The Organization for Economic Cooperation and Development (OECD) has proposed this Monday in Madrid to raise taxes on electricity companies in order to dedicate a part of the income to offset the rise in the electricity bill paid by both private consumers and companies. Business. “It is something that we think governments should consider” in a context such as the current one marked by the Russian invasion of Ukraine, stated its secretary general, Mathias Cormann, during a speech at the New Economy forum. The body, which considers the Spanish economy’s exposure to war to be “limited”, calculates that the energy companies of the developed world can obtain joint extraordinary profits of 200,000 million euros due to the rise in oil and gas prices.
“There is capacity to increase taxes on these companies to cushion the effects of rising energy prices on certain groups, as they have already done Italy and Romania, stressed the head of the OECD. Cormann has stressed that he plans to discuss this measure also with the Spanish Executive.
A tax increase in these circumstances would be “more than justified” to help reduce the electricity bill of consumers and the most vulnerable groups. Among Cormann’s meetings for this Monday, one with the Prime Minister, Pedro Sánchez, and with King Felipe VI. One of his objectives, he has said, is to see first-hand Spain’s proposal to Brussels to decouple the price of gas from that of electricity.
However, he has warned that any fiscal response has to be “very, very targeted”, because a generalized tax increase cannot take place, “but very targeted at certain specific sectors”, in addition to taking into account the turn assumed by the central banks in their monetary policies in response to inflationary pressures.
The secretary general of the OECD has highlighted that the organization is already “focused on helping the reconstruction and recovery” of Ukraine after the war, so, in his opinion, the time has come “to think about a Marshall Plan” for Kiev that will be designed with all its members.
He knows in depth all the sides of the coin.
Regarding the impact that the conflict will have on the Spanish economy, Cormann has pointed out that its direct effects will be “quite low”, since its exposure to Russia and Ukraine is “limited”, although it is indirectly affected by the rise in energy prices.
In addition, he has pointed out that agricultural imports of cereals and some raw materials such as sunflower are important. On the other hand, he specified that barely 2% of the international travelers who arrived in Spain in 2019 were Russians, and although it is foreseeable that the war will affect international mobility, “the fact that Spain is far away” geographically from the place of the conflict it can also help “mitigate” this impact on tourism.
The head of the OECD has described as “totally appropriate” the sanctions adopted by the EU and the United States against Russia, and has recalled that the organization he directs has already internally suspended Moscow’s participation in its activities as a member. Asked if Russia’s position with Ukraine is not similar to that of Israel in Palestine, Cormann considered that it is not an issue “comparable at all” and has denounced Moscow’s “unprovoked aggression” against the neighboring country, which it is already causing “suffering” to its population.