The budget machinery, not very well oiled, has started to function. The Government has instructed the ministries to begin sending in their needs for 2027; the Deputy Prime Minister for Economy has announced that on June 23 he will present the macroeconomic framework —a condition necessary for the presentation of the public accounts—, and the Treasury must finalize the deficit targets with the autonomous communities to present the path of fiscal sustainability and the spending ceiling.
The chances that the Budgets will be approved are infinitesimal. But the need to align its drafting with the PSOE’s collapse is pressing. The budget calendar will provide the dignified argument sought by the Prime Minister to call elections early without the objective cause being the drip of judicial cases. And it allows the main governing party, but also its coalition partners, to have the entire state apparatus to promote their budget announcements for 2027 as a genuine electoral program.
The milestones are as follows: Carlos Cuerpo will present in June the macroeconomic framework that lays out the seams for drafting Budgets, and already signals the government’s intent and proactivity. The Treasury must present the spending ceiling and the targets for public debt and the deficit, the corset that must be endorsed by Parliament. In previous cycles, the Government and Congress got stuck in a loop with the legal approval of this path as a prerequisite to approving the Budget project. But now they have found legal support in the legal interpretation of the State Attorney’s Office that, if Congress does not approve deficit targets, the targets sent to Brussels are sufficient to continue the budgetary process.
“The calendar allows the main governing party and its allies to have the entire state apparatus to promote their budget announcements as an electoral program”
These two steps would take place over the summer, as a counterweight to the succession of judicial news that the PSOE will face, and which will only find real balm in the results of the Spanish national team at the World Cup. Champions or defeated, the session will begin in September with the various budget announcements, a true showcase for the different political formations.
According to the consulted sources, the government’s minority party (and its different factions) already has very advanced proposals for the 2027 public accounts. The work has been carried out not so much with a view to a parliamentary agreement, for which Junts is essential, but rather as a political program for the 2027 elections. This will push the ambition and the spectacle of the initiatives proposed, which in turn will push the already slim chance of their approval even further away.
Thus, the Government may reach the framework that says the public accounts project must be approved by the Council of Ministers before the end of September. In the current legislature this milestone has not been met, which already points toward presenting the accounts in Congress and, therefore, toward the inevitable defeat. But on this occasion, defeat is the best political exit, as happened in the 2019 early election. The president gains legitimacy to bring the elections forward by a few months, given the Chamber’s rejection to push ahead with expansive budgets and certainly laced with electoral measures.
If the Budget project reaches Congress, it will be processed as urgent so that it is ready to come into force on January 1. That would allow, by late November or early December, the president to concede to reality and activate the electoral machinery for snap elections in February or early March.
This pertains to the narrative that sketches the exit path with greater political dignity. But what will be the content of this proto-program electoral?
The consulted sources highlight housing and infrastructure as the areas that, since the budgets approved in 2023, have fallen the most out of date. Housing is the most obvious, because, although the regulations have allowed financial backing to the State Housing Plan presented by Housing Minister Isabel Rodríguez in April, it remains the hot topic that captures the most public attention.
The 2025 blackout and the successive railway disasters have brought to the table the urgent need to improve maintenance and to adapt infrastructure to the new needs of the population and the productive fabric. Productive investment is more centralized and depends more on the Government than housing, which suggests that the bulk of the proposals will go to this area.
“Sources highlight housing and infrastructure as the areas that, since the budgets approved in 2023, have fallen the most behind”
Another mission for the 2027 Budgets will be to cover the holes left by the end of the European Recovery Plan, Next Generation. The departments most favored by these funds, such as Ecological Transition, Digital Transformation and Industry, will face a very significant reduction in resources after the disappearance of these programs. Although the Government’s intention is to continue channeling productive investment through the fund managed by ICO España Crece, these ministries will need a budgetary boost to continue with part of the activities they have carried out with European support. The governing parties want to keep increasing the weight of renewables in the mix of energy, supported by the good results of these policies in the current energy crisis, so that line of action will also have a significant space in the public accounts.
The Minister of Science and Innovation, Diana Morant, announced at the end of April a strategy of deep tech which aims to cushion the end of the Next Generation funds by giving a framework to foster technological initiatives through 2030. But in the current context of defending strategic sovereignty and the threat to Europe posed by restrictions on the use of AI of American origin, one can expect the announcement of new measures on the development of language models (which will have continental-wide coverage).
The Ministry of Defense has not needed budgets to flood the sector with billions of euros in public tenders, but the bill is the propitious framework to formalize and bolster these policies that can already be anticipated to create friction within the partners.
“The bill is the propitious framework to formalize and bolster these policies that can already be anticipated to create friction within the partners”
We should also expect some measure from the Treasury, such as updating the rates of the Personal Income Tax (IRPF) with inflation or some other significant move in tax figures. The former Finance Minister, María Jesús Montero, was particularly conservative and immobile, as well as very protective of compliance with spending rules and the Brussels fiscal corset
, but the new minister, Arcadi España, has ample room to propose tax cuts, if a progressive fitting can be found. The White Paper on the experts’ reform of the budget is intact, but it is hard to imagine that, in a moment of extreme polarization, a rise in environmental taxation would be proposed in Spain.
Although health and education are two critical electoral factors, the central government has less room to influence them from Madrid. The autonomous communities have, however, continued to have budgets over these years, and they have made the spending decisions they deemed appropriate. The rise in health wait lists or the neglect that teachers in several regions report is the result of the political will of regional leaders. Nevertheless, it is almost impossible for the parties’ electoral apparatus to refrain from making announcements in these areas, pulling out all the creative strokes.
Although the coalition government has at its disposal the tremendous media lever of being in power to amplify the announcement of its measures, they are weighed down by nine years as incumbents. As many of the consulted sources lament, it is much easier to craft a political program from the opposition, where the public does not ask, “Why didn’t you do it sooner?”
