The Congress is holding an extraordinary Plenary this Thursday in which the deficit path and the budget stability objectives linked to the General State Budgets (PGE) of 2027 will be submitted to a second vote. The forecasts indicate that the plan will be rejected again, repeating the outcome of the previous week.
On July 14, the absolute majority formed by PP, Vox, Junts, and UPN already rejected the deficit objectives for the first time, in a session where Podemos and the deputy from Compromís integrated into the Mixed Group, Águeda Mico, opted for abstention.
After that parliamentary setback, the Executive approved again this Tuesday in the Council of Ministers the same stability path and sent it back to the Lower House to try to push it through for the second time. In case it fails again, the Government will continue with the preparation of the 2027 accounts with a stricter fiscal planning for the autonomous communities, while respecting the limits set by the European Union.
The intention of the Executive is to start conversations about the 2027 Budgets with the different groups in Congress once the internal agreement within the Government is closed, with the aim of being able to register the project after the summer.
Stability path 2027-2029
The Government's proposal places the deficit of the entire Public Administrations at 1.8% of GDP in 2027, 1.6% in 2028, and 1.5% in 2029. Within that total, the Central Administration will assume the largest part of the imbalance, with rates of 1.5%, 1.4%, and 1.3% in the period 2027-2029.
In the Council of Fiscal and Financial Policy, it was approved, despite the vote against from the regional councilors of the PP, that the communities have a deficit target of 0.1% for each of the three years, which translates into a fiscal margin of 5,849 million.
Although that 0.1% of GDP has been set as a joint reference for the autonomous communities, the Ministry of Finance has shown willingness to negotiate an asymmetric deficit, adjusted to the specific fiscal reality of each territory.
Regarding local entities, Finance has established that municipalities must maintain budgetary balance in the three contemplated years. For its part, Social Security will have a deficit target of 0.2% of GDP in 2027 and 0.1% in both 2028 and 2029.
Descending path of debt and spending rule
Regarding public debt, the Government foresees a downward trajectory over the next three years, going from 97.6% of GDP in 2027 to 96.4% in 2028 and to 95.3% in 2029.
For the Central Administration and Social Security, a joint reduction of debt is projected to 77.6% in 2027. In 2028, the level should be at 77% of GDP and in 2029 the target drops to 76.6%.
In the case of autonomous communities, the debt target is set at 18.9% in 2027, in line with the 19.7% expected for 2026. For 2028, the ratio should decrease to 18.3% and in 2029 to 17.7%. For local entities, the debt target will be 1.1% in 2027 and 2028, with a reduction to 1% in 2029.
Additionally, the Treasury has reported that the expenditure rule is set at 4% in 2027, at 3.8% in 2028, and at 3.6% in 2029.
Record Spending Cap
Alongside the stability objectives, although without being submitted to parliamentary vote, is the non-financial spending limit, known as 'spending cap', which for 2027 is set at 226.032 billion euros, the highest figure to date and 6.6% higher than that of 2026.
The 'national' spending cap will grow by 14.006 billion compared to that approved for 2026, while, if compared to the non-financial spending limit that included European funds, the increase will be 9.855 billion (+4.6%). It is worth remembering that the end of the application of the Recovery, Transformation and Resilience Plan (PRTR) on August 31 means that MRR resources cannot be used beyond that date.