The government wants to go on vacation with homework done to launch the budgets in September

The Spanish government is aiming to complete its budgetary obligations before the summer break so that it can launch the 2027 State General Budgets (PGE) in September. This strategy involves finalizing key steps in July, allowing officials to return from vacation with all necessary groundwork done and ready to submit the draft budgets to Congress by October 1st, as mandated by the Constitution. According to reports from La Moncloa, the government is considering holding two votes on stability objectives within July, which would help meet procedural requirements and ensure everything is set for presenting the PGE once the summer recess ends.

Carlos Cuerpo, the first vice president and minister of economy, has already taken the initial step in the drafting process by updating economic forecasts. The Ministry of Economy estimates that Spain’s Gross Domestic Product (GDP) will grow by 2.6% this year, surpassing earlier projections made in November despite ongoing conflicts. These projections suggest that growth will remain above 2% until 2029. Additionally, Cuerpo announced that Finance Minister Arcadi España will convene regional autonomous communities for a Council of Fiscal and Financial Policy (CPFF) meeting next week. During this session, discussions will focus on expenditure ceilings and deficit trajectories. Given the government's majority in this body, approval of proposals likely requires support from just one region governed by the PSOE party.

The government plans to debate and vote on the agreement reached by the Council of Ministers regarding stability targets during one of two extraordinary sessions scheduled for July: either Tuesday, July 14th, or Thursday, July 23rd. To meet the July 14th deadline, the CPFF meeting must occur by next Monday, followed by a weekly cabinet meeting to forward the proposal to the lower house. However, according to the CPFF regulations, meetings must be called at least 72 hours in advance with the agenda specified.

Historically, these stability targets have faced rejection in Congress. If that happens again, the Stability Law grants the government 30 days to approve another agreement for a second vote. Should the proposal be rejected on July 14th, the government could still manage to resubmit it for a vote on July 23rd, or even schedule an additional session before the end of July. Government sources acknowledge the possibility but remain cautious, stating they will see "if it fits" whether they can finalize matters before the summer break.

The urgency behind sending a deficit path that might initially face failure stems from the law requiring only two votes rather than specifying actions if both are rejected. Earlier this year, the government argued that rejection of such agreements does not strip them of their budgetary authority or obligation to fulfill commitments made to the European Commission. Without active stability goals, the government could proceed using references agreed upon with Brussels under the Medium-Term Structural Fiscal Plan, a crucial document outlining fiscal rules. This includes deficits of 1.8% in 2027 and 1.6% in 2028. Furthermore, without an established distribution among administrations—determining how much should be allocated to the central government, autonomous regions, and local entities—the Ministry of Finance assumes the Constitution takes precedence, compelling regional governments to maintain balanced budgets.

The government appears determined to reach the framework dictated by the Constitution, which stipulates that the executive must submit the budgets "at least three" times. This indicates a clear intent to adhere strictly to constitutional mandates while navigating potential challenges posed by legislative processes. As the timeline tightens, the government faces increasing pressure to ensure all procedural steps are completed efficiently, setting the stage for a smooth transition into the new fiscal year.