Parliamentary defeat and budget disputes

Spain's Congress is preparing to reject the 2024 General State Accounts (Cuenta General del Estado), marking the first such rejection since Spain's transition to democracy. Prime Minister Pedro Sánchez has governed without passing new national budgets, relying instead on extensions, extraordinary decrees, and budgetary modifications. The administration notably redirected nearly 2.4 billion euros in leftover European funds to cover public pension obligations. If the parliamentary plenary confirms the rejection, the Court of Auditors (Tribunal de Cuentas) will examine the institutional and financial consequences of operating without updated public accounts. The impasse reflects Sánchez's fragile parliamentary support, where the ruling coalition lacks a guaranteed working majority.

Audiencia Nacional expands party finance probes

Concurrently, the National Court is intensifying investigations into alleged irregular financing within the ruling Spanish Socialist Workers' Party (PSOE). Judge Ismael Moreno oversees a secret judicial proceeding examining undeclared cash disbursements made to party officials and staff at the party's Ferraz headquarters. Businessman and intermediary Víctor de Aldama testified that former minister José Luis Ábalos and former party organisation secretary Santos Cerdán instructed him to obtain funds for the party. Aldama claimed he delivered cash advances originating from Venezuela's state-owned oil enterprise, PDVSA, and submitted a stamped PDVSA envelope containing documentation that he claims proves unlawful party financing. Magistrates are also reviewing an allegedly fictitious 15-million-euro Venezuelan crude marketing contract.

Legal scrutiny of former ministers and Zapatero

The judicial inquiries reach high-ranking figures inside the socialist apparatus and the prime minister's family circle. Ábalos is currently held in pre-trial detention, while Cerdán entered provisional prison in September 2025 following allegations of rigging public works contracts. Furthermore, two former executives of Plus Ultra are scheduled to testify in court regarding former Prime Minister José Luis Rodríguez Zapatero's alleged role in securing the airline's government bailout in exchange for an illegal 1% commission. Judicial magistrates continue to examine separate allegations involving the prime minister's wife and brother, alongside broad inquiries into hydrocarbon tax fraud and party operations.

“An indictment is not a conviction.”

Political fallout and coalition tensions

Sánchez addressed the widening legal exposure during an interview on Cadena SER with journalist Aimar Bretos, declining to rule out the potential indictment of the PSOE as a corporate legal entity. The prime minister defended party members under investigation while maintaining that the socialist party has never engaged in irregular financing.

“That is why I defend their innocence and their integrity.”

The prospect of corporate charges poses severe risks to the coalition government. Second Deputy Prime Minister Yolanda Díaz of junior coalition partner Sumar warned that evidence of illegal financing reaching the PSOE as an organisation would trigger Sumar's immediate departure from the cabinet.

“This has a limit, which is its extension to the PSOE.”

Electoral pressure and upcoming court deadlines

The mounting legal and legislative difficulties coincide with worsening electoral projections for the ruling party. A recent NC Report poll for La Razón showed the PSOE falling below 25% voter support and dropping under 100 parliamentary seats, reflecting a loss of two million voters and nearly seven percentage points since 2023. Combined support for the opposition People's Party and Vox surpassed 50% in the survey. Meanwhile, the executive faces an ongoing migration situation in Ceuta that began in August 2026. On 22 September 2026, the Constitutional Court will commence deliberations regarding amnesty applications for Catalan pro-independence figures.