Spanish PM Pedro Sánchez: ‘When 2021 is over, consumers will have paid the same for electricity as they did in 2018’

Spanish Prime Minister Pedro Sánchez arrives at his interview with EL PAÍS at La Moncloa, the seat of power, with the price of electricity on his mind. It is clear from his replies that he has been focusing on this issue for several days, having memorized facts and figures and debated alternatives to solve the record high prices that Spanish consumers are currently facing. The price of power is currently a major problem for the Spanish government, which is a coalition of Sánchez’s Socialist Party and leftist Unidas Podemos. Sánchez clearly had an urgency to explain and repeat a commitment: despite the lack of control over the wholesale power market, the effect of which is seeing record prices for electricity, by the end of the year residents of Spain will have paid the same on average for their bills as in 2018, thanks to the intervention of the government. Sánchez also spoke about his confidence that there will be a “fair recovery” in Spain after the effects of the coronavirus pandemic, trusting that this, along with his radical Cabinet reshuffle, will improve his party’s standings in the polls and allow the government to reconnect with a progressive electorate over the remaining two years of his mandate. What follows is an edited version of the full interview, which was published in Spanish on Sunday.

Question. In recent days the government has conveyed a sensation of powerlessness in the face of the rise in the cost of electricity. Do you really not have any room for maneuver in order to control this rise?

Answer. The government is taking charge of the concern among citizens. And we are working on a plan to reach a concrete commitment, and that is that by the end of 2021 Spaniards will look back and see that they have paid a similar and comparable amount on their electricity bills as they did in 2018. That is the objective and the commitment: that all citizens with average consumption by the end of 2021 pay a similar and comparable amount as they paid in 2018, logically discounting inflation.

Q. And how are you going to do that? What instruments do you have?

A. It is important to clarify in this debate that one thing is the progress of the wholesale price in the market and another is your electricity bill. We pay our bills monthly. What doesn’t make sense is to look at the debate on a daily basis, because we don’t pay our bills daily. What the government can do is to cushion the changes in that wholesale price. First, with structural reforms, and with a solid commitment to renewable energies – not just due to issues of climate change, but also because they are cheaper. The electricity future markets are already saying that, thanks to renewables, Spain will have lower prices than France or Germany in 2022 and 2023. What’s more, we have reduced VAT [sales tax] from 21% to 10%. This is benefitting 28 million consumers, and 2.8 million companies. It means a reduction in the state’s revenues of €1.4 billion. That absorbs 12% of the change in your bill. Thirdly, there is the protection of the most vulnerable consumers with social protection, with a ban on cutting off electricity supply for those who can’t pay or with energy vouchers. We are protecting 1.1 million consumers. What’s more, we have a plan to define a minimum-usage level in the areas of electricity and energy. And finally, the government has taken measures in this fourth area to revise the additional profits of the power companies. We have set aside €650 million that were destined for the electricity companies in order to divert them to consumers. We are going to take measures to guarantee that objective: that Spaniards, when they see what they have paid on their electricity bills in 2021, see that it is the same or comparable to the figure that they paid in 2018, not counting inflation.

Q. The state is shouldering the protection of the vulnerable, but it is not intervening in the market. There have been no reforms of the electricity market after you have spent three years in government.

A. We have approved a sustainability fund for the electricity system, which is currently working its way through parliament. We are going to remove a series of costs from electricity bills that are currently being paid for by citizens and that, once validated by Congress, will be paid for by the companies that generate that energy, nuclear, gas… The government has done and will continue to do everything possible. With the [European coronavirus] recovery plan, we are going to assign €1.2 billion to self-generation initiatives.

We have had the best example of the best patriotism among Spaniards, who trust their national health system and science, and do not put any faith in hoaxes

Q. You are talking about what has been done until now, about things that are in Congress for the coming months. But many people, above all your coalition partners in Unidas Podemos, are calling for something to be done now because there are forecasts that prices will continue to rise until March 2022. Do you have something that is on its way right now?

A. Unidas Podemos has proposed the creation of a public company. It’s an old debate, but when we agreed our coalition program we discussed it and it was left out. It is not a part of our coalition agreement. As such, the government does not feel concerned by that proposal. But in Congress, a parliamentary commission is going to be created precisely to see which proposals are being made by the key figures and the political groups. We will listen. But the important thing is the commitment of the government that we are going to maintain electricity bills at similar levels to those of 2018.

Q. Why doesn’t Spain do something similar to what France has done, for example, fixing the price of nuclear energy?

A. The energy mix is different from country to country. We are making an unequivocal commitment to renewable energies. What’s more, not many people know this, but Spain is the country with the biggest source of solar power in Europe and one of the biggest for wind energy. Some 90% of the wind farms in our country are nationally manufactured; 60% of solar parks are nationally manufactured.

Q. Could this crisis destroy the government?

A. We are committed to the coalition program that we created. Before reaching the halfway point of the term we have already delivered 34% of our coalition government commitments, and we are going to reach 38% in the current semester. This is a government that is advancing. In 2008, it took 12 years to recover the levels of employment prior to the [global financial] crisis. We have a shared objective, and that is that Spain, by 2023, be a better country than the one we found in 2018 [when Sánchez came to power], a more advanced and prosperous country, and one that, ultimately, emerges from the biggest disaster in the last 100 years. Today we are at levels of employment that are more or less similar to those from before Covid, and we have taken 18 months to get here.

Q. Seventy percent of the population of Spain is now vaccinated, but the pandemic is still out there. When will we return to pre-pandemic normality? Or will we never get that life back?

A. We have set an example both in Europe and the whole world as to how to do things well. We are getting closer and closer to getting our normality back. There are a number of lessons that can be taken from this 70%. Firstly, it would not have happened if we didn’t have formidable healthcare professionals. Secondly, that this vaccination process has not depended on the bank account nor deep pockets of each taxpayer. And thirdly, we have had the best example of the best patriotism among Spaniards, who trust their national health system and science, and as such, do not put any faith in the humbug or superstitions that we have seen in the form of hoaxes.

Q. What guarantees are there that the European Covid recovery funds for Spain are not all going to end up in the pockets of large companies?

A. We have already executed more than 16% [of the funds] and many of the projects are linked to more local development; as such, they are SMEs. Above all, these funds are going to be managed by SMEs, by the local economy, by the self-employed. But it is also true that there are certain projects that are drivers for the modernization of sectors such as automotion and that need the assistance not just of SMEs, but also big companies.

Q. Can major changes based on funds of €72 billion really be achieved with this parliament, with a prime minister who only counts on 120 seats? [The PSOE and Unidas Podemos are governing in a minority, counting on support from other, mostly regional parties in order to pass legislation.]

A. The new politics in which we find ourselves revolve precisely around being able to articulate and structure our differences. We have 155 seats with Unidas Podemos [176 seats are needed for a majority] but in these 18 months of the political term, practically all draft bills, royal decrees, have been backed by Congress. We need to make sure that the digital revolution and the environmental revolution are as integrated as possible, from a territorial, generational and also gender point of view. That these two revolutions are felt by the working middle class as opportunities for progress and the creation of jobs for them.

Any conduct [of former king Juan Carlos], any investigation that could be opened in this environment, is not going to be halted in any way

Q. The Cabinet reshuffle you carried out this summer was unprecedented. Now you are relieving Adriana Lastra from her role as spokesperson in Congress. Are you changing nearly everything because nearly nothing worked?

A. There are some months that could be years. We have lived through a terrible pandemic. We have had two or three Cabinet meetings a week, with very tough decisions being taken. That also has a personal cost. Politics are done by people who have to renounce their family life to defend what they love the most, which is their country. I am extremely grateful for everything that all of the ministers have done. Many of them have accompanied me even before I became prime minister. It is also important that in this new stage of economic recovery that the teams be renewed, and that there be new blood. The PSOE has got great reserves, and the best reserves come from the municipal level, and that is exactly where I have turned for this recovery. In the parliamentary sphere, Adriana Lastra has done an extraordinary job. From the [PSOE] federal congress in October, as general vice secretary, she will be 100% dedicated to the party because we have municipal and regional elections in 2023, and then the general elections at the end of 2023.

Q. The Supreme Court prosecutor is investigating former king Juan Carlos I for allegedly receiving illegal commissions. Should he return from Abu Dhabi and offer explanations?

A. With regard to king Juan Carlos I believe that I have clearly expressed my position in previous statements. To reassure citizens, know that the rule of law works, the Tax Agency is working, the prosecutor also, and there are stories about the latest developments in the media. As such, the most important thing to know is that any conduct, any investigation that could be opened in this environment, is not going to be halted in any way. I believe it is also important to restate that my commitment to the Constitution and the parliamentary monarchy is absolute. An institution is not in play here; but it is possible to be judging a person via public debate.

Q. But this is damaging the institution…

A. That debate does not help. But I also state just as emphatically as I have done in connection to king Juan Carlos, that I recognize the efforts and the advances that the current head of state and the Royal Household are making in terms of transparency and setting an example.

Q. Does king Juan Carlos owe Spaniards an explanation?

A. First let us see how things progress. It’s important, at least as the prime minister of the government, for the presumption of innocence to be maintained. According to what we see, a much clearer answer to that question will or will not be possible.

Q. What or who has failed in Afghanistan if the Taliban are back in power after 20 years?

A. It’s a failure of the international community. Let’s not beat around the bush. But, in Afghanistan as well as the 70% vaccination [of Spanish residents], Spain has displayed the finest of patriotisms. The president of the European Commission said that Spain represented the soul of Europe. We are taking the rough with the smooth. Our country is a formidable one, one that has very lofty values. The other day I read a survey [from British public opinion company YouGov, and carried out in eight countries] that said that 91% of Spaniards said they would not have any problem if any of their relatives came out of the closet and recognized they were homosexual. In the US the figure is 66%. In France it’s 57%. Our country embraces victories in rights and freedoms. With Afghanistan and the vaccine campaign we have given ourselves and the world a lesson. The opposition asks, “What do you have to celebrate about Afghanistan?” As a collective success, we have saved the lives of 2,000 people. They are few, probably, but we would have to ask each of them if this exercise has been worth it or not.

Q. What has this difficult year and a half taught you?

A. Humility is the big lesson for politics and for the West: we are not safe, we are not immune. And also being conscious of the fact that, beyond all the noise, this is a great country that, when this unity is called upon, can also move forward. Now we have the most extraordinary conditions to modernize the country as was done in the era of the Transition [when Spain moved from the Franco dictatorship to democracy]. This moment for Spain is one of a crossroads: if we want to advance or we want to be at the back of the line for the whole process of change and revolution that the world is going through.

English version by Simon Hunter.