At an extraordinary cabinet meeting on Monday, Spain's government extended its economic support package for households and sectors exposed to energy market volatility, while formally launching work on the General State Budget for 2027. The new decree replaces the previous package, which was due to expire on 30 June, and maintains protections for workers and industries particularly vulnerable to geopolitical tensions in the Middle East.
Minister for Economy, Trade and Enterprise, Carlos Cuerpo, defended the extension, stating that "we cannot let our guard down" as the economy continues to operate in a context of "high geopolitical uncertainty." He argued that the government will continue to support the most exposed sectors for as long as the risks stemming from the international situation persist.
Among the measures that remain in place are subsidies of 20 cents per litre of fuel for hauliers, farmers, and livestock breeders, as well as various incentives linked to electrification and the roll-out of renewable energy. The final scope of the decree will be detailed by the government after the cabinet meeting.
The approval coincides with the publication of the flash inflation figure for June by the National Statistics Institute (INE), which puts the annual rate at 3.2%, the same level as in the previous two months. The government maintains that the measures adopted since March have helped to contain price rises, although several analysts warn that how the conflict in the Middle East evolves will continue to shape energy costs over the coming months. This comes amid broader European concerns about energy security, as highlighted by Greenpeace's criticism of the EU's energy strategy.
Housing and Roadmap for the 2027 Budget
In addition to extending the so-called "anti-crisis shield," the government announced a fresh push on its housing policy. Minister for Inclusion, Social Security and Migration and government spokesperson, Elma Saiz, said the government plans to approve in July a package of measures with which it hopes to secure a "broad agreement" in parliament. She explained that the initiative will include measures to regulate seasonal rentals, offer tax incentives to landlords who lower rents, and raise VAT on tourist accommodation to 21%, among other proposals aimed at easing access to housing.
These initiatives add to the 2026–2030 State Housing Plan, approved by the government last April and endowed with total investment of 7 billion euros, 60% of which will be contributed by the state and 40% by the regional governments. The programme aims, among other goals, to expand the stock of public housing, step up renovation, and permanently protect subsidised housing built with public funding. Spain's housing crisis mirrors trends across the continent, with cities like Lisbon, Prague, and Paris leading Europe's worst housing affordability crisis.
Housing policy, however, remains a source of political confrontation. The regional government of Andalusia has launched a competence dispute on the grounds that some aspects of the state plan encroach on regional powers, an accusation the Housing Ministry rejects.
The update of the macroeconomic framework is the first formal step towards drafting the 2027 General State Budget. The government believes that these new projections will serve as the basis for designing next year's public accounts, before approving the spending ceiling and the fiscal stability targets and sending the budget bill to parliament, probably after the summer. The government has reiterated its intention to present a new budget for 2027, after several years of extended budgets, although its approval will depend on securing a sufficient parliamentary majority as the bill passes through Congress.
