The Spanish authority that meets when Parliament is dissolved (Diputación Permanente del Congreso de los Diputados) will reportedly give its approval to the extension of ... the government's anti-crisis support package on Friday.
"I call on the parties to give their broad support," Prime Minister Pedro Sánchez said from Brussels. With the lower house's approval, these measures, which include tax cuts on energy, will remain in force until 31 December, although the government is working to extend them beyond that date, even though it may still be a caretaker government at that time.
If the government does not approve a further extension, at 12.01am on 1 January 2027, after the last chime of the clock, the fuel subsidy, direct aid to transport, agriculture and fishing, the enhanced discounts of the social bonus, the ban on layoffs in companies receiving aid and the 80 per cent discount on electricity tolls will disappear.
When asked about the possibility of approving new measures before the elections so that they come into force from January, First Deputy Prime Minister Carlos Cuerpo pointed out that the government has already implemented two extensions to the anti-crisis shield through quarterly packages and these may not be the only ones.
"We are updating the measures to continue providing support under these difficult circumstances," Cuerpo said, although he did not specify which support measures might be extended to 2027 or when a new extension would be approved.
For the time being, one of the main uncertainties is what will happen to the fuel subsidy. The current discount of 20 cents per litre on petrol and diesel will remain in place throughout November, after the year-on-year rise in the price of both fuels exceeded 15 per cent in September.
However, if the safeguard clause is not triggered again, the subsidy will drop to eight cents per litre in December, before being phased out completely on 1 January unless a further extension is approved.
The main obstacle is the political calendar. General elections are scheduled for 29 November, so any decision after that date and before the formation of a new government will be the responsibility of a caretaker government. Its powers, however, are limited by law, which restricts its activities to the routine conduct of public affairs, unless there are duly substantiated reasons of urgency or grounds of general interest that justify further action.
This does not rule out a further extension of the anti-crisis shield. The government could once again resort to a royal decree-law if it can justify the urgency of the matter, a measure that would allow the aid to continue without waiting for a new government to be formed.
The legislation would subsequently have to be ratified by Parliament, either by Diputación Permanente or by Congreso de los Diputados once the parliamentary term has begun. The government has the legal scope to act, although it will have to justify the need to extend the measures during a period of political transition.
Fear of a price surge
Meanwhile, the government is anticipating a possible rise in food prices. The latest anti-crisis package, due to be approved this Friday, tasks the CNMC competition regulator with monitoring prices throughout the entire food supply chain, from production to distribution in supermarkets.
The aim is to identify potential pressures and gather information to enable further measures should rising energy costs end up having a more significant impact on the cost of the shopping basket.
The government's concern stems from the delayed impact of the energy crises on food prices. Rising costs of fuel, electricity and fertilisers may take several months to feed through to final prices.
For now, food inflation stood at 2.3 per cent in September, below the overall CPI, which reached 4.9 per cent . However, the government wants to prevent a repeat of the surge seen following the 2022 energy crisis, when food price rises exceeded 15 per cent.
Scrutiny will also extend to the energy sector. The government intends to analyse the profits associated with oil refining in order to assess possible further measures that would help spread the cost of the crisis.
At the same time, Moncloa has asked the European Commission to examine the possibility of introducing a tax on the windfall profits of energy companies, an issue which is on the agenda for Thursday's European Council meeting in Brussels.
At present, the government estimates that the anti-crisis measures will cost more than ten billion euros by the end of the year and believes that they have succeeded in halving the impact of the energy crisis on prices.