The fiscal path returns to Congress with few options to overcome the opposition's blockade: PP, Vox and Junts threaten to strike it down again

After the Congress rejected last week the budgetary stability path for the period 2027-2029 with the votes against of PP, Vox and Junts, the Lower House will again rule this Thursday on the Government's proposal. However, everything indicates that the result will be identical and that the Executive will again find a parliamentary majority contrary to its fiscal plans.

The repetition of the vote responds to a requirement included in the Budgetary Stability Law, which obliges to resubmit the objectives for consideration by Congress even if the text remains unchanged. However, it is not known what will happen if it again receives the opposition's refusal. However, last year, with a similar scenario, the Government chose to maintain as reference the fiscal commitments previously agreed with the European institutions, an interpretation supported by a report from the State Attorney's Office. Therefore, a new parliamentary rejection would not have immediate consequences on the preparation of public accounts.

In fact, the Executive will be able to continue with the preparation of the General State Budgets for 2027 once the summer ends, using as a framework the deficit target of 1.8% of GDP included in the medium-term fiscal plan committed to Brussels.

In addition to this vote, the plenary session of Congress will address the validation of two decree-laws approved by the Government. One of them prolongs several of the economic measures adopted to alleviate the effects derived from the crisis caused by the war between Iran, while the other modifies the conditions of partial retirement for public administration personnel.

The decree related to economic measures maintains the reduction of the hydrocarbon tax, although with a gradual decrease in tax benefits until October. It also retains the direct aid of 20 cents per liter of diesel fuel for farmers and transporters and incorporates an item of 165 million euros to support the acquisition of fertilizers. Likewise, it contemplates a progressive elimination of the tax applied to electricity production.

For its part, the rule on partial retirement will allow the temporary incorporation of relief workers to replace labor employees of administrations who access this retirement modality. Until now, this possibility was blocked because legislation required relief workers to be hired on an indefinite basis.