Spain's PM risks having state budget rejected for third year in a row

Sánchez's government, which relies on a fragile network of parliamentary allies to pass legislation, still operates under accounts from 2023 since it has been unable to secure the approval of a new fiscal framework.

The Spanish Constitution allows for the previous year's budgets to be automatically extended until there are new accounts under certain conditions if there is no parliamentary agreement.

"Of course we are going to present our budget, and we are going to give it out all to get it approved," the Socialist prime minister said during an interview with Cadena Ser radio, adding he would not step down if he fails to secure its approval in parliament.

"We will try to persuade the parliamentary groups, but I don't want to mislead anyone or fuel any speculation. The legislature will run until 2027," he added.

Extending the 2023 budget yet again leaves the government with less room to manoeuvre on fresh initiatives and social programmes in the eurozone's fourth-largest economy.

Despite being without a new budget, the Spanish economy has outperformed its European peers.

It expanded by 3.5 percent last year, driven by buoyant exports, consumption and a tourist boom, making it one of the world's fastest-growing advanced economies.