Berliner Boersenzeitung - Spain PM accused of 'blackmail' by tying budget to flood aid

Prime Minister Pedro Sanchez's government unveiled its spending plans for next year in September, forecasting a public deficit reaching 2.5 percent of annual economic output.

But the text has been on the backburner as the fragile coalition grapples with fiendishly difficult parliamentary arithmetic.

Several Spanish governments have failed to pass their budgets since the European country returned to democracy after the 1975 death of right-wing dictator Francisco Franco, including last year.

They can avoid paralysis thanks to a constitutional mechanism that extends spending limits from the previous budget but constrains action to small adjustments.

"No one would understand" why Spain would settle for tinkering after its worst floods in decades, Budget Minister Maria Jesus Montero said in Sunday's El Pais daily.

The torrents of muddy water have killed 222 people, wrecked infrastructure, destroyed businesses and submerged fields, with the final bill expected to soar to tens of billions of euros.

The government has already announced economic recovery measures collectively worth more than 14 billion euros, but they will affect Spain's budgetary outlook and require major adjustments.

The government insists fresh public accounts for 2025 can accelerate the desperately needed aid. "To rebuild, a budget is necessary... the emergency requires it," Montero said.

- Aid 'cannot wait' -

Montero urged "unity" from Spain's polarised political class, but the main opposition conservative party swiftly dashed any hopes the catastrophe would lay the ground for a new budget.

The flood victims "must not be used as bargaining chips in the budget negotiations", the Popular Party said in a statement, condemning Sanchez's "blackmail".

Consultancy firm Teneo suggested the government could use the "extraordinary circumstances" to convince potential allies to "moderate their stances" but warned it would be difficult after the floods became politicised.

Junts per Catalunya, a Catalan separatist party whose support is essential for government proposals to pass, expressed doubts about the budget if it is linked to flood recovery spending.

Releasing the aid "cannot wait for the long scrutiny of a theoretical budget" and amendments to the current one can instead be adopted, Junts said.

The government's "political use" of the tragedy is "unacceptable" because it can already request EU funds and approve emergency loans and grants without a budget, business daily El Economista said.

(B.Hartmann--BBZ)