By: Sebastian Mariz, Owner and Managing Director of InFluenze Spain.
.
November of 2025 marked the zenith of the third Mr. Pedro Sánchez legislature, with the Prime Minister and his cabinet immersed in multiple corruption scandals, relations strained with his communist, Catalan and Basque parliamentary partners and the opposition calling insistently for his resignation and new general elections.
While it is impossible to predict how the second half of the legislature will unravel and when the next general elections will take place in Spain, certain recent developments provide some good indicators on when this might be.
On the 17th of December, 2025, the European Commission accepted the Government’s new, and last, addendum to the Spanish Recovery and Resilience Plan, opening the door to the final tranche of EU Recovery and Resilience Funds transferred to Spain.
The additional 33 billion euros, will allow Sánchez to continue operating despite not being able to adopt a new national budget. Sánchez has been able to operate without adopting a new national budget by rolling over the 2022 budget and avoiding what would be perceived as a vote of no-confidence, if his budget were rejected in Parliament and the Senate.
The European Commission has until the end of the year to transfer these funds to the Spanish treasury.
In order to achieve this crucial milestone for the survival of his Government and the continuity of this legislature, Sánchez was forced to present a highly watered-down addendum, setting out the limited political and legislative priorities and agenda for the next 12 months. The addendum was required to pave the way for payment from Brussels.
The contents of the addendum were, in turn, largely set out by the PM’s parliamentary coalition partners, and in particular the Catalan conservative and nationalist party, who announced in December that it would only support the Government on five legislative and policy initiatives in 2026, unless real progress was made in pardoning its exiled political leader, Mr. Carles Puigdemont, and in transferring immigration policy to the Government of Catalonia.
In light of this, the PM’s policy and legislative agenda for 2026, include:
- Redistribution of public funds between the central Government and the regions and the definition of a new model for the distribution of these funds and tax collection.
- A new Law on Sustainable Mobility, which amongst other issues, introduces new mechanisms to promote a transition towards electric vehicles, forces large companies to adopt sustainable mobility plans and bans short-haul flights (under 2 hours) for routes in which a rail alternative exists.
- A new law on customer services intended to reinforce consumer rights and protection.
- A new law on the movie sector and production companies, which aims to promote and protect European, national and local content over and above content produced by large multinationals.
- A new healthcare law affecting amyotrophic lateral sclerosis patients.
- A new law on the social economy, which will introduce new fiscal credits for employment centers for handicapped people, agricultural cooperatives and retail services considered of interest to rural communities, including bars, restaurants, pharmacies, kiosks, and grocery stores, amongst others.
- The creation of a legal obligation for lobbyists and lobbying firms to register in a new national lobbying registry.
- A new law on public healthcare services and another regulating labor relations with public healthcare professionals.
- 13 billion euros for business loans managed by the Government through the national credit institute (ICO).
- Higher diesel taxes.
These initiatives are expected to be adopted in the first half of the year, and the PM has publicly stated that he also hopes to negotiate deals with his parliamentary coalition partners on other legislative priorities, including measures to tackle Spain’s housing crisis.
Once these legislative initiatives have been adopted and the final recovery and resilience funds transferred to Spain before the 31st of December, 2026, Sanchez faces a bleak 2027, with no budget, no further access to EU funds and a broken parliamentary coalition. Faced with this prospect it is not unreasonable to predict that he will dissolve the Parliament and call for general elections to be held in the spring of 2027.
.
For more information, join our social media profiles on X and LinkedIn.
