General Council forwards government‑backed reform of 'golden rule' to committee, sets gradual debt target of 25%

The General Council voted to take into consideration a government‑backed bill to amend the 2014 Law on financial sustainability and budgetary and fiscal stability — the so‑called “golden rule” — and referred the proposal to committee for detailed work. The majority text, tabled by Demòcrates and Ciutadans Compromesos, was approved for processing with 20 votes in favour and eight abstentions; an alternative proposal from Concòrdia was rejected in plenary (11 in favour, 17 against). Concòrdia said it remained open to cooperating on improvements.

The draft reform amends several core articles of the stability law. Article 12 would permit temporary breaches of the statutory debt ceiling when any new borrowing is used exclusively to amortise previous debt and sets out a progressive reduction of the law’s debt ratio — currently fixed around 40% of GDP — toward a 25% target over the coming years (some reports indicate a long‑term horizon in the bill). The government notes actual public debt is below the legal ceiling, at roughly 30.6% of GDP.

Article 15 introduces conditional flexibility on deficit targets by allowing a deficit of up to 1% of GDP in the event of a technical recession, provided the treasury has previously accumulated cash surpluses. Article 16, long criticised as difficult to apply, is reworked to secure compliance with the law’s objectives without relying solely on macroeconomic forecasts and to guarantee a minimum level of real investment. Article 19 clarifies the calculation of the statutory 0.5% of the budget destined for the compensation account and excludes certain variations in financial assets and liabilities from that test. Article 20 removes a numeric ceiling on the weight of direct taxation and replaces it with a transparency requirement: any proposal with fiscal implications must be accompanied by a fiscal impact report so the Council has the necessary statistical and impact elements before debating tax measures.

Concòrdia’s alternative proposal would have limited changes to articles 16 and 20 and added a transitional provision for gradual implementation. It also sought a structural reform of the expenditure rule, replacing the current growth‑linked cap on operating spending with a proportionality criterion between current and capital expenditure, and argued that a fixed 40% ceiling on direct taxation is difficult to meet. In debate, Concòrdia warned that rising operating expenditure is eroding investment capacity and urged measures to protect future generations from unsustainable spending.

Social Democrats (PS) voiced firm reservations. Deputy president Pere Baró warned that a rigid, progressive cut of the debt ceiling to 25% could tie the hands of future governments, constraining their ability to invest or respond to unexpected events, and reiterated his party's long‑standing view that the 2014 law is hard to apply. Baró also criticised recent increases in direct tax revenue as coming at the expense of the productive sector and called for fiscal reform that protects labour incomes without suffocating businesses.

Majority MPs defended the reform as realistic and consistent with fiscal discipline. Carles Naudi (Ciutadans Compromesos) said the 2014 framework delivered good results over eleven years and that public debt has fallen markedly since the COVID crisis; he argued the new targets could be met without raising taxes through rigorous management. Jordi Jordana (Demòcrates) said the aim is to make legal compliance compatible with current administrative needs and described the proposed debt reduction as achievable. Maria Àngels Aché (Concòrdia) noted her party’s longstanding push to update the sustainability framework and recalled prior attempts to introduce changes through 2024 and 2025 budget amendments.

Finance Minister Ramon Lladós told the chamber the existing law had been effective but required adjustment to fit current economic parameters, and warned that processing two parallel reform texts could complicate and prolong parliamentary procedure. Andorra Endavant said it would back processing both initiatives while expressing a clear preference for the majority’s plan to tighten the debt limit; party leader Carine Montaner reiterated her group’s commitment to fiscal restraint and a low tax burden.

With the majority text chosen for parliamentary processing, the bill now enters the amendment period. MPs may table changes before the proposal is examined in committee and returned to the chamber for further debate and a final vote.