Sánchez abandons the deficit route, but saves social measures in the last plenary session in Congress

MadridThe Spanish government has held its last plenary session of the year in Congress –The first one with José Luis Ábalos suspended as a deputyBittersweet, but without major surprises. On the one hand, the government again lost the vote on the stability plan (deficit and debt targets), something that was already expected. But on the other hand, it managed to pass a series of social measures: aid for those affected by the La Palma volcano, the increase in civil servants' salaries, and the processing of the reform of the law on the rights of people with disabilities and the reform of the dependency law. Added to this are the so-called Junts decrees, with the demands of Carles Puigdemont's party, which the PSOE unblocked in an attempt to rebuild the relationship, and which also passed. The Spanish government is viewing the plenary session's outcome with enthusiasm: "There's a lot of noise, but we managed to pass the votes," government sources say. However, Pedro Sánchez opted for remote voting this Thursday and did not attend what was the last session of 2025 in Congress. where the topic of conversation has been the latest arrests due to suspicions of corruption surrounding the Spanish government and the PSOE (Spanish Socialist Workers' Party)..

Green light for general budgets

We're making progress step by step. Although Congress has rejected the deficit and debt targets (via the stability mechanism) for the second time due to votes against them from the PP, Vox, Junts, and UPN parties, once this hurdle is cleared, the Ministry of Finance now has the green light to present the General State Budget (PGE) for 2026, as Pedro Sánchez has promised. taking into account the breakage With Carles Puigdemont's party and their threat to refuse to negotiate: "Neither deficit targets today, nor a state budget tomorrow," warned Junts MP Josep Maria Cruset from the Congress podium this Thursday. Be that as it may, Finance Minister María Jesús Montero intends to present the General State Budget next February.

By law, the Spanish government must approve this stability measure before presenting new public accounts and has up to two attempts to receive congressional approval. The first attempt was lost on November 27, when these parties voted against it. The second attempt was this Thursday, with the same result. But now that this measure has been definitively abandoned, the Treasury simply needs to adhere to the current deficit and debt targets—in this case, those of the latest structural fiscal plan sent to Brussels—and can move forward with drafting the General State Budget. The key is that these targets no longer need to be voted on in Congress.

What changes?

Beyond the rift between Junts and the PSOE—which the former is demonstrating by blocking all legislation not negotiated with them—and although the Socialists have attempted to mend fences in recent days, the reason Carles Puigdemont's party has rejected the stability path is because they consider the proposed deficit target for 2026-2028 insufficient: a deficit of 0.1% of GDP. The People's Party (PP) uses the same argument. If the deficit target of the latest structural fiscal plan submitted to Brussels is adopted, the autonomous communities will have to close 2026 with a deficit of 0% of GDP, that is, with a balanced budget, or at least that is how the Treasury interprets it. However, it is important to note that the new European fiscal rules are putting the spending rule under scrutiny.

The "Together Decree"

Congress also gave the green light to the "Together decrees" that included demands from Carles Puigdemont's party. This approved the extension of the implementation of Verifactu, the new invoicing system for SMEs and the self-employed. which the Treasury has now postponed until January 1, 2027 instead of next yearAs initially planned, this last-minute decision has caused headaches for businesses and the self-employed. While some have welcomed it—employers' associations have stated that not everyone had been able to adapt and were also calling for a postponement of its implementation—others have complained because they had already absorbed the cost of the new invoicing model by updating their software. In this regard, ERC has announced that it voted in favor after reaching an agreement with the Spanish government on a reform of the Budgetary Stability and Financial Sustainability Law so that "municipalities with savings can use the surplus for social policies." According to the Republicans, "the processing timeline for this new initiative will begin in February 2026 and conclude within the same parliamentary session."

The authorization for municipalities, other local entities, and autonomous communities to spend the 2024 surplus on "financially sustainable investments" has also been approved, as well as the transfer to the Generalitat (Catalan government) of the management of public employment offers and the selection processes for local officials with national certification, such as secretaries and auditors.

Other votes

But the socioeconomic votes in Congress this Thursday didn't end there. The Spanish lower house approved aid for those affected by the La Palma volcano, but also in the increase of public sector salaries by 11% during the period 2025-2028In this case, the Spanish government secured the votes of the PP and its other usual partners, while Junts abstained and Vox voted against. Furthermore, Congress rejected most of the amendments to the Customer Service Law that the PP introduced in the Senate, where it holds an absolute majority, so the legislation will now be sent to the lower house. Official State Gazette for publication. The latest test for Pedro Sánchez has been the start of the processing of the reform of the law on the Rights of Persons with Disabilities and the reform of the Dependency Law, around which Junts and the PNV had presented amendments in their entirety and which have finally declined.