Understanding the Spanish General State Budget

Posted on Jan 20, 2025 in Law

1. Definition of the General State Budget (PGE)

The State General Budget (PGE) is an annually approved law voted by the Spanish Parliament (Cortes Generales). It systematically codes the maximum obligations that the state and its autonomous bodies can recognize. In general, it details all the expenses of the various entities comprising the state sector, as well as the income expected to be obtained during the corresponding period.

2. The General Appropriations Act

The General Appropriations Act includes the basic rules governing the State Budget, approved annually. It is the law governing public administration and accountability of public finances.

3. Budgetary Stability Law

The Budgetary Stability Law prohibits state expenditures from exceeding income. If, in any year, the state spends more than it earns, it must compensate for this in the next three years. This law affects all state administrations, autonomous regions, and municipalities.

4. Article 134 of the Spanish Constitution

Article 134 of the Constitution is devoted entirely to the PGE. Among other things, it states:

It is the responsibility of the Government to draft the PGE, and of the Cortes Generales to examine, amend, and approve it.
The PGE will be annual, including all expenditure and income of the state sector, and will indicate the amount of tax benefits affecting State taxes.
The Government must submit the State Budget to the Congress of Deputies at least three months before the expiry of the previous year’s budget.

5. Structure of the General State Budget

The General State Budget is structured into the following titles:

Approval of budgets and their modifications.
Budgetary management.
Personnel costs.
Public pensions.
Financial operations.
Tax standards.
Local authorities.
Social contributions.

6 & 7. Public Entities

(Further information needed for a complete answer)

8. Budgetary Process

The budgetary process involves the following stages:

Elaboration: Executive branch
Approval: Legislative branch
Execution: Executive branch
Control: (See point 15)

9. Scope of the PGE (According to Article 134.2)

According to Article 134.2 of the Constitution, “The General State Budget shall be annual, including all expenditure and revenue of the state sector, and shall indicate the amount of tax benefits affecting State taxes.” The scope of the PGE includes:

The State (government departments and other constitutional bodies).
Autonomous agencies of the General State Administration.
Social Security.
State agencies.
The public entity and the Spanish Broadcasting and remaining state corporations for the management of broadcasting services.
State corporations.
State foundations.
Public business entities and other public bodies.
Funds without legal personality.

10. Parliament’s Role in Approving the Finance Act

Parliament is responsible for the approval of the State’s Finance Act.

12. Automatic Extension of the Budget

The General Appropriations Act provides that if the PGE is not approved by January 1st of the year in question, the previous year’s budget will be automatically extended until the new one is approved and published in the Official State Gazette (BOE).

13. Role of the General Comptroller

(Further information needed for a complete answer, likely related to internal control)

14. Deadline for Presenting the Budget Bill

Section 134 of the Constitution states that the Government must present the General State Budget Bill to the Cortes at least three months before the end of the current fiscal year.

15. Internal and External Control

External control is the responsibility of the Court of Accounts, while internal control falls under the General Comptroller of the State Administration.

16. Yes/No Questions

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19. Types of Amendments

Amendments can be classified as total amendments (to the entire budget) and partial amendments (to specific sections).

20. Yes/No Questions