The Spanish government has submitted a fiscal adjustment plan to the European Commission, aiming to reduce the national deficit to 0.8% of GDP by 2031 and decrease debt to 76.8% by 2041. The plan outlines a controlled increase in public spending, capped at 3% over the next seven years, unless tax hikes are implemented.

This strategy is designed to gradually lower the debt-to-GDP ratio, aligning with new European fiscal rules.

The government anticipates that ambitious reforms and investments could extend the adjustment period from four to seven years.

Key areas of focus include pensions, healthcare, and military spending, which will require careful management to adhere to the spending cap.

The plan also includes extending extraordinary taxes on banks and energy companies to meet fiscal commitments for European aid.