Spanish Lawmakers Reject Fiscal Targets in Surprise Sanchez Loss
(Bloomberg) -- Spanish lawmakers on Tuesday rejected the government’s fiscal targets, in a surprise loss for Prime Minister Pedro Sanchez that signals the struggle he’ll face to pass a budget for next year.
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The targets, which establish spending and debt ratios, were rejected by 178 lawmakers with 171 in favor in the Parliament in Madrid. The seven representatives for Catalan separatist party Junts waited until shortly before the vote to announce that they would reject it.
Approving the fiscal targets is a mandatory step in Spain before the government can present a budget, which it has said it wants to do in the autumn. The Euro zone’s fourth-largest economy is currently already operating with a budget rolled over from last year, after Sanchez chose not to seek one to avoid risking a defeat in the fragmented Parliament.
The country has operated without a budget for several years at a time in the past, but the government has stressed that it wants to avoid doing so beyond 2024. Spain and other countries in the European Union are readying for the reintroduction next year of fiscal rules that were suspended during the pandemic.
The separatists of Junts are the king-maker in the Parliament since last year, when an inconclusive election left Sanchez leading a minority coalition government. The Catalan group has said that it will only back policies in exchange for clear benefits for the region.
Sanchez’s government must now present targets again to unlock budget negotiations. It can insist upon the current targets or come up with new ones.
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