The Council of Ministers will approve the 2024 non-fiscal spending limit today as part of budget stability targets, known as spending caps. These caps mark the start of preparing General Government Budgets (PGE) for the coming year.
María Jesús Montero, the fourth vice president and Minister of Finance and Public Mandates, announced this yesterday at a press briefing after the Fiscal Policy Council meeting.
This step signifies the initial phase of the current legislature under the PSOE and Sumar coalition. The aim is to support economic growth and job creation while accounting for a challenging international environment and the reactivation of European fiscal rules.
Beyond the spending ceiling, the government will also set budget stability targets for 2024, 2025 and 2026, which will accompany the dossier submitted to the Congress of Deputies.
Previously, the 2024 budget plan was sent to Brussels in October. The forecasted budget deficit for next year is around 3 percent, with the public debt ratio expected to stay below 110% of GDP by 2023.
The Treasury is considering providing a 0.1 percentage point flexibility for autonomous communities in 2024 relative to the last April Stability Program. That narrow margin would rest on the Central Government, whose deficit would be about 2.7% in 2024, according to the target cited by Montero. Local governments’ budget balances are also part of the overall equation.
The Senate’s role in approving stabilization targets
Under the Budget Stability Law, before the public accounts project is finalized, the Government must approve the non-financial expenditure limit and the budget stability targets in the Council of Ministers, aligned with the Fiscal Policy Board and the Ministry of Finance, and then forward everything to the Cortes Generales.
The Cortes Generales will decide whether to approve or reject the stability targets proposed by the government. This framework, long suspended during the pandemic, is being aligned with European fiscal guidelines.
There is uncertainty about the Senate’s stance this time. The PP holds a strong position in the Upper House and could oppose the deficit and debt targets that accompany spending caps.
The government maintains that it has the legal authority to regulate public accounts even if the Senate delays the process. The objective is to finalize the 2024 public accounts in the first quarter of the next year, with support from coalition partners and allies.
The Senate’s historical position
The last time a similar situation occurred was in 2018 when the PP rejected the Government’s spending cap in the Upper House. At that time, the executive decided to use the prior deficit and debt reference to present the budget project, but Congress ultimately rejected the proposal, since the Senate cannot veto independently.
Today the outlook is more uncertain. European fiscal rules have been paused since 2020, and specific targets have not been fixed in recent years, though indicative references exist in the previous year’s macroeconomic statements and budget plans submitted to Brussels. The forecast remains that the 2024 General State Budgets (PGE) could be approved in the first quarter of the year with support from partners, and with PSOE discussing investment terms as part of parliamentary negotiations.
PSOE’s attempt to alter the process
In 2018, PSOE explored a legal reform to bypass the parliament’s veto mechanism. If the Senate rejected the Government’s budget targets, the proposal could return to Congress to seek approval by a simple majority. The intended reform would have amended the Budget Stabilization Act as part of broader measures.
The reform proposal suggested that if Congress approved the budget stability and public debt targets, a Senate veto would be circumvented by a new vote in Congress. That initiative was never enacted.
Critics warned that altering the balance of veto power could trigger broader constitutional and European oversight concerns and complicate the path for General Government Budgets (PGE). The debate continues to shape how stability targets and debt objectives influence upcoming budget preparations.
[Endnote: This summary reflects ongoing budget discussions and is intended to provide a concise overview of timelines, political dynamics, and fiscal considerations relevant to policy planning in Spain. Attribution: government planning documents and legislative updates.]