Minister Planas rules out price caps because “it makes no sense in the EU”, while Montero finds it “impracticable” to subsidize 14.4% of the shopping basket, as Podemos proposes
The VAT reduction on some foods has been able to “mute” the incessant rise in shopping basket prices, but it’s not enough. The data published by the INE yesterday confirmed what consumer associations had been warning for weeks: many foods continued to rise in price in January, so the Spanish shopping basket is unable to absorb the tax cut and help save on purchases.
Agriculture, Fisheries and Food Minister Luis Planas said the government’s measures “stopped the spiral of price increases”, but acknowledged the need to work with the whole food chain on more measures to ensure that food “can have reasonable prices”, for which he urgently summoned them to the ministry’s headquarters on Monday.
Still, the minister continues to rule out United We Can’s proposal to limit food prices, as “it doesn’t make sense in the design of the European Union”. Planas assured that the government is “determined” to ensure that citizens have “affordable prices” for food and recalled that apart from a temporary measure in Germany during the pandemic and another in Luxembourg, “there is nothing else at European level been” in this sense.
In the same position on Thursday was economic vice president Nadia Calviño, who assured that the government will “take all appropriate measures and that they will not have counterproductive effects” to further reduce inflation, although she would not clarify whether the executive will doing. decide to also reduce VAT on meat and fish, a measure demanded by the opposition and consumer organisations.
On the purple side of the government, they have proposed a 14.4% shopping basket discount – in addition to capping the price of some foods – and introduced a specific tax for large distributors. This is what Ione Belarra declared this Thursday in the halls of Congress. The aim of this measure is to subsidize food at the same rate that, according to data published yesterday by the INE, has been rising for a year. Belarra assured that the VAT reduction is “insufficient” and demanded more action from the PSOE.
But the Minister of Finance, María Jesús Montero, considered this bonus “impracticable” and defended the VAT reduction that has been applied as the best solution, complemented by the help of 200 euros for vulnerable families that can now be requested through the website of the Ministry of Finance.
For those in the food chain, their problem is cost, not margin. According to sources from Anged, the association of large distribution companies, the increase in food prices is due to a “serious cost problem”, but not because distributors are increasing their profit margins, as the purple part of the government indicates. “All links in the chain are doing their best to accommodate the historical escalation of raw materials and energy,” they add.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
