Although the President of the Government,
Pedro Sánchez
, blamed
Vladimir Putin
on Wednesday for the
rampant inflation
plaguing Spain, the publication this Friday of the final CPI for February, of 7.6%, has forced the Government to recognize that
the rise in prices had already started before the invasion of Ukraine
, which took place on February 25, three days before the end of the month.
They also admit that the rise in prices will be aggravated from now on by the war and that it will have
economic consequences that will last for years.
"
We already had a supply shock since last year
and what this situation does is intensify it and add uncertainty. We have to prepare so that we can respond, without knowing how long it will last and knowing that
the invasion is very serious and will have consequences for many years.
The short-term shock is brutal but the implications go far beyond the short term (...) What we are seeing in recent weeks is going to have a
very direct impact on inflation and economic growth We
do
not know how long it will last. We have already been experiencing this shock in recent months and now we have to adapt," the Secretary of State for the Economy,
Gonzalo García Andrés, warned this Friday.
He, who belongs to the superior body of
commercial technicians and economists of the State
-the elite of the Ministry- and who is more involved in macroeconomic information than in the big messages, recognizes that the imbalance of supply and demand and the rise in prices we already had "
since last year
", actually produced by the
pandemic
.
We must not forget that inflation began to rise worryingly after last summer: after standing at 3.3% in August, it went to 4% in September and has already shot up in the last quarter: 5.4% in October , 5.5% in November and 6.5% in December.
Inflation was already setting a record for the last three decades
long before Putin deployed his troops.
Sánchez, by contrast, tries to blame Russia for inflation in an attempt to rewrite the narrative.
"
It is important to tell the truth to the citizens
.
Inflation
, energy prices,
are the sole responsibility of Putin
and his illegal war in Ukraine. It is the truth, ladies and gentlemen," he said on Wednesday at the government control session in The congress.
García Andrés' statements came after the INE corrected its first inflation estimate for February, which pointed to an increase in the CPI of 7.4%, and admitted that prices actually rose 7.6%, the
largest increase since December 1986
.
This unprecedented increase in inflation
impoverishes the population
and especially puts pressure on the
pockets of low incomes
due to the composition of their consumption.
As different study services have warned, such as Euler Hermes or CaixaBank Research,
low incomes allocate a much higher percentage of their consumption to essential goods and services
, such as the energy bill or the shopping basket.
As it is precisely these components that have risen the most (electricity has become more expensive by 80.5%; liquid fuels, 52.3%; and hydrocarbons, 33.4%),
the families with the least income
are the suffering comparatively
the greatest loss of purchasing power.
The war is going to trigger inflation in Spain.
The Funcas
analyst service
forecasts that it will reach
8.6% in the month of March
and that
on average in the year it will reach 6.8%,
compared to the 4.6% that they forecast in their last projection.
In 2021, that average was 3.1%.
The Government trusts in Brussels and the unions
The Government seems to have no tools to contain inflation.
In fact, it entrusts its descent to
two levers over which it has no direct power
: on the one hand, the
negotiation between unions and employers
to agree on a "rent agreement" and, on the other, an
energy reform that depends on the will of Brussels
to try to ensure that the rise in gas prices is not transferred to the price of electricity.
"There are two fundamental measures: delink the evolution of the
price of electricity from the price of gas
, and ensure that
the rise in wages and other capital income is smoothed out.
The social agents are already meeting and we think that it is one of the ways of fundamental response to reduce uncertainty, which is very negative for the activity. Clarity must be provided, coordination between the social agents because we have to protect the progress towards price stability. The Government and the social agents can contribute to providing this environment of stability", stated the Secretary of State.
The unions demand salary increases that protect the purchasing power of the workers and are subject to pressure from the Executive, which on this occasion has aligned itself with the employers and calls for moderation.
But in order to accept this slightest increase in salaries,
CCOO and UGT ask the Government not to sit idly by.
"To talk about an income pact, the Government has to commit to
limiting energy prices
, to modify the energy price formation system, but it also has to commit to
approving the RED mechanism
of protection for protect the workers who are being deeply affected by this rise in prices, in addition to
another series of measures
that cushion this rise in prices in goods and services that are basic to be able to live", they have requested this Friday.
The
RED Mechanism
is a new
type of ERTE
that can only be used by companies when the Council of Ministers activates it for a specific sector.
The Executive is working on activating it for travel agencies, and now the unions are asking that it also be done for companies affected by price increases, such as
industrial
or
agri
-food companies .
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Know more
Minister council
UGT
INE
Ukraine
CPIThe INE corrects itself and announces that inflation grew by 7.6% in February, the highest rise since 1986
AENCCEOE puts as an example of moderation the rise of 2.1% that it has applied to its salaries this year
SMIThe Government promises to bring the Minimum Wage to 60% of the average salary, but 1,000 euros already represents 66.7%
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