The Spanish government is confronting an impending financial burden exceeding €12.5 billion due to judicial decisions and necessary refunds, according to an analysis by the Independent Authority for Fiscal Responsibility (AIReF).

Since 2014, the central administration has incurred an average annual cost of €1 billion stemming from unfavorable court rulings.

The AIReF's findings indicate that the upcoming obligations primarily involve the repayment of certain taxes, including the Special Tax on Hydrocarbons, which is the state's financial responsibility, and the income tax refunds for pensioners from occupational mutual funds.

Additional liabilities are linked to legal decisions concerning the financing of the social electricity bond, the Mobile Telecommunications Economic Activities Tax, the annulment of the corporate tax increase previously implemented by Cristóbal Montoro, and the pension supplement for parents.

These judgments originate from rulings by Spain's Supreme Court, Constitutional Court, and the Court of Justice of the European Union.

The cumulative financial implications from these cases are projected to surpass €12.5 billion, not accounting for the accrued interest penalties due to delays in legal resolutions.

The AIReF attributes the frequent occurrence of these adverse rulings to recurrent legislative errors, including improper use of royal decrees, overstepping regulatory limits, and violations of European Union legislation.

Furthermore, the authority acknowledges uncertainty regarding the timing of these payments and how they will affect public deficit calculations.

To mitigate such financial impacts and prevent similar future occurrences, the AIReF recommends consulting European bodies in advance and utilizing legal instruments with caution.

The report also emphasizes the need to establish agile mechanisms for assessing the likelihood of success in judicial claims, enabling prompt action to reduce interest-related impacts.

AIReF's analysis also addresses macroeconomic disruptions affecting fiscal predictions and environmental risks associated with natural disasters, which the agency estimates have led to unexpected costs exceeding €47.1 billion over the previous decade, including the effects of the COVID-19 pandemic.

In light of these findings, the AIReF advocates for a dedicated budgetary allocation to manage such risks effectively.

Additionally, there are concerns regarding the consistent underfunding of civil protection resources to cover personal damages and the inefficient utilization of the contingency fund, which has reportedly allocated nearly half of its budget to current expenditures.