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In brief

  • Congress voted 178–167 to reject the deficit path on 23 July 2026, identical to the failed vote on 21 July, marking the sixth parliamentary veto in two years.

  • The government will draft the 2027 budget using deficit targets already sent to Brussels: 1.8% of GDP in 2027, 1.6% in 2028 and 1.5% in 2029, relying on a State Attorney's report to skip the traditional prior approval.

  • The rejected 0.1% deficit margin would have given autonomous communities additional spending capacity of 5,849 million euros over three years; without it they face a more restrictive path toward budget stability.

  • The same session approved initial proceedings for a bill allowing the state to assume 83,254 million euros of regional debt from the FLA, with PP and Vox amendments rejected.

Madrid
Madrid · Spain
How it came to this
  1. 21 JulFirst rejection of the stability path by Congress with votes from PP, Vox and Junts
  2. 23 JulSecond rejection of the same deficit objectives; government confirms it will draft budget without congressional approval

What happened in Congress

The lower house of Spain's parliament rejected the government's deficit and debt objectives for public administrations on Thursday, 23 July 2026, with 178 votes against and 167 in favour. The vote against came from PP, Vox, Junts and a single UPN deputy. The governing PSOE, Sumar, ERC, EH Bildu, PNV, BNG and Coalición Canaria voted in favour, while Podemos abstained. It was the second defeat for the same stability path in ten days: the identical proposal had already been voted down on Tuesday 21 July, and it marks the sixth time Congress has vetoed fiscal targets in the last two years.

Government reaction: budget will go ahead without approved path

Treasury minister Arcadi España arrived at the extraordinary plenary session, which closed the political calendar before the summer break, saying he was confident PP deputies had reconsidered. He challenged the opposition to choose between defeating the government and giving regions an extra 5,849 million euros of fiscal room over the next three years. After the vote, the government signalled it would move directly to drafting the 2027 State Budget, setting its deficit targets according to commitments already made to Brussels: 1.8% of GDP in 2027, 1.6% in 2028 and 1.5% in 2029. The Treasury considers the vote a procedural step and relies on a State Attorney's report from the tenure of former minister María Jesús Montero to justify proceeding without parliamentary approval of the stability path.

“Espero que hayan reflexionado sobre lo que es perder dinero para sus comunidades autónomas, 5.800 millones de euros.”

Arcadi España, minister of Finance

Regional fiscal impact

The rejected 0.1% deficit allowance would have given the 15 autonomous communities under the common regime room to run a small deficit instead of balancing their budgets. Without it, they face a more restrictive path: the state absorbs 1.5% of the 1.8% total, with the remainder divided between Social Security (0.2%) and the regions (0.1%). Municipalities must reach budget equilibrium. Opposition regions led by the PP, which govern most autonomous communities, argued the 0.1% figure is insufficient given their spending responsibilities. The lost fiscal margin over three years amounts to 5,849 million euros, according to the Treasury.

Composition of 2027 public deficit target% of GDP
Central state1.5
Social Security0.2
Autonomous communities0.1
Municipalities0
Central state
1.5 % of GDP
Social Security
0.2 % of GDP
Autonomous communities
0.1 % of GDP
Municipalities
0 % of GDP

Data from the article text

Debt forgiveness bill advances

In a separate vote the same day, Congress gave initial approval to the government's bill on exceptional financial sustainability measures for autonomous communities, despite PP and Vox tabling full amendments. The text allows the central state to assume 83,254 million euros of regional debt, primarily originating from the Autonomous Liquidity Fund (FLA). Arcadi España called the initiative one of solidarity and responsibility, noting that seven out of every ten euros would go to regions governed by the main opposition party.

“7 de cada 10 euros serán para autonomías gobernadas por el principal partido de la oposición.”

Arcadi España, minister of Finance

Political reactions

PP deputy José Vicente Marí Bosó accused the government of trying to appear busy and failing to comply with the law, calling on the executive to present a new fiscal proposal. Junts spokesperson Miriam Nogueras had warned before the debate that her party would vote the same way again, and deputy Josep María Cruset repeated his criticism that the deal was a scam for Catalonia. PNV deputy Idoia Sagastizabal described the debate as a déjà vu. The Treasury minister, who had urged the opposition not to opt for blockage, received the same answer twice in four days.

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Sources and context

  • LaVanguardiaon 23 Jul at 20:07El Gobierno tramitará Presupuestos sin visto bueno del Congreso a la senda de déficit
  • eldiario.eson 23 Jul at 20:04El Congreso rechaza otra vez la senda de déficit con el voto de PP, Vox y Junts y da vía libre al Gobierno para el Presupuesto
  • 20 minutoson 23 Jul at 20:04El Congreso rechaza la senda de déficit por sexta vez en dos años, pero el Gobierno seguirá adelante con los Presupuestos
  • El Periódicoon 23 Jul at 20:04El Congreso tumba definitivamente la senda de estabilidad, pero da aire al Gobierno con otras leyes
Arcadi España
Minister of Finance (Hacienda) who defended the deficit path and debt forgiveness bill
José Vicente Marí Bosó
PP deputy who argued the government should present a new fiscal proposal
Miriam Nogueras
Junts spokesperson in Congress who warned the same proposal would get the same votes
Josep María Cruset
Junts deputy who called the deficit path a scam for Catalonia
Idoia Sagastizabal
PNV deputy who described the debate as a déjà vu

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Published on 23 Jul at 20:15.

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Text generated by AI from the reports of the publishers listed and checked automatically, with no human editor. How Pollar is made

In this text

  1. 1What happened in CongressWhat happened in Congress
  2. 2Government reaction: budget will go ahead without approved pathGovernment reaction: budget will go ahead without approved path
  3. 3Regional fiscal impactRegional fiscal impact
  4. 4Debt forgiveness bill advancesDebt forgiveness bill advances
  5. 5Political reactionsPolitical reactions

Based on reports by

LaVanguardia, eldiario.es, 20 minutos, El Periódico

List of sources

Government · Madrid

Spain's Congress rejects deficit path for sixth time in two years, but government will forge ahead with 2027 budget

PP, Vox and Junts voted down the fiscal stability path for the second time in a week, blocking a 0.1% GDP deficit margin for regions. The government will now draft public accounts based on EU commitments alone, while a separate debt forgiveness bill advanced.

Madrid

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AI text based on reports by LaVanguardia, eldiario.es, 20 minutos and other publishers. Published on 23 Jul at 20:15.

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