Pedro Sánchez closed last July this “hazardous” political course immersed, as always, in the accelerated management of an endless succession of unforeseen crises, from the new wave of summer fires to the migratory avalanche that Ceuta suffered, with diplomatic consequences for Spain, while judicial and police investigations continue to hover around his political and family environment. The President of the Government has faced during the August holiday break a bulky portfolio full of pending tasks for September.
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The president has committed to presenting the budgets this September
And the pending ones are not easy subjects – simple – but real bones very difficult to digest. The outcome of all these exams will also largely determine the course and duration of the remainder of the term. “There is one year left to complete this legislature,” Sánchez assured in his political course balance from Moncloa, insisting on exhausting it until the last breath, in July 2027. Unless the script changes.
On the 4th the Fiscal and Financial Policy Council meets with the financing model up for debate
The budget challenge. In the previous legislature, which was no bed of roses either, because among other crises the pandemic and the war in Ukraine broke out, Sánchez managed to chain the approval of up to three consecutive general budgets. The current mandate, however, remains blank. The budget extensions since 2023 were nevertheless offset by the arrival of the huge European recovery funds – which, with the sixth disbursement, already total about 100 billion euros – which will culminate next December.
Allies are waiting, with Carles Puigdemont’s amnesty as a crucial milestone
The President of the Government is determined, this time indeed, to present the first public accounts project of the legislature. “Our intention is to present the budgets, and our will is to approve them,” Sánchez assured. The Council of Ministers approved before summer a record spending ceiling for these 2027 budgets: up to 226.032 billion euros. Quite a treat, in principle, to attract support in negotiations with parliamentary groups. But, for now, the PP, Vox, and Junts twice rejected the debt and deficit targets and maintain a no block to the accounts that is currently insurmountable for the Government. Sánchez assured he will present the budget project in September, but did not want to commit to a specific date. “We still have no date,” they confirm at Moncloa. The president himself, however, admitted that if these public accounts do not finally pass the overall debate in Congress – presumably around October or November – it will be time to “make decisions” about calling elections.
The financing sudoku. Another tough nut to crack, despite the fact that the new autonomous financing model would inject an additional 21 billion to the common regime communities. The Ministry of Finance convened on July 29 the meeting of the Fiscal and Financial Policy Council (CPFF) to approve the new autonomous financing system agreed with Catalonia, which all PP communities oppose, but also the affected PSOE ones, that is, Castilla-La Mancha and Asturias. And, two days before the meeting, a surprise arose, because the Canarian Government of Fernando Clavijo jumped on board, after a prior negotiation with the Government that would bring another 1.337 billion euros extra to its territory. The eleven autonomies governed by the PP – also a government partner of Coalición Canaria in the archipelago – asked to postpone the CPFF meeting, and the Minister of Finance, Arcadi España, granted it. The new meeting is scheduled for next September 4. The approval of the new model is guaranteed in the fiscal forum, but it requires an absolute majority for this complex sudoku to get the green light from Congress, like the reform of the organic law on Financing of the Autonomous Communities. The affirmative vote of the seven Junts deputies, as in the budgets, is again essential.
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The housing crisis. Sánchez had foreseen an end of the course that would demonstrate that, as he defends, “the Government works.” Thus, it was announced that the last Council of Ministers meeting of the season, last July 28, would finally approve a new decree law with a wide range of initiatives to address the housing crisis, which is the main problem for citizens, according to all surveys. PSOE and Sumar did their homework and sealed an agreement within the government coalition that included an extension of rent prices, but also tax incentives for owners and a reform of the Land Law. Negotiations with the rest of the investiture majority groups accelerated – despite the extreme difficulty of aligning the opposing positions and demands of Junts and Podemos – but the weekend before the Council of Ministers the Executive negotiators warned that there were possibilities of agreement… although it still needed more work. Time was needed, given the complexity of the endeavor, as demanded by the Minister of Housing, Isabel Rodríguez. And the Executive resigned and also decided to leave this subject pending for September, trusting to resolve the cross vetoes between the investiture groups that would then have to validate the decree law in Congress. The first Council of Ministers meeting of the new course is scheduled for next August 25. Although Sánchez also did not want to commit to a specific date: “Housing is our priority, and the urgent thing is to approve and agree on it.”
Puigdemont’s amnesty. The President of the Government celebrated the endorsement that the Court of Justice of the European Union (CJEU) granted before summer to the Amnesty law, to overcome the political conflict and guarantee “reconciliation” in Catalonia. And just the last Council of Ministers of the course approved a partial pardon for Laura Borràs that will prevent the former president of the Parliament and Junts from going to prison. Sánchez argued that the only thing the Government did was to comply with the sentence of the High Court of Justice of Catalonia (TSJC) that condemned Borràs, without any political intent. But everything helps in the Government’s purpose of trying to mend the broken plates with Junts to be able to exhaust the legislature, especially when the amnesty also reaches Carles Puigdemont and the former president of the Generalitat can return to Catalonia. It is the famous “window of opportunity” that the Executive has been waiting for months. “Things can change,” they trust at Moncloa. And they insist that they even see it possible to approve the new budgets for 2027.
The disputed time registration. As much as the second vice president, Yolanda Díaz, insisted that the new labor time registration see the light in the Council of Ministers before the end of July, this alternative initiative of the also Minister of Labor – as a reaction to the rejection of her flagship project of reducing the working day, knocked down by Junts – also remained pending for September. An extra time margin that will determine if Díaz and the first vice president and Minister of Economy, Carlos Cuerpo, smooth out the rough edges that have so far blocked the project. The advantage is that it can be approved as a decree only by the Government, which does not require subsequent validation by Congress.
The PNV, waiting. Not everything is Junts: Sánchez also needs the PNV to keep the legislature afloat. The commitment with the lehendakari, Imanol Pradales, was to hold the bilateral commission with Euskadi “before August,” to settle pending transfers, and particularly the management of the Social Security economic regime. But there are resistances, and both parties agreed to hold the meeting after the summer period.
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