Spain's Council of Ministers was delayed over two hours on Friday due to disagreements between PSOE and Sumar on housing measures amid the Iran war energy crisis. Pedro Sánchez negotiated directly with Yolanda Díaz to split the package into two decrees: a main one with tax cuts worth 5 billion euros and another extending rent contracts. Both take effect tomorrow, though the housing decree may fail in Congress.
On Friday, March 20, 2026, Spain's extraordinary Council of Ministers at La Moncloa faced high tension over the energy crisis from the US-Israel war on Iran, which spiked oil and gas prices by blocking the Strait of Hormuz. Sumar's five ministers refused to join the 9:30 a.m. meeting, staying in an adjacent room demanding mandatory extension of rent contracts expiring in 2026-2027 to prevent sharp hikes, plus corporate margin controls. PSOE ministers waited separately as María Jesús Montero negotiated with Ernest Urtasun, but progress stalled initially with Félix Bolaños in Rome on official trip with the King and Queen meeting the Pope. Pedro Sánchez then intervened, meeting Yolanda Díaz and Sumar ministers. Sources from both sides describe intense standoff: “This plan has to be approved yes or yes,” Sánchez said firmly, warning non-entry meant coalition rupture. Díaz replied: “President, we cannot leave this council without a housing measure, without the rent extension.” After nearly two hours' deadlock, they agreed on two decrees. The main one covers 80 measures worth 5 billion euros: IVA cut to 10% on gasoline, diesel, electricity, and gas; special tax reductions; 20 cents/liter aid to transporters, farmers, and fishermen; 80% toll discounts for electrointensive industry; extended social bonuses; and CNMC margin oversight. It will be voted Thursday in Congress with good passage odds. The housing decree extends contracts and caps hikes at 2% IPC, effective up to one month for talks with Junts and PNV, who oppose it. Sánchez downplayed the crisis as “gossip” media-friendly but a “strength” in dialogue: “Welcome to 21st-century politics.” Ernest Urtasun called it an “excellent agreement” strengthening the government. The plan aims to cushion the energy shock, with Spain better placed due to renewables.
