Sanchez pledges mortgage help, Feijoo promises to tackle drought ahead of Spain vote


MADRID (Reuters) –

Prime Minister Pedro Sanchez pledged to help Spaniards with rising mortgage costs, while his conservative rival, frontrunner Alberto Nunez Feijoo said he would address water shortages as they officially launched campaigns on Thursday for an election later this month.

Sanchez said he would make banks extend mortgages by seven years, a measure he said would save Spaniards an average of 300 euros a month on their payments. If he wins the July 23 vote, Sanchez said he would also introduce a law to raise the minimum wage each year to 70% of the average salary.

“We know that it is difficult to make ends meet because of Putin’s bloody war in Ukraine,” Sanchez said at a rally in Madrid. “We are going to respond and my commitment after July will be to tell the financial sector that we are going to extend mortgages for seven years so that families have some relief.”

A Bank of Spain report published on Thursday found that 9% of Spanish households could not pay their bills in 2022 due to the cost-of-living crisis and rising interest rates. The European Central Bank’s benchmark rate, the Euribor, has risen to 4.01% in June from -0.34% in February 2022 when Russian President Vladimir Putin ordered troops to invade Ukraine.

Feijoo of the opposition People’s Party (PP) said he would address issues such as water supply amid increasingly frequent droughts and an exodus from Spain’s rural areas.

In a manifesto published on Monday, the PP said it would invest in water infrastructure including reservoirs and canals, without providing details.

“Wherever I end up after (the) July 23 (election), I will keep my feet on the ground… I will continue to have modesty and humility as guiding beacons in my political actions,” Feijoo told a small crowd in Os Peares in Galicia, the northwestern region where he previously served as president.

Spain is suffering a long-term drought, registering the driest start to a year since records began in the first four months of 2023.

Meanwhile, increasing numbers of mainly young people are moving from rural to urban areas in search of work, and the government has estimated that half of Spain’s villages are at risk of being abandoned in the next few decades.

Opinion polls tip Feijoo’s PP to win most seats in the election, ahead of the governing Socialists (PSOE) of Prime Minister Pedro Sanchez, though the gap between the two parties is narrowing.

Sanchez called the snap election after his coalition government performed poorly in local elections in May.

According to a tracking poll by GAD3 for ABC, the PP is on course to win 152 seats versus 109 for the Socialists.

That would leave Feijoo needing to form a coalition with the anti-Muslim, anti-feminist Vox to achieve a 176-seat majority in parliament, the first time a far-right party would play a role in government since Spain’s return to democracy in the mid-1970s.

Vox is projected to win 31 seats and the far-left Sumar platform led by Labour Minister Yolanda Diaz – a potential PSOE ally – 28 seats, according to GAD3.

(Reporting by Charlie Devereux and Corina Pons; editing by Aislinn Laing and John Stonestreet)

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