Spain will enter 2026 without a new budget for the third consecutive year after lawmakers once again blocked the minority left-wing government’s spending and deficit plans on Thursday.
Since its formation in 2023, Socialist Prime Minister Pedro Sánchez’s coalition has been unable to pass a budget through the hung parliament, limiting its ability to launch new spending initiatives.
It is the second time in two weeks that lawmakers have rejected the government’s proposed spending ceiling and deficit-reduction timetable for 2026–2028. Approval of the ceiling is a key first step toward submitting a new budget and replacing the 2023 accounts, which have been automatically extended.
The proposed 2026 spending ceiling would have set expenditures at 212 billion euros–an 8.5% increase over the current framework–while forecasting a public deficit of 2.1% of annual economic output next year.
As expected, the main opposition conservative Popular Party joined forces with the right-wing Vox and the Catalan separatist Junts to oppose the plan.