Spain’s Government Re‑presents Budget Deficit Path as Congress Rejects It Again

The Spanish government has re‑submitted the same fiscal‑deficit framework for the 2027‑2029 state budget after the Congress of Deputies rejected it in a first vote. The plan sets the public‑sector deficit at 1.8 % of GDP for 2027, 1.6 % for 2028 and 1.5 % for 2029, matching the targets previously approved by the Council of Ministers. A second vote is expected to be defeated again, leaving the executive to continue its budgeting work while the deficit path remains unapproved.

At the same time, the government is pushing a series of debt‑condonation measures. The Congress debated a €1.718 billion write‑off for Extremadura’s regional debt and a €18.791 billion reduction for Andalusia’s debt, which the government says would cut regional indebtedness by almost half and free billions in interest savings for health, education and social spending. Regional authorities, including the Junta of Andalusia, have also set their 2027 spending caps, approved morning‑classroom services for 1 650 schools, and added 150 technical‑integration‑social posts, all within the broader fiscal framework.

In the Canary Islands, the national Treasury has welcomed a positive assessment of a proposed autonomous‑financing plan that could bring more than €1 100 million of extra resources to the archipelago. The ongoing parliamentary debate, the repeated rejection of the deficit pathway, and the debt‑relief initiatives together shape a complex fiscal landscape ahead of the next general election.