Sánchez approves the housing decrees as an outgoing prime minister. And, in a new development, he draws a distinction between small property owners and ‘vulture funds’.

As expected, on Tuesday morning the Spanish Council of Ministers once again approved – albeit with amendments – the two decrees that the Congress of Deputies had rejected last Friday. Meanwhile, Pedro Sánchez had resigned on Monday and dissolved Parliament (under the Spanish Constitution, the King signs the proposal for dissolution, but this is a mandatory formality with no room for discretion); it might therefore seem strange that a government that had already resigned should return to vote on two decrees that had already been rejected. Sánchez himself acknowledged the peculiarity of the situation at a press conference.  But if Parliament turns its back on the people, he said, it is only right that the people should elect a new Parliament and that the government, in the meantime, should provide them with answers. 

Sánchez’s interpretation of the Constitution is an original and debatable one, because it is not at all obvious that a government reduced to dealing with day-to-day business can re-approve two decrees and send them to the Permanent Deputation – a sort of miniature legislative chamber comprising 69 members – where the balance of power is sufficiently altered to allow the approval of at least one of the two pieces of legislation. So questionable, in fact, that Sánchez himself questioned it in 2015, when he was leader of the opposition and Mariano Rajoy, of the People’s Party, was head of government. There had been the jihadist attacks in Paris; the then French President Hollande had invoked the mutual defence clause of the EU Treaty; and Rajoy, already in the midst of an election campaign, had not ruled out using the Permanent Deputation to approve the deployment of troops to Syria. A decision that Sánchez branded as illegitimate. This time, Sánchez is claiming legitimacy from the protesting public, to whom the government feels duty-bound to respond. At the end of the press conference, when asked whether he intended to issue further decrees, he replied cryptically: “We will not stop.”

Meanwhile, Carles Puigdemont, the leader of the Catalan independence movement who has been in hiding in Belgium for eight years, can return to Spain without fear of arrest. The Spanish Supreme Court has, in fact, revoked the arrest warrant for embezzlement that was still pending against him. Puigdemont had fled to Belgium in October 2017, following Catalonia’s unilateral declaration of independence, thereby avoiding arrest along with other members of his government. The Supreme Court had upheld the arrest warrant even after the amnesty came into force in June 2024, excluding the offence of embezzlement from its scope. The Constitutional Court today rejected this interpretation, paving the way for the amnesty. Sánchez commented on the news by defending the amnesty, although many have pointed out to him that his third government with Junts, the Catalan pro-independence party, came to an end just a few days before Puigdemont’s possible return to Spain.

Returning to the decrees issued by the outgoing Prime Minister, beyond the dilemma regarding formal correctness (which is certainly not a minor issue), there remains the substance of the new measures, which have been approved with some interesting new provisions. Among the 21 measures announced are support schemes for the purchase and construction of new homes. For example, a 10 million credit line to provide interest-free loans of up to 50,000 euros to those wishing to buy their first home. There are also tax reliefs for tenants and incentives for small landlords who rent out properties at affordable prices. The frequency with which Sánchez referred to small landlords, clearly distinguishing them from the notorious ‘vulture funds’, is perhaps the most significant development in his speech on Tuesday. They too are ‘important in this equation’, he stated, whilst reiterating that short-term tourist lettings should be taxed for what they really are: a business.

The other new development, whilst confirming the temporary suspension of evictions until 2030, is the recognition of the need to give new impetus to housing construction and to resort to solutions other than coercion to expand the social housing stock. This is how Casa 47, the public housing authority, will acquire thousands of properties from the Social Security system to convert them into housing (the measure was already in place last Friday, but was emphasised more strongly on Tuesday). Finally—recognising the urgency, denied by many, particularly on the left, of building new properties—the government will allocate 280 million in guarantees to promote residential construction with the aim of ‘increasing supply in the short term’, plus a further 400 million earmarked for social housing providers.

The second decree, the one bearing Sumar’s signature and which, as early as last week, provided for the automatic extension of contracts and hefty compensation payments to be borne by owners wishing to terminate them, was announced by Sánchez in passing, with the warning that it will not even come into force until its final ratification – a highly unlikely prospect, as it is opposed not only by the Catalans of Junts but also by Basque nationalists. It is a sop to the far left, the flagship measure waved by the allies of a political chapter that is about to draw to a close. Although he cannot ignore the packed squares and an impending general strike – which seems aimed more at the opposition than at the government – the shrewd Sánchez has given the impression that he is well aware that elections are won in the centre.