The Government starts 2025 with the challenge of carrying out new General State Budgets after twice extending those drawn up before the last elections. The Ministry of Finance began working on these Accounts in the middle of last year, but this forecast was not enough to comply with the constitutional mandate and present the project in the Lower House in the month of September. Which has been a challenge for the autonomous communities, which for the second consecutive year have been forced to prepare their budgets blindly, due to the uncertainty about what the deficit targets will ultimately be of administrations this 2025.
The reason is that the Executive has not managed to overcome the step prior to the State Budget, the support of parliamentarians for the fiscal path that established the deficit, debt and spending rule objectives for the years 2025, 2026 and 2027. The Council of Ministers approved the stability path twicethis was knocked down in a first vote in July by the votes against Junts, PP and Vox and the Government withdrew it before it was rejected for the second time in the month of September. The territories, mostly governed by the PP, took advantage of these new objectives to prepare their accounts, but there is a possibility that they will decline, since the path vote is still pending without a new date having been stipulated to include it in the debate, according to government sources.
A total of eleven regional governments had approved their Budgets under this criterion at the end of December, according to the report prepared by María Jesús Montero’s portfolio. Andalusia, Asturias, Canary Islands, Cantabria, Castilla-La Mancha, Extremadura, Galicia, Madrid, Navarra, Basque Country and La Rioja They were tied to the 0.1% deficit included in the new path and that is much less demanding than the 0.1% surplus that the previous path stipulated. While the rest work with extended budgets, despite the fact that some regions such as Castilla y León have approved the spending ceiling, despite the break with Vox that has conditioned other accounts such as those of the Balearic Islands or Murcia. Aragon, Catalonia and the Valencian Community also have pending approval of the Budget for this year.
Deficit-focused negotiation
This margin of deficit of the autonomous communities is going to be at the center of the negotiations between the Treasury and the rest of the parliamentary groups on the General State Budgets, since both the Catalan parties and the PP want to raise the limit. The path approved by the Government set a target for the regions of 0.1% for each of these three years and budget balance as a goal for local entities. This was a relief compared to the previous one, which set a surplus of 0.1% for the autonomous communities for both 2025 and 2026 and a saving of 0.1% and 0.2%, respectively, for the town councils. However, Junts has already conditioned its support for the fiscal path on this margin being extended to a deficit of 0.8% for Catalonia, which would amount to 13,000 million euros compared to the 1,626 million in the Treasury proposal, since They considered it unfair that a looser path was reserved for the State with goals of the 2.2%, 1.8% and 1.5% until 2027.
Predictably, this debate will also intersect with the reform of the regional financing system for which Moncloa plans to convene the different regional presidents this month, as well as the forgiveness of the debt of the Regional Liquidity Fund agreed with ERC and which they are trying to extend to the rest of the territories, which will complicate the dialogue. However, the deficit is not the only condition raised by Junts that urges compliance with all the commitments made by Sánchez for his investiture, with the amnesty as a central point. The session period in both parliamentary chambers does not begin until February, although a session will be called to vote on the royal decree-laws approved in the last Council of Ministers.
However, the Government wants to use this period to start formal talks on the Budget. Sumar presented its proposal for the 2025 Accounts in September, with the aim of closing a common position with the PSOE and then negotiating with the rest of the partners. The coalition reached an agreement in November and laid the foundations for a tax reform that has finally left out most of the measures proposed by Yolanda Díaz’s group, such as the tax on luxury goods or the tax burden on socimis. Although this pact was called to relaunch the negotiation for the Budgets, it seems that the socialists, who are in control of the Treasury, will once again lead the conversations with the rest of the political groups.
Moncloa’s efforts will focus on bring positions closer to those of Carles Puigdemontalthough Ione Belarra’s group has also threatened to hinder its processing if they do not lower the rent and break relations with Israel. While a new political agreement is forged, the Government will have to operate with the extended budgets and reallocate items from the initial project. Something that officials like Carlos Body take away and focus on establishing that they will make an effort to approve them.
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