The Congress of Deputies approved the stabilization path for 2024-2026, along with the budget deficit and debt targets set by the Government for the State, autonomous communities, municipal councils, and Social Security. This step is the prelude to the 2024 Budget, after which the proposals move to the Senate, where the ruling expectation is a simple majority rejection. Earlier in the day, the PP had already voted against the plan during the Wednesday session.
The government secured 179 votes in favor and 171 against in a second appeal vote, following a 171-vote tie in the first round because Junts did not cast a vote that time. The outcome reflected a closely contested political moment, with various parties aligning differently on the stability path.
First Vice President and Finance Minister María Jesús Montero defended the stability framework. The plan included a 2024 spending ceiling set at 199,120 million euros above the historical maximum, representing a slight increase of 0.5 percent. It did not face a separate vote alongside the rebalancing measure aimed at guiding finances toward a 3 percent GDP deficit target, which was approved with the same vote tally of 179 in favor and 171 against.
The stability framework envisions reducing the public deficit to 3 percent of GDP in 2024 in line with European Union rules under the Stability and Growth Pact. It anticipates progress in 2025 to 2.7 percent and in 2026 to 2.5 percent of GDP. Under the government’s forecast, the debt of all administrations would fall to 106.3 percent of GDP in 2024, then 105.4 percent in 2025 and 104.4 percent in 2026.
blockade in the Senate
Predictably, the path to stability cleared in the Congress is expected to stall in the Senate due to the PP’s absolute majority. The bill is projected to be rejected there, sending the matter back to the Government, which would need to present a new proposal within 30 days.
The government presented a second approach that would allow the 2024 budget project to be introduced even before Senate approval of the deficit and debt targets. This would ground the 2024 Budget in the Stability Program Update that was submitted to the European Commission in April, remaining consistent with a 3 percent GDP deficit target for 2024. However, the distribution of the targets would differ by administration, imposing stricter goals on autonomous communities and municipalities.
During the parliamentary debate, Montero criticized the PP for the Senate’s final rejection of the deficit and debt path proposed by the Government, describing it as restrictive to the economy. Regions and local governments would face targets tougher than those proposed by national authorities, a factor they had to consider for their 2024 budget projects.
Both components of the spending ceiling path form part of the preparatory steps for the 2024 Budget. The Government affirmed its dedication to advancing the legislative process as quickly as possible and to presenting a budget that supports the productive sector and promotes sustainable growth. Montero highlighted a commitment to smart industrial policy and to aligning objectives with the long-term health of public finances, even as European fiscal rules are being re-evaluated. It is anticipated that the 2023 deficit will close around 3.9 percent of GDP, as Brussels has noted in its projections.