Congress Rejects Government’s Deficit Path, Blocking First Step Toward Budgets

Overview

• The Congress of Deputies again voted down the government’s senda de estabilidad, a formal plan that sets deficit targets and is the required first step to draft new state budgets.
• On Tuesday, July 14, PP, Vox, Junts and UPN voted ‘no’ while Podemos and Compromís abstained and the PNV gave conditional support, leaving the proposal short of approval and forcing a second vote on July 23.
• Junts has now joined the right‑wing blocs to reject the senda for the third consecutive year, arguing the plan shortchanges Catalonia and citing low regional budget execution.
• Despite the defeat on fiscal rules, the Congress approved major reforms to the Dependency and Disability laws to send to the Senate, and in Valencia the PP accepted Vox amendments to add a 'priority nacional' residency test to regional social benefits.
• The rejection means the Government must either resubmit modified targets or prepare budgets constrained by the existing fiscal ceiling, a situation that analysts say heightens the risk of failed budgets and, based on past precedent in 1996 and 2019, could lead the prime minister to call early elections.