Catalonia is facing a situation that could affect every resident in the region. If a budget for 2026 is not approved in the coming weeks, the autonomous community’s financial system will come under pressure starting in April. This means that regular payments and the funding of public programs could be at risk. According to El Pais, the Catalonian government (Generalitat) is preparing for challenging times if political disagreements are not resolved.
Negotiations and political risks
Catalonia’s Minister of Economy, Alícia Romero, stated she does not consider budget failure an option, but acknowledges that without agreement from the main political forces, especially the ERC party, the situation could spiral out of control. Authorities hope the negotiations will lead to a compromise and the budget will pass, but confidence in that outcome remains shaky. Should negotiations break down, the region risks losing €1.5 billion in spending—an amount comparable to the annual funding for the entire employment and entrepreneurship sector.
Romero stressed that the government will not allow delays in salaries or debt payments, but warned that without a new budget, many projects and initiatives will have to be abandoned. At present, Catalonia is operating under the extended parameters of the 2023 budget, and additional funds have not yet been allocated. This creates a risk that from April, some expenditures may have to be frozen to ensure payments to public sector workers.
Impact on public spending and taxes
The Catalan authorities note that without an approved budget, they will have to limit funding for many areas. Primarily, this concerns social programs, infrastructure projects, and business support. According to Romero, the government is ready to discuss terms with ERC, including the issue of transferring personal income tax (IRPF) management to the region. However, negotiations remain difficult, and the ERC party insists on guarantees regarding tax reform.
If the budget is not adopted, starting in April all departments will be instructed to reserve part of their funds exclusively for salary payments. This means that financing for new initiatives and even support for ongoing programs may be at risk. As El Pais reports, the government is preparing a budget project with a spending increase of 9.1 billion euros, aiming for a total of 50 billion, and with the entire sector included — 65 billion euros. However, without political consensus, these plans may remain on paper.
Situation in the context of Spain
The Catalan crisis is not unique to Spain. Other regions have also faced situations where lack of budget consensus led to spending freezes and the need for emergency measures. For example, recently the Spanish authorities had to mobilize all resources to support Andalusia after devastating natural disasters — read more about this in our piece on the mobilization of funds to deal with the aftermath in Andalusia. Such situations highlight the importance of timely financial decision-making and the need to avoid political deadlocks
Financial stability and new challenges
Amid uncertainty, the Catalan government is taking steps to strengthen its own tax service. In particular, a competition has been announced for 25 new inspector positions, which should improve tax collection efficiency. However, as acknowledged by the economic department, the region is not yet ready to take full control over IRPF collection—this will require more time and additional resources
In recent years, Spain has faced similar difficulties across various autonomous communities. Delays in approving budgets have led to cuts in investment, freezing of social programs, and mounting tension between central authorities and the regions. In 2023, similar issues arose in Valencia and Madrid, where political disagreements hindered the timely allocation of funds. Experts note that such situations negatively affect the economy and public trust in authorities, and may also lead to increased social tension
