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At its meeting on Monday, the Council of Ministers approved a new package of measures to mitigate the economic impact of the international crisis, while formally launching work on the General State Budget for 2027 by updating the macroeconomic framework. The meeting was also used to reinforce the government’s strategy on housing, one of the political priorities of the current legislature.
The new decree replaces the previous package of measures, which was due to expire on 30 June. As the prime minister had already signalled, the aim is to maintain protection for families, workers and economic sectors that are particularly exposed to the volatility of energy markets arising from the geopolitical situation in the Middle East.
The Minister for Economy, Trade and Enterprise, Carlos Cuerpo, defended the extension, arguing that “we cannot let our guard down”, as the economy is still operating in a context of “heightened geopolitical uncertainty”. He said the government would maintain support for 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 precise scope of the decree will be set out by the government after the Council of Ministers meeting.
The approval coincides with the publication of the flash estimate of June inflation (source in Spanish) 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 argues that the measures adopted since March have helped to contain price growth, although various analysts warn that how the conflict in the Middle East evolves will continue to shape energy costs over the coming months.
Housing and roadmap for the 2027 Budget
Alongside the extension of the so-called “anti-crisis shield”, the government announced a fresh push on its housing policy.
The Minister for Inclusion, Social Security and Migration and government spokesperson, Elma Saiz, said the executive 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 short-term 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 come on top of the 2026–2030 National Housing Plan, approved by the government last April and endowed with total investment of 7 billion euros, 60% of which will be provided by the state and 40% by the autonomous communities. The programme aims, among other objectives, to expand the public housing stock, step up renovation and ensure that social housing built with public funding remains permanently protected.
Housing policy, however, remains a source of political confrontation. The Andalusian regional government has launched a dispute over competences, arguing that some aspects of the national plan encroach on devolved powers, an accusation the Housing Ministry rejects.
The updating of the macroeconomic framework is the first formal step in drawing up the 2027 General State Budget. The government believes these new forecasts will serve as the basis for designing next year’s public accounts, before approving the spending ceiling and the budgetary stability targets and sending the draft bill to parliament, probably after the summer.
The government has reiterated its intention to present a new set of public accounts for 2027, after several years of extended budgets, although their approval will depend on securing a sufficient parliamentary majority during their passage through Congress.