gas interconnections in Spain to provide security and autonomy to the European Union.

These will be the proposals to be presented by Spain at the European Council meeting to be held in Brussels on 24 and 25 March.

These decisions, Isabel Rodríguez stressed, were endorsed at the meeting of presidents held in La Palma: "Feeling that we are accompanied by all the regional presidents makes Spain stronger".

On the other hand, the spokesperson confirmed that work will begin tomorrow with all the parliamentary groups to reach a consensus on a response to the economic consequences of the war, to protect the most vulnerable groups and to make an "equitable distribution" of the costs that the war situation is causing in the European context and in Spain. "We will do everything in our power, we will use all the tools of the state to fight Putin's war, so that it is not paid for by families and businesses," she said.

"The Government continues with a well-defined roadmap where speeding up investments that consolidate our strategic autonomy in the field of industry remains a priority," she concluded.

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