Prime Minister Pedro Sánchez said on Thursday that Spain will postpone unveiling its annual budget as the government prepares a set of emergency measures to address the economic fallout from the Iran war.
The package, expected to be announced on Friday, will aim to soften the impact of surging fuel and electricity costs following the closure of the Strait of Hormuz. Gas prices have jumped by more than 60% since the United States and Israel began strikes on Iran on 28th February.
“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),” the PM told reporters in Brussels ahead of a European Union summit focused on finding ways to limit the impact of soaring energy prices.
He didn’t provide a revised timeline for the budget, Reuters reports.
Madrid had previously pledged to unveil the 2026 budget by the end of March, well beyond the usual deadline of three months before the close of the prior year.
The budget must gain parliamentary approval, where the Socialist-led coalition government lacks a clear majority and must navigate the competing demands of several smaller parties.
Sánchez has struggled to secure enough votes to pass a budget since 2023, leading him to extend it twice.
In November, the government’s effort to increase the spending ceiling was rejected in the lower house, facing opposition from the conservative People's Party, the hard-right Vox, and the hard-left Podemos, deepening the legislative deadlock.
Approximately €103 billion in EU pandemic recovery funds have enabled the government to continue funding new investments, although the European Commission’s final payment deadline is set for 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,” said Budget Minister Maria Jesus Montero on Thursday, going on to express her confidence that a new budget would be approved before the EU funds are fully depleted.