Bill would let a caretaker government set deficit targets

Automatic summary, not yet reviewed

1. The bill would add a seventh additional provision to Organic Laworganic law A law on fundamental rights, the electoral system or other matters the Constitution reserves. It needs an absolute majority in the Congreso: 176 votes. 2/2012 so that a caretaker government can revise budget stability and public debt targets when required by a European Union decision.
2. In that case, the caretaker government's agreement would not include the non-financial spending ceiling of the State Budget, because a caretaker government cannot approve a draft State Budget law.
3. The preamble explains the reason: the Council of the European Union revised the deficit targets for 2016, 2017 and 2018 in August 2016, and the Spanish targets needed to be adjusted to that new decision.
4. It would amend the fifth additional provision of the Corporate Income Taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. Law to adjust how the Canary Islands special economic regime and the Ceuta and Melilla allowance affect installment tax payments, effective for tax periods starting January 1, 2016.
5. It would authorize ADIF and SEPES to formalize guarantees through letters of conformity or sponsorship in favor of Bilbao Ría 2000, and to take on multi-year commitments and contributions to that entity. It would also allow the Government to authorize similar guarantees for Renfe Operadora, ADIF Alta Velocidad and ADIF.
6. The first two final provisions would be passed as ordinary law, not as an organic law.
7. The rule would enter into force on the same day it is published in the Official State Gazette.
8. Many amendments were filed during the process, such as letting the Cortes propose and approve the targets if they reject the Government's, distributing the deficit according to each administration's spending, or deleting the spending rule, but the approved text is limited to the points above.

Who it affects

• The Government and the parties represented in the Congress of Deputies (Congreso de los Diputados).: A caretaker government could set deficit and debt targets without including the State Budget spending ceiling.
• Companies paying Corporate Income Tax that operate in the Canary Islands, Ceuta or Melilla.: The rules for calculating their installment tax payments change.
• ADIF, SEPES, Renfe Operadora, ADIF Alta Velocidad and Bilbao Ría 2000.: They are authorized to sign guarantees and financial commitments with banks.
• The general public.: Public administrations' deficit and debt targets can be revised even without a full government.

Words worth knowing

Gobierno en funciones (caretaker government)

A government that stays in office on a limited basis after elections, until a new one is formed.

Estabilidad presupuestaria (budget stability)

A rule limiting how much public administrations can overspend, that is, how much deficit they can run.

Límite de gasto no financiero (non-financial spending ceiling)

The maximum spending cap the State sets when preparing its Budget.

Cartas de conformidad o de patrocinio (comfort letters)

Documents with which a public entity backs a credit transaction requested by another company.

Pagos fraccionados (installment payments)

Advance payments of Corporate Income Tax that companies make during the year.

organic law

A law on fundamental rights, the electoral system or other matters the Constitution reserves. It needs an absolute majority in the Congreso: 176 votes.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the text passed by the full Congreso. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries