The Council of Ministers has again approved, on Tuesday, the same non-financial spending ceiling and the same stability and debt targets for public administrations that the Congress rejected in July. This was confirmed by the first vice president and minister of Finance, María Jesús Montero, during the press briefing after the Cabinet meeting.
The approval of the deficit and debt path for 2025-2027 for each level of government (State, Social Security, regional authorities, and local corporations) is the preliminary step toward drafting the State Budget for 2025, which the Government plans to present to the Congress in the coming weeks, even though parliamentary support remains uncertain.
At the end of July, the plenary session of Congress rejected the budgetary stability and public debt goals for the entire public sector, with Junts voting against, joining the PP and Vox.
From the Executive they hope to reach agreements with Junts and ask them to vote in favor of the fiscal path this time, as it is described as beneficial for Catalonia.
Thus, the Government has reapproved the same non-financial spending ceiling, or ceiling, adopted in July, which sets a cap of 199.171 billion euros, including funds from the European Union.
Within the spending ceiling there is also a transfer from the State to Social Security totaling 22.881 billion euros, a 7% increase from the 2023 Budgets. Social Security is projected to run a deficit of 0.2% over the next three years.
Misma senda fiscal y de deuda
The Government reiterates its targets and has again approved a fiscal path that would leave the public deficit at 2.5% in 2025, 2.1% in 2026, and 1.8% in 2027, while reducing the public debt below 100% of GDP by the end of the period, a timetable that will be shaped by the reactivation of European fiscal rules (suspended since 2020 due to the Covid-19 emergency).
The Central Administration will bear most of the responsibility for meeting the new fiscal targets, since in 2025 it must place its deficit at 2.2%, then 1.8% in 2026 and 1.5% in 2027. The 2025-2027 goals for the autonomies are 0.1% in each year, while municipalities and local corporations are expected to balance in 2025 and 2026 (0%).
It is also stated that public debt for all administrations should fall to 103.6% of GDP in 2025, to about 101.8% in 2026, and below 100% in 2027, reaching 99.7% that year. For regional authorities the target is 20.8% of GDP in 2025, then 20% in 2026 and 19.4% in 2027. Local government debt is anticipated to decline from 1.3% in 2025 and 2026 to 1.2% in 2027.
It is emphasized that this does not amount to approving the Budgets. If the path were rejected again in Congress, the government would have to draft Budgets for 2025 following the current, more restrictive deficit and debt path. This would be the fourth time this year that the lower chamber reviews deficit targets. The government had presented 2024 Budgets on two occasions, but those accounts were not tramitated due to provincial elections in Catalonia; the 2023 Budgets, already in force, were extended automatically on January 1.
The Prime Minister, Pedro Sánchez, confirmed that the Government is working toward approving a new General State Budget for 2025 that carries the DNA and hallmark of the coalition government. He described them as social and ambitious Budgets that would consolidate and expand the public investment the administration has been carrying out.
Government sources have confirmed an intent to complete the legislative term, even in the face of a potential rejection by the Cortes Generales. If needed, the government could extend the 2023 Budgets for a second consecutive year and would not be obliged to call early elections, according to several aides.
In sum, the framework reaffirms the ceiling on spending and the path for deficit and debt, while keeping doors open to negotiations with key parties and to the presentation of the 2025 accounts in parallel with other legislative considerations. The focus remains on delivering social, robust public spending that supports ongoing investment and services while aiming for fiscal steadiness in the medium term.