Spain's Congress rejects 2027 budget deficit path as PP, Vox and Junts vote together, raising early election stakes

The vote

Spain's Congress of Deputies rejected the government's deficit and debt targets for 2027–2029 on Tuesday, with 178 votes against and 167 in favour, plus five abstentions. The opposition People's Party (PP), far-right Vox, Catalan separatist party Junts, and regionalist UPN formed the blocking bloc, while left-wing Podemos and a deputy from Compromís abstained. The stability path, a legally required precursor to drafting the General State Budget (PGE) for 2027, sets a public deficit ceiling of 1.8% of GDP for 2027, falling to 1.6% in 2028 and 1.5% in 2029. The central government would bear most of the deficit, while autonomous communities would receive a 0.1% deficit margin, equivalent to roughly 5,849 million euros in additional spending capacity over three years.

Some will present this vote as a government success or failure, but the real question is whether we want communities to have more resources.

Junts and the coalition fracture

Junts deputy Josep Maria Cruset called the proposal "a scam for Catalonia" and accused the executive of mounting a "marketing operation to hide its weaknesses." Junts had already blocked a similar path in 2025, citing insufficient fiscal room for the regions. Podemos also distanced itself, abstaining over increased defence spending. The rejection leaves Prime Minister Pedro Sánchez's minority coalition without a clear parliamentary majority to pass the budget, expected after the summer. The PNV has publicly suggested that Sánchez call an early election by the first quarter of 2027 if the budget fails.

You have no majority to approve the budget and you are increasingly surrounded by corruption cases. Everyone knows you will have no budget. Stop deceiving people.

Two other votes divide the chamber

In the same extraordinary session, the Congress rejected a decree on RTVE designed to address a potential 1,000-million-euro VAT liability, also by 178 votes against and no abstentions. However, the chamber approved two social initiatives on dependency care. A decree extending state funding for dependency, granting regions an additional 6,200 million euros in 2026–2027, passed with 317 votes in favour and only Vox's 33 deputies opposed.

What happens next

Finance Minister Arcadi España confirmed that the cabinet will re-approve the same stability path on 21 July and submit it to a second extraordinary plenary on 23 July. If that vote also fails, a stricter fiscal framework agreed with Brussels automatically enters into force: the same deficit targets apply, but autonomous communities lose their deficit margin and must reach fiscal balance, potentially even a surplus. The government retains the option to present the budget bill in September regardless, using procedural calendar levers before any dissolution of parliament.

A recurring deadlock

Tuesday's vote is the third consecutive year that Congress has rejected a stability path under Sánchez. In July 2024, the chamber blocked the targets, and then-minister María Jesús Montero withdrew them in September before a second vote. In late 2025, two votes also resulted in rejection. The 2027 spending ceiling, announced alongside the path, reaches a record 226,032 million euros, but the ceiling itself does not require a parliamentary vote.