Not only the crisis in Ceuta and the corruption cases will mark the path towards the electoral battle of 2027. Also the domestic economy. About the middle and lower classes. Voters vote with their pockets and inflation - a hidden and cruel tax (it is very easy for it to go up and very difficult for it to go down) - removes and replaces governments all over the planet.
The PP knows this, and that is why it wants to get ahead of Pedro Sánchez with a plan to immediately lower the price of basic foods and thus alleviate the coming blow. The proposal that Alberto Núñez Feijóo's team has prepared is, as EL MUNDO has learned, to eliminate, de facto, VAT for most of the essential products in the shopping basket. The idea is to apply a 0% VAT rate to basic foodstuffs that are currently taxed at the super-reduced rate of 4% - bread, baking flour, milk, cheese, eggs, fruits, vegetables, legumes, tubers, cereals and olive oil - and also extend it to meat, fish and preserves, which are now taxed at the reduced rate of 10%.
The proposal, prepared by the economic vice-secretaries of the PP, Juan Bravo and Alberto Nadal, in coordination with Alma Ezcurra, goes beyond what the PP demanded in the previous inflationary crisis, when it proposed lowering the VAT on meat, fish and preserved foods to 4%. For these foods now opt for an anticipatory reduction. By eliminating VAT, the increase would be mitigated beforehand.
And a message of "protection of the people in a context of economic complications" will be sent, say sources familiar with the measure. Everyone understands the effects of inflation and everyone suffers them, although the blow is always much more pronounced for the lowest incomes, since for them basic foods represent a higher percentage of their monthly expenses.
With the Consumer Price Index (CPI) shooting up to 4.5% in August and with the expectation of greater increases due to the effect of the war in Iran on the price of gas and crude oil, the Government faces an autumn and winter even more difficult than what was already anticipated. Like five years ago, but in a leonine political situation. The Popular Party knows this, and that is why it has coined as an economic motto a phrase that, like inflation, everyone understands: "No one lives here."
And that is why Feijóo has given his people "the directive to focus on the economy", in parallel to the great political vectors of the daily fray. «We have to reorient priorities, but our political approach is subject to current events. Every week we are giving a message in that sense," say sources from Genoa, asked about the evident tactical turn - or acceleration - of the party in economic matters. "In the short term we are going to talk, in addition to corruption and Ceuta, about the price of fuel, heating, the shopping basket and the price of rent," the Feijóo economic team points out.
"The PP returns to the IPC," emphasize other sources from the national leadership, who believe that the economy is a vital flank for the popular party to differentiate itself not only from the PSOE, but also from Vox. «There are people who do not come to the PP because of Ceuta, the corruption and the amnesty, but they can come because of this; "We know how to manage the economy," they say in Genoa.
Food is, along with energy, the component that is putting the most strain on the shopping basket. The price of unprocessed foods rose 4.5% year-on-year in August and has increased by 41.8% since Sánchez took office. "They are essential goods that have a very low price elasticity: families cannot stop buying them when they rise," they explain in the popular economic team. "It is the same exception that justifies reducing VAT on electricity and gas: the reduction reaches the consumer without distorting their consumption decisions, because these are products that they will continue to buy anyway," they add.
The data show that de facto eliminating VAT has a direct effect on families' pockets. When the VAT on the most basic foodstuffs was lowered from 4% to 0% in January 2023, the Bank of Spain estimated a pass-through to consumer prices of approximately 90%, and the CNMC did not detect systematic signs of a lack of pass-through by distribution.
