The Ministry of Finance has convened the Fiscal and Financial Policy Council (CPFF), the body that brings together the Government and communities, for next Monday at noon. The objective of the department chaired by María Jesús Montero with the meeting is to make the autonomies aware of its proposal for the distribution of the deficit between the various public administrations. The appointment is one of the previous and essential steps before the Executive approves in the Council of Ministers the spending ceiling and the fiscal path, the two pillars on which the preparation of the 2026 General State Budgets is based.
With the announcement, the Treasury seeks to accelerate a budget process that is accumulating a palpable delay compared to the legal timetable. The Constitution requires that the budget project be presented by 1 October, but for the third consecutive year the Government does not respect the deadline and opens the door to a new possible extension of the 2023 accounts, the last to see the light.
The distribution of the deficit is a particularly sensitive issue for both the central executive and regional governments, most of which are in the hands of the PP. Every year the four subsectors that make up the Public Administration – Central Administration, Autonomous Communities, Local Authorities and Social Security – must respect fiscal limits which, together, make up the State deficit.
Last year, in the 2025-2027 path, the Treasury had proposed a distribution that granted the Central Administration an imbalance of 2.2%, 1.8% and 1.5% for each of the three years. Social Security has been assigned a deficit of 0.2% per year, while the autonomous communities could achieve one of 0.1%. To square the circle, local authorities should move towards balanced budgets or zero deficits. The goal was to reach joint red numbers of 2.5%, 2.1% and 1.8% of GDP respectively. The proposal then did not pass the vote in Congress, where PP, Vox and Junts formed a common front for different reasons.
On paper, the government has the upper hand in the CPFF, as the Treasury only needs a vote in favor of at least autonomy to move forward with its proposal. However, it is assumed that the meeting will be tense due to the predictable refusal of the PP municipalities and the precedent they set months ago, when they found themselves in front of Minister Montero in the last meeting, called to discuss the partial reduction of the regional debt.
(Breaking news. There will be an extension soon.)
