Spain’s prime minister said Wednesday that his government has begun work on a 2027 budget, effectively shelving hopes of passing a spending plan for this year as his minority administration struggles to secure parliamentary support.
Socialist Prime Minister Pedro Sánchez’s government, which relies on a fragile network of parliamentary allies to pass legislation, still operates under accounts from 2023 since it has been unable to secure the approval of a new fiscal framework.
The Spanish Constitution allows for the previous year’s budgets to be automatically extended until there are new accounts under certain conditions if there is no parliamentary agreement.
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Speaking at an economic forum in Barcelona, Sánchez said the government would launch the formal process for drafting and approving a budget for 2027, with a decree initiating the procedure to be published this week.
“The government is going to begin the steps to present and approve the new general state budget for the year 2027,” Sánchez said, adding that he hopes to send the proposal to parliament during the second half of the year.
The announcement marks a tacit acknowledgement that the government is unlikely to secure passage of a budget for 2026 for the eurozone’s fourth-largest economy.
Government ministers had until now continued to express hope that lawmakers could still approve a spending plan for the current year.
The government withdrew its proposed 2025 budget before a parliamentary vote late in 2024 after the Catalan separatist party Junts, whose support would be needed, signalled it would vote against the measure.
Faced with a fragmented parliament and difficulties advancing legislation, Sánchez’s administration has increasingly relied on so-called royal decree-laws, an emergency legislative mechanism that allows measures to take effect before receiving parliamentary approval.
Despite the budget impasse, Spain’s economy has remained one of the strongest performers in Europe, buoyed by tourism, consumer spending and investment.
The government predicts the Spanish economy will expand by 2.2 percent in 2026, nearly triple the 0.8 percent growth projected for the entire eurozone.
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Extending the 2023 budget yet again leaves the government with less room to manoeuvre on fresh initiatives and social programmes.
