Spain confronts rising public debt and financing gaps as 2025 repayments loom

The Spanish state faces a shortfall in financing its public debt. By 2025 the government must repay €113.5 billion, but the provisional budget only allocates €91 billion, forcing an additional €22.5 billion of new borrowing. Debt reached €1.729 trillion in May 2026 – 100.2 % of GDP – a historic peak, with further amortisation commitments exceeding €120 billion for 2026.

A Tribunal de Cuentas follow‑up report shows that public companies still lag in correcting contract and remuneration deficiencies for senior executives. Overall compliance with earlier recommendations is just 58.5 %, with many entities only beginning corrective actions after the new audit began. Problems include missing procedures for senior‑management contracts, inadequate controls, and variable compensation not tied to pre‑set objectives.

Both issues highlight ongoing fiscal and governance challenges for Spain’s public sector as it navigates higher debt service needs and seeks to improve oversight of state‑owned enterprises.