Spanish Congress rejects deficit path, casting doubt on 2027 budget

The Spanish Congress has rejected the government's deficit path for 2027-2029, with 178 votes against and 167 in favor, blocking a key step toward the 2027 budget. The proposal, backed by the government but opposed by PP, Vox, Junts, and UPN, would have set deficit targets of 1.8% of GDP in 2027, 1.6% in 2028, and 1.5% in 2029 Source: ABC. The government now has one month to resubmit the path; a second vote is scheduled for July 23 Source: La Vanguardia. If again rejected, the government's budget would be limited to the stricter targets agreed with Brussels, eliminating the additional €5.85 billion margin for autonomous communities Source: Infobae.

During the debate, PP accused the government of "theatrics" and called for early elections, while Vox labeled the government's data "false" Source: El Mundo. Junts' Josep Maria Cruset dismissed the proposal as "a pure marketing operation" and warned that the government "will not have budgets" Source: El Confidencial. Podemos abstained, criticizing increased military spending Source: El Español.

The rejection highlights the government's parliamentary weakness. With no budget passed in three years, the failure of the deficit path could trigger an early election if the 2027 budget is also denied Source: El Mundo. Meanwhile, the AIReF warns that spending growth may exceed EU limits, requiring €6 billion in adjustments from 2027 Source: El Confidencial.