Congress is once again examining the deficit path, without the Government having secured sufficient support

This will be the fourth time this year that the House debates stability objectives and the PP has already announced its vote against

September 22 () –

The plenary session of Congress on Thursday, September 26, will debate and vote on the budgetary stability and public debt objectives of the administrations for the next three years, without the Government having secured sufficient support to overcome the parliamentary process.

The budget will thus return to the Lower House two months after it was rejected with the votes against from the PP, Vox, UPN and Junts. Now, the Lower House will again decide on the same deficit path and budgetary objectives, which serve as a preliminary to the preparation of the General State Budget (PGE) for 2025.

The PP’s economic spokesman, Juan Bravo, has already announced that his party will vote against the path because it is the same as in July; while Carles Puigdemont’s party maintains its vote from July and arrives at this vote after having added their votes to those of the PP and Vox to reject a bill by Sumar and other left-wing partners to regulate seasonal rentals.

FOREWORD TO THE BUDGETS

This will be the fourth time that Congress has debated stability objectives this year. The Government presented the 2024 budget twice, but those accounts were not processed due to the early elections in Catalonia and the 2023 budget, which was automatically extended on January 1, remains in force.

On both occasions, Congress did not pose an obstacle and the objectives passed the Lower House procedure. However, the PP’s absolute majority in the Senate overturned the path both times. This forced the Ministry of Finance to resort to a report from the State Attorney’s Office to overcome the Upper House’s veto and prepare the Budgets with the objectives that the Executive submitted to the European Commission in April 2023 within the Stability Programme.

In fact, these objectives submitted to Brussels are the Government’s ‘plan B’ to continue the budget process if the Cortes do not support the stability objectives next week, which establish a public deficit of 2.5% in 2025, 2.1% in 2026 and 1.8% in 2027 and to reduce public debt at the end of the period below 100%.

However, the First Vice President and Minister of Finance, María Jesús Montero, warned that this ‘plan B’ will cut the spending capacity of the autonomous regions and local governments by 11.5 billion euros. This is why the PSOE’s number two said that whoever does not support these objectives will “shoot themselves in the foot” wherever they govern because they will have fewer resources.

THE CENTRAL ADMINISTRATION ASSUMES MOST OF THE DEFICIT

The Executive’s fiscal proposal stipulates that the Central Administration assumes the majority of the responsibility for meeting the new fiscal objectives, given that in 2025 it must set its deficit at 2.2%, 1.8% in 2026 and 1.5% in 2027. For its part, the deficit target for the communities in 2025, 2026 and 2027 will be 0.1%, while local councils and corporations will have a balanced budget (0%) in 2025 and 2026.

It is also established that the public debt of all administrations will be reduced to 103.6% of GDP in 2025, a percentage that should be almost two points lower in 2026, when it reaches 101.8%. Finally, in 2027 it will be below 100%, standing at 99.7%.

Continuing with public debt, the target set for the autonomous communities is 20.8% of GDP in 2025, 20% for the following year and 19.4% in 2027. For its part, the debt of the local councils will continue to decline in the coming years, going from 1.3% in 2025 and 2026 to 1.2% in 2027.

SPENDING LIMIT OF ALMOST 2 BILLION

The spending limit, or ‘spending ceiling’, which is not subject to a vote, has been set at a maximum of 199.171 billion euros, including funds from the European Union.

The spending ceiling also includes a transfer from the State to Social Security for an amount of 22,881 million euros, 7% more than in the 2023 Budget. Social Security will be able to have a deficit of 0.25 in the next three years.