The Government says that the PP cannot block the spending ceiling in the Senate, but only the distribution of the deficit

He is confident of being able to draw up the 2024 Budgets in the first quarter, despite the absolute majority of the PP in the Upper House

MADRID, 26 Nov. (EUROPA PRESS) -

The new Government of Pedro Sánchez will be able to carry out new General State Budgets (PGE) for the year 2024, despite the majority of the PP in the Senate, since the 'popular' can only veto the distribution of the deficit in the Upper House by administrations, but not what is known as the spending ceiling, as Executive sources have assured Europa Press.

In accordance with the Budget Stability Law, the Government must send to the Cortes the non-financial spending limit for next year, known as the spending ceiling, the first step in preparing the new accounts, as well as the stability objectives. (deficit distribution) of all public administrations, Central, communities, Social Security and town councils, following a report from the Fiscal and Financial Policy Council (CPFF).

Government sources have told Europa Press that both the Congress and the Senate must approve the distribution of the deficit by administrations, but not the spending ceiling, which only the Executive must report on.

Thus, the agreement on the limit of non-financial spending, as well as the distribution of the debt and deficit objectives, in relation to GDP, of the central, regional and municipal administrations will be the first challenge of the fourth vice president and minister of Treasury and Public Function, María Jesús Montero. As a preliminary step, this week the Council of Ministers approved the ministerial order that begins the preparation of the Budgets.

Once the spending ceiling is approved by the Executive, the Cortes Generales will rule approving or rejecting the objectives proposed by the Government and which on this occasion must be aligned with European fiscal standards, after years suspended due to the pandemic. "If the Congress of Deputies or the Senate reject the objectives, the Government, within a maximum period of one month, will submit a new agreement that will be subject to the same procedure," reads the Budget Stability Law.

With the new political scenario, it is expected that the PP will use its majority in the Senate to counterbalance the Government in the budget process, rejecting the deficit and debt objectives - not the spending ceiling, which is not voted on - .

But even if PSOE and Sumar could not push these objectives forward in the Cortes, this would not block the presentation of next year's General Budget project, as has happened on other occasions.

The last time this happened was in 2018, when the PP rejected in the Upper House the spending ceiling of the Government of Pedro Sánchez for the year 2019. That time, the Government decided to use the previous deficit and debt reference to present the budget project, which was finally rejected by Congress - the Senate does not have the power to veto the project.

Now, however, the scenario is more uncertain since, with European fiscal rules suspended since 2020, there are no such fixed objectives for recent past years, but rather indicative references.

Thus, the forecast of the fourth vice president of the Government and Minister of Finance and Public Function, María Jesús Montero, is to have the General State Budgets (PGE) approved for 2024 throughout the first quarter of the year with the support of the partners of the PSOE in Congress, since their support for public accounts "was part of the conversations" of the investiture pacts.

The PSOE already tried in 2018 to introduce a legal reform to circumvent a PP veto in the Senate, so if it was only the Upper House that rejected the Government's budgetary objectives, it would be enough for it to return to Congress in order to approve the ceiling. spending with a simple majority, that is, with more votes in favor than against.

It was an amendment to the Budget Stability Law that the socialists wanted to introduce to a bill to reform the Organic Law of the Judiciary, on urgent measures in application of the State Pact on gender violence.

"If the budget stability and public debt objectives are approved by Congress, they are rejected by the Senate, said objectives will be submitted to a new vote in Congress, being approved if it ratifies them by a simple majority," read the amendment of the PSOE, which was never introduced into the aforementioned law.

From the PP they have already warned that the party will resort to national and European bodies if the Government ends up carrying out a reform of the Budget Law to circumvent the irrevocable veto capacity that the Senate has over the objectives of stability and public debt, prologue of the preparation of the General State Budgets (PGE).

Looking ahead to the next financial year, the acting Government sent the 2024 budget plan to Brussels in October, which included a deficit forecast of around 3% for next year and a public debt ratio below 110% of GDP. already for 2023.

The plan contemplated a more flexible deficit for the autonomous communities in 2024, with a rate of 0.1%, compared to the budget balance included in the Stability Program last April. That tenth of more margin for the autonomous communities will be assumed by the Central Administration, whose deficit in 2024 will be 2.9%, compared to 3% in the previous forecast.

For its part, Social Security maintains the planned deficit at 0.2% for 2024, as it appeared in the Stability Program. For local entities, the projection of a surplus of 0.2% for next year is also maintained.

Just this week, the European Commission gave its approval to Spain's budget project, but urged the new Government to present an updated plan "as soon as possible", since the current one was submitted in October by the acting Executive -- such as the case of Slovakia, Luxembourg and the Netherlands--, while warning that the country will face a "very difficult" fiscal situation in 2024 with a deficit above the 3% limit and a "quite high" debt.