Spain still runs on 2023 budget as Sánchez breaks unwanted fiscal record
Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
Spain enters the summer recess without a 2026 budget, and no clear path to one, for the third year in a row, as domestic troubles for Prime Minister Pedro Sánchez continue to pile up.
Before packing his bag for his retreat in the Canary Islands, Sánchez promised that his government would submit the 2026 budget proposal.
But Finance Minister María Jesús Montero walked back expectations last week, saying a draft would only be tabled if there were 'prior political consensus," which no one in Madrid is currently betting on.
That means Spain is on course to miss its budget deadline for the third year in a row, this time because Catalan pro-independence parties and the far-left Podemos are threatening to block the plan before it even reaches parliament. The ordinary budget process normally begins in mid-June. The 'new' normal Spain has never missed two consecutive budget presentations since the restoration of democracy in 1975. Now, Sánchez will go down in history for missing it three times.
Faced with another year of deadlock, Sánchez has leaned heavily on the 2023 spending plan – the largest in history – rolling it over again and again to keep the state running.
In 2024, he bypassed the budget process, citing the Catalan regional elections, while in 2025, his government took a more forthright approach, arguing it would not even 'waste time' on a doomed budget.
For now, Sánchez insists that Spain can function under the 2023 budget due to its generous scope. But José E. Boscá, economics professor and researcher at Fedea, called the situation 'highly unusual.'
Without updated fiscal projections, he said, the state must resort to 'extraordinary mechanisms,' which lead to inefficiencies, policy delays, and underfunding of regions and municipalities.
Centre-right opposition Popular Party has also accused the government of mismanagement and repeatedly demanded that Sánchez call elections to overcome Madrid's parliamentary deadlock.
'How can a country function with a budget that is three years out of date?' asked a PP party spokesperson. 'Regional governments don't even know how much money they'll receive.' A high-cost budget The delay reflects deeper political fractures. Sánchez's minority government depends on Catalan pro-independence parties and far-left Podemos, whose support remains more than uncertain.
'There will be no budgets in Catalonia and Spain until the government fulfils its commitments regarding tax collection, personal income tax, and the financing model," left-wing ERC president Oriol Junqueras warned the press last month.
Right-wing separatist party Junts, meanwhile, is calling for payment of a supposed €50 billion debt to the region, full implementation of the controversial amnesty law, and Catalan's inclusion in the EU's list of official languages.
Neither party responded to Euractiv's request for comment.
Meanwhile, Podemos has repeatedly warned Sánchez that increasing defence spending in the 2026 budget is a red line the party is not willing to cross.
Ironically, Sánchez, as opposition leader, once demanded the resignation of then-Prime Minister Mariano Rajoy for failing to present a budget. 'Without a budget, you can't govern,' he said then.
With the opposition now calling for his head for failing to present a budget for the third consecutive year, it seems that Sánchez has come full circle.
(cs, mm) Euractiv is part of the Trust Project
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