Spanish Politics in 2025 – What we can expect next year

Spanish politics in 2025 is going to need some radical improvements, especially after the outcry of Valencia flooding; its showed how distant Madrid was to the rest of country. As such The Spanish Government must provide the right signals.

And it will start with policies which make an impact to the lives of everyday people. By approving the extension – for six months – of the main transport discounts, as it promised to Podemos last Thursday in exchange for its support for the Justice Efficiency Law.

The catalog of regulations approved today in the last Council of Ministers of the year, a new temporary tax on energy is added to the package of measures approved for 2025, with which President Pedro Sánchez closes the year.

Spanish Politics in 2025

Also the revaluation of pensions to 2.8%, the increase in the minimum exempt from personal income tax to 15,876 euros and the anti-takeover shield that gives Moncloa the possibility of vetoing foreign investments in strategic Spanish companies.

What we can expect next year

Some will continue, but with caveats. The electric social bonus will be diluted as the months go by. Other measures of the anti-crisis shield decline. The VAT rate on basic foods returns to normal and will return to 4%. Pastes and seed oils will be at 10%, with the exception of olive oil, which will remain at the super-reduced rate.

Energy tax

The Executive takes advantage of the last Council of Ministers of the year to fulfill one of its political commitments. Approves a new temporary rate on energy companies, with which it will try to correct the resounding parliamentary defeat suffered by the extension of the tax in the Plenary Session of Congress last week.

However, the new energy tax will also have to pass parliamentary scrutiny; to be approved, the Government has included decarbonization deductions, as Junts demanded.

On the other hand, Moncloa keeps the equation of the diesel tax with that of gasoline in a drawer, despite the fact that the European Commission has been demanding its approval for some time. It should be remembered that one of the milestones included in the fifth tranche of European funds that Economía formally requested last Friday depends on this tax.

Transportation discounts

The decree includes the extension of Transportation discounts, with the metro at 50% and the Cercanías free, until June 30, 2025. The measure has been included within the pact that the Government reached with Podemos last week in exchange for the support from Ione Belarra for the Justice Efficiency Law. The cost could reach 800 million euros.

However, the permanence of the aid runs into the initial plans of the ministry led by Óscar Puente. The increase in supply – driven by the free use of part of the passes and tickets – has increased traffic and saturated – on several occasions – the railway service. Initially, Transport planned to maintain the discounts, but only for those under 30 years of age and retirees.

Revaluation of pensions

A 2.8% increase in contributory pensions is approved for next year. In this way, an average benefit of 1,441 euros per month – according to the latest data for the month of November – will rise by about 40 euros to 1,481.35 euros, or in other words, about 565 euros per year. The measure will benefit nearly 9.3 million people who receive 10.3 million contributory pensions, in addition to the 720,148 pensions corresponding to the State Passive Classes Regime.

For their part, minimum and non-contributory pensions, those received by the “most vulnerable” people, will rise above the average CPI of 2.8%, although the exact figure is still unknown.

In addition, the decree includes improvements regarding partial retirement, expanding access rights in general, maintaining and recovering others that had been limited.

The VAT reduction on food declines

The normalization of inflation causes one of the measures that the Government approved to face the price crisis to decline. VAT on food returns to its initial rate on January 1. In this way, basic foods, such as bread, eggs, vegetables or fruits and olive oil, will remain at 4%, from the current 2%. For their part, pasta and seed oils will be taxed at a rate of 10%, from 7.5%, which will expire on December 31.

shield ‘antiopas’

Far from the measures of the social shield, the Council of Ministers extends the anti-takeover shield for two more years, with which it intends to continue “protecting” strategic Spanish companies. The measure gives the Government the possibility of authorizing – or vetoing – foreign investments in listed strategic companies in which it is intended to exceed 10% of the capital, as well as in unlisted ones in which the investment exceeds 500 million euros.

Moncloa activated the veto button months ago when it disapproved the takeover bid by the Hungarian Magyar Vagon for Talgo.

Suspension of evictions

The measure was already in the draft of the decree that the Government drew up from the beginning, but Podemos scores the goal. Belarra demanded a commitment to maintain the suspension of evictions for the most vulnerable, asserting her four deputies in Congress and saving Sánchez from a parliamentary defeat in the last plenary session of the year.

In this way, the prohibition on launching mortgages for vulnerable families is extended throughout 2025.

Electric social bonus

The mechanism will start in 2025 with a 50% bill reduction for vulnerable users, and 65% for severely vulnerable users. From then on, the discounts will be reduced by 7.5% every three months, to remain at 35% and 50%, respectively.

Until September 30, the deduction for vulnerable families was 65%, and 80% in the case of severely vulnerable people.