Spain seeks €7bn from banks and energy firms to fund inflation package

Pedro Sanchez' initiative is the boldest move by any major EU member to offset the worsening cost-of-living crisis

The bill to tax the banks fleshes out the policy promise made by Spanish prime minister Pedro Sanchez earlier this month. File picture: Paul White/

Spain is seeking to tax banks for windfall profits made from net interest and fees charged to clients, in the boldest move against lenders by any major EU member to offset the impact of the worsening cost-of-living crisis. 

A bill introduced to the Spanish parliament aims to set a 4.8% tax on Spanish banks. It also seeks to charge a 1.2% levy on the domestic sales of energy firms. The measures, put forward by parties of the ruling coalition, would also penalise companies that pass the costs of the new taxes on to their clients.

The details of the proposals put an end to more than two weeks of uncertainty over the government’s  plans, initially outlined by prime minister Pedro Sanchez earlier this month. Now the administration, which aims for approval later this year, will have to negotiate with a wide group of congressional allies to pass the bill in the splintered parliament, where no party has a majority.

The government has struggled in recent months to gather support to pass significant legislation, but it has never lost a major vote. That track record indicates that it will likely clinch enough backing for the windfall taxes.

The levies, which aim to raise €7bn over the next two years, have raised tensions between Mr Sanchez and big business. 

• Bloomberg