How much does Spain owe? Public debt continues to grow but decreases by almost two points compared to GDP in a year.

In the European Union, there is no single simple “parliamentary procedure” to change the public debt target, because that target is anchored at several normative levels. There are two basic levels: (1) primary legislation (Treaties, where the reference value of 60% of GDP is stated) and (2) secondary legislation (regulations that develop the Stability and Growth Pact). Each level involves a different circuit of intervention by the European Parliament and national parliaments.

1. Modifying the ordinary rules (secondary legislation)

The most common way to “modify the debt target” in practice is not to touch the 60% in the Treaties, but rather to redefine how it is applied and what pace of reduction is required through regulations. This is done by the ordinary legislative procedure of the EU:

• Initiative of the European Commission: The Commission presents proposals for regulations or directives that revise fiscal rules (for example, how the required annual adjustment is calculated, what margins exist in recession, how reforms and investments are valued, etc.).
• European Parliament and Council as co-legislators: The ordinary legislative procedure applies. This means:
  • First reading in the European Parliament: the competent committee (usually Economic and Monetary Affairs, ECON) drafts a report, proposes amendments, and the Plenary votes on a position.
  • First reading in the Council (Economy and Finance Ministers, ECOFIN): Member States negotiate their position (possible “common position”).
  • If the EP and Council do not agree, a second reading is opened and, if disagreement persists, a conciliation committee is convened to agree on a compromise text.
  • The agreed text must be approved by a majority in the European Parliament and by a qualified majority in the Council.
• Role of national parliaments: They are not co-legislators, but:
  • They exercise political control over their governments (which negotiate in the Council).
  • They can activate subsidiarity control (sending “yellow/orange cards” if they consider a proposal invades national competences).
• Entry into force: Once adopted, regulations are published in the Official Journal of the EU and are directly applicable. This can change, de facto, how the debt target is interpreted and operated without touching the 60% in the Treaty.

2. Modifying the 60% reference value (Treaties)

The numerical debt target (60% of GDP) is a “reference value” stated in the Treaties (Art. 126 TFEU and Protocol No. 12). To change it would require a Treaty revision, with a much more demanding procedure:

• Initiative: It can come from a Member State, the European Parliament, the Commission, or the Council itself. The reform of the Treaty is proposed (for example, modifying Protocol No. 12).
• Convention and Intergovernmental Conference (IGC):
  • The European Council decides whether to convene a Convention with representatives of governments, national parliaments, the European Parliament, and the Commission to draft amendment proposals.
  • Subsequently, an IGC of governments meets to negotiate the final text of the Treaty reform.
• Intervention of the European Parliament: It must be consulted or give its consent, depending on the procedure used, and participates politically in the Convention and the debate on the reform.
• Ratification by Member States: The new Treaty or modified protocol must be ratified by each Member State according to its Constitution:
  • Usually by voting in national parliaments.
  • In some cases, also by referendum.
• Entry into force: Only when all States have ratified does the reform enter into force. Until then, the 60% target remains formally valid.

3. Specific role of national parliaments

Although the debt target is a European norm, its modification always involves a chain of parliamentary procedures:

• At the European level, the European Parliament acts as co-legislator in reforms of fiscal regulations and as a consultative or consenting actor in Treaty reforms.
• At the state level, the national parliaments:
  • Control the government when it negotiates in the Council and European Council.
  • Must ratify any Treaty reform that alters the debt reference value.
  • In many countries, must also adapt internal legislation (including budgetary stability rules) to the new European rules.

In summary, changing how the debt target is applied is done through ordinary EU legislation, with a strong role for the European Parliament. Changing the reference value itself (for example, from 60% to another figure) requires a Treaty reform process, much more complex and necessarily involving national parliaments.

The Bank of Spain is not the body responsible for issuing or deciding the volume of public debt —that competence belongs to the State, mainly the Ministry of Economy and the Treasury—, but it does play a key role in its supervision, operational control, and financial monitoring within the Spanish economic system and the Eurosystem.

1. Institutional role of the Bank of Spain regarding public debt

State debt is authorized and managed by the Government (Treasury) according to the framework approved by the General Courts (State Budgets, stability laws, etc.). The Bank of Spain acts mainly:

• As a national central bank integrated into the Eurosystem (together with the European Central Bank and the other euro area central banks).
• As a financial agent of the State for certain technical functions: issuance, registration, settlement, and custody of debt in the securities market.
• As a supervisory authority and compiler of statistics on public finances and their interaction with the financial system.

2. Operational functions regarding public debt

On the more “market” level, the Bank of Spain has several relevant competences:

• Technical management of issuances: it collaborates with the Treasury in organizing auctions of Treasury Bills, Bonds, and Obligations, providing infrastructure and relations with participating financial entities. It does not decide how much is issued, but it operates the “how” in technical and payment system terms.
• Account registration system: it administers or cooperates in administering the accounting register in which debt is represented as book entries, i.e., who holds which securities at each moment. This is an essential function of control and legal security.
• Payment and settlement systems: it ensures that the purchase and sale of public debt is correctly settled (delivery of securities against payment) through payment and securities systems linked to the Eurosystem. This function is critical for the stability of the debt market.
• Monetary policy operations: public debt is the reference asset in Eurosystem operations (liquidity auctions, asset purchases, collateral). The Bank of Spain executes these operations decided by the ECB in Spain, which implies continuous supervision of the quality and eligibility of public debt as an asset.

3. Prudential supervision and risks linked to public debt

As a supervisory authority of credit institutions (in coordination with the ECB’s Single Supervisory Mechanism), the Bank of Spain controls how public debt affects the solvency and risks of the banking system:

• It monitors the exposure of banks to sovereign debt, both Spanish and from other countries, because excessive concentration can be a source of systemic risk.
• It requires that these exposures be properly reflected in capital ratios and stress tests, and can propose macroprudential measures if it sees risk accumulation.
• It integrates these analyses into financial stability reports, where it assesses how the level and dynamics of public debt affect the financial system and, by extension, the economy.

4. Statistics, information, and macroeconomic monitoring

Another central competence is the preparation and publication of statistics and analyses on public finances:

• It compiles statistics on Public Administration debt according to different criteria (according to the Excessive Deficit Protocol, financial liabilities, etc.), coordinated with Eurostat and the ECB.
• It publishes regular reports (bulletins, annual reports, studies) in which it assesses debt sustainability, fiscal risks, and the impact of budgetary policy on macroeconomic stability.
• It provides information and advice to the Government, the Cortes, and European bodies on the debt situation and implications for compliance with fiscal rules.

5. What the Bank of Spain does not do regarding public debt

It is equally important to point out the limits of its competences:

• It does not decide the level of indebtedness nor the deficit: that is the responsibility of the Government and Parliament.
• It does not approve the financial conditions (terms, coupons) of issuances, although it may technically advise the Treasury.
• It does not exercise political control over the debt, but rather technical, statistical, and prudential control over its functioning in the markets and its impact on the financial system.

In summary, the Bank of Spain’s competences regarding public debt focus on ensuring that the debt market functions in a safe, transparent, and stable manner, that associated risks are monitored, and that there is rigorous information on the volume and composition of the debt, all in coordination with the Treasury, the ECB, and European institutions.

The last general elections in Spain were held on July 23, 2023 (the well-known “23J”). They resulted in the current Congress of Deputies and, after the subsequent investiture, the current coalition Government.

Results of 23J: distribution of seats and weight of each bloc

Based on data used as official reference by subsequent polls and analyses, the distribution of seats and vote percentages of the main parties was as follows:

• People's Party (PP): 137 seats and around 33.1 % of the votes. It was the most voted force and obtained the largest parliamentary representation, but fell short of an absolute majority (176 seats).
• Spanish Socialist Workers' Party (PSOE): 121 seats and about 31.7 % of the vote. It came in second in seats and votes, but with a relatively close difference to the PP.
• Vox: 33 seats and approximately 12.4 % of the votes, according to data used as reference by subsequent polls from Sigma Dos, Ipsos, etc., which compare their estimates with the 23J result.
• Sumar (a coalition to the left of PSOE, which integrated Podemos in 2023): 31 seats and around 12.3 % of the votes, according to those same polling series explicitly citing their July 2023 result.

In addition to these four nationwide forces, several territorial or nationalist/independentist formations obtained representation in the Congress:

• ERC (Esquerra Republicana de Catalunya).
• Junts (Junts per Catalunya). Various sources indicate that in 2023 it obtained one more seat than the estimate of some current polls, which attribute 6 deputies, allowing to infer that in 23J it had 7 seats.
• EH Bildu, which polls currently place at or above its 6 seats in 2023.
• PNV (Basque Nationalist Party), which started with 5 deputies in 23J, according to several polls comparing their current ranges with that baseline.
• BNG (Galician Nationalist Bloc), Coalición Canaria, and UPN (Navarrese People's Union), which maintained a smaller presence (one or a few seats each), completing the spectrum of minor groups.

Overall, the right-wing bloc (PP and Vox, plus occasional support like UPN and CC) totaled 170 deputies (137+33), below the absolute majority. The bloc that enabled Pedro Sánchez’s investiture relied on the 121 PSOE seats, 31 from Sumar, and parliamentary support from several nationalist and independentist parties.

Which parties form the current Government of Spain?

After the July 2023 elections, no party reached a sufficient majority to govern alone. The PP candidate, Alberto Núñez Feijóo, did not obtain the necessary support in the investiture. Subsequently, Pedro Sánchez was proposed again as candidate and was invested thanks to a broad parliamentary majority arranged through agreements with several formations.

The current Government of Spain is a coalition Government led by Pedro Sánchez and formed by two parties:

• PSOE (Spanish Socialist Workers' Party), which acts as the major partner and holds the Presidency of the Government, the main vice presidencies, and most ministerial portfolios.
• Sumar, which acts as the minority partner in the coalition and holds several key ministries (for example, Labor or Social Rights at different times in the legislature, as well as other portfolios that have been reconfigured with Government reshuffles).

This Executive relies in the Congress on an investiture bloc that includes, with different nuances and degrees of stability, forces such as ERC, Junts, EH Bildu, PNV, and BNG. However, these formations are not part of the Council of Ministers: their role is that of parliamentary partners, not Government members.

In summary, the 23J elections drew a very fragmented scenario, with an advantage in seats for the PP but without a sufficient majority, and allowed the reestablishment of a progressive coalition Government between PSOE and Sumar, supported by agreements with several nationalist and independentist parties to carry out the investiture and legislative agenda.