The Council of Ministers will approve the 2024 non-fiscal spending limit todayBudget stability targets, known as ‘spending caps’, signal the start of preparation of General Government Budgets (PGE) for next year.
This was announced yesterday by the fourth vice president and Minister of Finance and Public Mandates, María Jesús Montero, at a press conference following the meeting of the Fiscal and Fiscal Policy Council.
This step is the starting point. Approval of the first public accounts of this legislature of the PSOE and Sumar coalition government, Aiming to strengthen economic growth and job creation, but also taking into account the complex international panorama and the reactivation of European fiscal rules.
In addition to the spending ceiling, the government will also approve the budget stability targets set for 2024, 2025 and 2026, which will accompany the dossier submitted to the Congress of Deputies.
The government in office at that time sent the 2024 budget plan to Brussels in October. The budget deficit forecast for next year is around 3 percent and the public debt ratio to be below 110% of GDP by 2023.
The Treasury is considering making the deficit more flexible for autonomous communities by 0.1 percent in 2024, compared to the budget balance in last April’s Stability Program. This one-tenth margin for the autonomous communities will be borne by the Central Government, whose deficit will be 2.7% in 2024, according to the target cited by Montero. The budget balance is determined for local organizations.
The Senate’s role in approving stabilization targets
According to the Budget Stability Law, before the public accounts project, the Government must approve both the limit of non-financial expenditures – the expenditure ceiling – and the budget stability targets in the Council of Ministers, in line with the report from the Fiscal Policy Board and the Ministry of Finance. (CPFF) and then send everything to the Cortes.
The Cortes Generales will decide whether to approve or reject the stability targets proposed by the governmentThis tax, which has been suspended for years due to the pandemic, needs to be brought into line with European tax rules.
There is uncertainty about what will happen in the Senate on this occasion. PP has absolute majority in the Upper House and could reject the deficit and debt targets that accompany spending caps.
The government insists they have the legal guarantee to regulate public accounts even if the Senate disrupts the path to stability. The government’s goal is for the 2024 public accounts to be finalized in the first quarter of next year.
The Senate had already reversed course in 2018
The last time this happened was in 2018. PP rejects Government’s spending cap in the Upper House Pedro Sánchez At that time, the Executive decided to use the previous reference to deficit and debt to present the budget project, but this project was eventually rejected by Congress – the Senate does not have the power to veto the project.
But now the scenario is more uncertain because European fiscal rules have been suspended since 2020 and there are no such fixed targets for recent years, although there are indicative references in the previous year’s macroeconomic statements and budget plans sent to Brussels. . .
Therefore, the forecast of María Jesús Montero, fourth deputy head of Government and Minister of Finance and Public Affairs, is that the 2024 General State Budgets (PGE) will be approved during the first quarter of the year, with the support of partners. PSOE had a statement in Congress as their support for public accounts was “part of the discussions” on investment agreements.
PSOE wanted to change the law to avoid this veto
In 2018, PSOE tried to implement a legal reform to bypass parliament’s veto. PP in the Senate, So if it were only the Upper House that rejected the Government’s budget targets, it would only have to go back to Congress so that the spending cap could be approved by a simple majority, that is, with more votes in favor than against.
What the socialists wanted to submit to a bill to reform the Organic Jurisdiction Act on urgent measures in the implementation of the State Pact on gender-based violence was an amendment to the Budget Stabilization Act.
In the text of the amendment, “If the budget stability and public debt targets are approved by the Congress, they will be rejected by the Senate, the targets in question will be submitted to a new vote in the Congress, and if approved by a simple majority, they will be approved.” PSOE, which was never included in the law in question.
They warned from the PP that if the Government carries out an educational activity, it will be referred to national and European bodies of education. Reforming the Budget Law to eliminate the Senate’s irrevocable veto power. objectives of stability and public debt, introduction to the preparation of General Government Budgets (PGE).