Faced with a run of bills that, in the wake of the clash in Ukraine, does not seem to end, the countries that are part of the European Union are running for cover to protect families, waiting for Brussels to promote ad hoc solutions, such as for example, the price cap, on which the EU executive could make a proposal before the Energy Affairs Council on 30 September. Holland, Spain and Germany each choose their own path: from the minimum wage to the VAT cut.
Netherlands: government will raise minimum wage by 10% against expensive living
King William Alexander of the Netherlands anticipated that the Dutch government will announce a 10% increase in the minimum wage to help workers cope with the cost of living. The measure is part of an 18 billion euro aid package put in place by the government to help families cope with rising inflation and energy prices that will be officially announced in the evening by the executive. The wage hike is the highest announced to date in Europe. Social benefits will also increase, including allowances for minor children. The Dutch government – added the King – will announce a limit on the price of energy “so that people can continue to pay their bills”. The measures will be partially financed by “a temporary additional contribution from the oil and gas companies”.
Spain, the CDM approves the reduction of VAT to 5%
For example, the Spanish Council of Ministers has approved a decree that establishes the reduction of VAT on gas from 21% to 5%. The measure, announced earlier this month by Prime Minister Pedro Sánchez, will come into force in October and will remain valid until 31 December. A similar measure had already been taken with regard to electricity. “We are maintaining our commitment to the social majority in this country by reducing taxes on electricity by up to 80% to help families and businesses cope with this energy crisis,” Sánchez commented on Twitter. The tax reduction will also apply to pellets, briquettes and firewood, intended for heating systems, whose prices have increased considerably as winter approaches (for a saving of 19.4 million of the 209 million total estimated savings).
Germany: Scholz, up to 3000 euros tax-free for workers
In Germany, the Bundesbank in its monthly report pointed out that “the signs of a recession in the German economy are increasing in the sense of a clear, lasting and far-reaching retreat of the economy”. The cooling of the economy is expected for the last quarter of 2022, and the first of 2023. According to Buba, high inflation and insecurity will not only affect “gas and electricity intensive industry and their business in exports and investments, but also private consumption and services that depend on it ». In mid-September, German Chancellor Olaf Scholz met with the social partners. “I have offered to exempt further payments of up to 3,000 euros from taxes and duties, if these can help workers overcome the crisis better,” explained Scholz after the meeting in Berlin. The Chancellor referred to the many citizens concerned about the sharp rise in prices “at the supermarket, at the petrol station and in heating costs” and to companies under increasing pressure. Scholz then added again that his government “will not leave anyone alone.” The consultation between the government and the social partners will continue with a new meeting in November.
Lisbon: more support against expensive rents
The initiatives are also promoted at the level of individual municipalities. The Lisbon one, in its anti-inflation support plan for citizens, will double the funds for the subsidy to those who live in rent. Mayor Carlos Moedas announced this during the inauguration of a school. A subsidy scheme of this type, in the Portuguese capital, already exists and aims to keep the cost of renting an individual or a family within 30% of the total income of the tenants, but always subsidizing no more than a third of the monthly rent. The recent high rents, motivated by inflation, but above all by the scarcity of apartments available on the market, makes these accounts increasingly difficult to make ends meet, as well as insufficient compared to the amount of families that would need them. Moedas, after announcing that it will not increase rents in municipal buildings, where about 21,000 families reside, hopes to be able to reach at least a thousand other recipients through the new support packages to be provided, but at the moment it does not reveal what the figure will be put in place. by the municipal executive headed by him, being at the head of a non-absolute center-right majority, which just a few days ago had been beaten by the left opposition on the suspension of new tourist leases in fifteen districts of the capital. A suspension that the left have decided to extend for another semester, considering that one of the main reasons for the high rents is the mass return of tourists to the big Portuguese cities after the pandemic crisis. Not surprisingly, the municipal anti-inflation plan is not yet ready because it is being drawn up by all the political forces present in the City Council. In his speech, Moedas also recalled the negative impact that the price of houses is having on the ability to attract certain professionals to the city such as policemen and professors, and university students themselves.