the euro zone

Deal or no deal

Not even the Spanish government works during bank holidays. As we enjoy this "puente", it's likely that the only occupants of Madrid's Palacio de las Cortes are junior politicians desperate to show their dedication - and even then, probably only until about half five today. No wonder prime minister Pedro Sánchez was working so hard to get a draft 2019 budget finalised by close-of-play yesterday, in time for the Monday deadline for submission to the EU. Sending the spending plan to Brussels, though, is the easy part.

On Thursday morning, details emerged of a deal made late Wednesday between Sánchez and Pablo Iglesias, leader of the leftist group Unidos Podemos, on which the Socialists depend for parliamentary support. The fifty-page document - signed by both politicians as they beamed for the cameras - contains some welcome proposals, such as increasing the minimum wage to €900 next year (from a meagre €735.90 currently) and building 20,000 new homes at "accessible [rental] prices", one way in which Iglesias proposes tackling "abusive" rent increases.

So far so good. But the Sánchez-Iglesias spending plan needs more than just Podemos' support to be passed to the Senate (upper house) - and that's where the problems begin. The Socialists hold 84 seats in the Congress of Deputies (lower house) and Iglesias' party has 67; their combined 151 votes for the 2019 budget are still short of the 176 required for a parliamentary majority.

Unfortunately for Sánchez, he also needs approval from Catalan pro-independence parties and Basque nationalist groups. Yet Catalonian president Quim Torra - a politician willing to exploit the deal-based nature of Spanish politics - is determined to thwart the PSOE leader.

Last week, Torra threatened to withdraw his support for the national government unless it reveals a new plan for Catalonian secession by the end of October. Torra's deadline is far from arbitrary, because the first parliamentary vote on the draft 2019 budget is scheduled for November. Sánchez's government won't budge, huffily stating last week that it "does not accept ultimatums". The most recent stand-off between Madrid and Barcelona looks set to hamper the progress of Sánchez's new spending plan to the upper house.

But even if he manages to pass the PSOE-Unidos Podemos budget in next month's vote, the prime minister's problems aren't over. To fund his expensive welfare proposals, Sánchez has agreed on more relaxed deficit targets for 2019 with the EU, up to 1.8% from the 1.3% agreed upon by the previous Conservative government. The Conservative Popular Party controls the Senate, though, and has already voted against less stringent deficit goals. Pending a collective lobotomy, it's unlikely to change its stance next month.

Sánchez will no doubt kick back this weekend, the Iglesias deal done and a draft 2019 spending plan fired off to the EU Commission. His budget ordeal, though, is only just beginning.