MADRID, March 19 (Reuters) – Spain will delay the presentation of its annual budget, Prime Minister Pedro Sanchez said on Thursday, as the cabinet puts together a package of emergency measures to counter the economic impact of the Iran war.
These measures – due to be announced on Friday – will focus on cushioning the blow from rising fuel and electricity prices caused by the closure of the Strait of Hormuz. Gas prices have risen by more than 60% since the U.S. and Israel started attacking Iran on February 28.
“We’re working on the budget, but nobody predicted this war. The government needs to work on the most urgent matter – and the urgent matter now is this (the war’s impact),” Sanchez told reporters in Brussels ahead of an EU summit dedicated to seeking ways to curb the impact of the energy price spike.
He did not specify a new deadline for the budget.
Madrid had earlier committed to presenting the 2026 budget by the end of March, long past the usual deadline of three months before the end of the previous year.
The plan needs to be approved in parliament, where the Socialist-led coalition government lacks a clear majority and depends on balancing the competing demands of several smaller parties.
Sanchez has been unable to muster enough votes to pass a budget since 2023, forcing him to roll it over twice.
In November, the government’s attempt to raise the spending ceiling failed in the lower house as it was opposed by the conservative People’s Party, hard-right Vox and hard-left Podemos, further cementing the gridlock.
Roughly 103 billion euros ($118 billion) in EU pandemic recovery funds have allowed the government to keep financing new investment – but the final deadline for payments from the European Commission is the end of this year.
“Prorogued budgets have not been a problem when it comes to handling all the issues we’ve had on the table,” Budget Minister Maria Jesus Montero said on Thursday, adding she was certain a new budget would be in place before the EU funds ran out.
($1 = 0.8715 euros)
(Reporting by Victoria Waldersee, Emma PinedoEditing by Gareth Jones)
Comments