Sánchez government hit with fresh defeat as Congress rejects omnibus decree

'No' votes from pro-independence Junts and the conservative People's Party (PP) ensured the Spanish government's omnibus decree was rejected by Congress on Wednesday.

With headline measures including an increase in pensions for 2025 in line with inflation and the extension of public transport subsidies, the decree was defeated by 177 votes to 171, with one abstention.

Pedro Sánchez's government will now be forced to issue a new decree to increase pensions, which will need to be negotiated with other parties.

As expected, Congress also rejected a separate decree on taxing large energy companies, which lacked support from Junts and the Basque National Party from the beginning.

Agreements "not fulfilled"

The Socialist-led government had increased its calls for "common sense" from both Junts and the PP, saying that a no vote would mean ignoring the interests of 12 million pensioners.

But to no avail.

Addressing Congress, Junts spokesperson Míriam Nogueras told the Socialists they could not count on their votes as long as the commitments made between the two parties were not fulfilled.

The decree failing "will be the result of the Socialists' negligence and lack of seriousness," she said.

Nogueras insisted that Junts "is not part of any Spanish bloc" and blackmail and pressure will have "no effect."

She criticized the Spanish cabinet for approving decrees before negotiating them with other parties.

"They don't have a majority, and they should stop acting as if they did," she said, before calling on the Spanish government to issue another decree focusing solely on increasing pensions and extending transport subsidies.

"It is indecent to mix measures that help people with others that continue to strangle people and that only suit you," she said.

Nogueras also advised "other parties" – presumably referring to pro-independence ERC – that "they should stop voting yes to everything in exchange for nothing" and "not give in to blackmail."

Meanwhile, the PP described the government legislation as a "trick decree" and promised to bring an alternative initiative to Congress to "protect pensioners".

Spanish government: "Let them remember" 

The Spanish government strongly criticized the PP and Junts for opting to vote against the omnibus decree.

Speaking outside the chamber, presidency minister Félix Bolaños said that when 12 million pensioners see that their pension has been reduced in February, "let them remember that it was the PP accompanied by others."

"And tomorrow, when public transport users see that the price of their ticket has increased, let them remember that it was the PP accompanied by others," he said.

Before the vote, the Spanish government had urged all parties to approve the decree that included around sixty measures.

The first vice-president, María Jesús Montero, said that parties that vote against the decree would do so solely for political reasons, which do not address citizens' interests.

"It seems that they are trying to make the government lose a vote, when the real losers will be pensioners, workers, and young people."

During the debate in Congress, Bolaños said that the decree included "necessary and urgent" measures, and therefore it was "essential" that it passes.

"Have any of you voted to lower pensions?" he asked, "because if you vote no, you are lowering pensions."

Omnibus decree measures

The decree, among other things, includes a 2.8% increase in pensions for 2025, based on the average inflation rate of the past 12 months. It also updates the maximum contribution bases for the Social Security system and includes adjustments for other public benefits and for self-employed workers.

The decree also extends certain tax breaks, such as those for household energy efficiency and the purchase of electric vehicles, and introduces a new tax on the profit margins and fees of financial institutions.

Additionally, it maintains and expands subsidies for public transport, including free travel for children and discounts for young people and other groups. It also extends until December 31 the temporary suspension of evictions for vulnerable groups, with compensation for property owners paid by the treasury.

The decree also includes measures to ensure access to social housing and extends aid for victims of natural disasters like the DANA (cold drop) in Valencia late last year. It also sets new guidelines for calculating funds for regional governments and local entities.

Political crisis

Junts leader Carles Puigdemont had announced on Friday that he was withdrawing Congress support for the ruling Socialists until the "political crisis" was resolved.

"We have an agreement that is not being fulfilled," he said during a press conference in Brussels, referring to the pact between the two parties that secured support for Pedro Sánchez's appointment as PM.

The move followed Spain's Congress Bureau postponing a decision for the second time on a Junts proposal that would require Spanish PM Pedro Sánchez to undergo a vote of confidence.

There is growing discontent within Junts over what they see as a failure of the Spanish government to fully implement the agreements reached between them, including the lack of an amnesty for Junts party leader Carles Puigdemont, who remains wanted by the Spanish courts over his role as Catalan president during the 2017 independence push.