Spain's Largest Ever Budget Passed by Lower House... Innocent Netflix Caught in the Crossfire

Mandatory Implementation of Regional Official Language Content Such as Minority Romance Languages and Catalan Planned

Pedro Sanchez, Prime Minister of Spain
Photo by AP Yonhap News

[Asia Economy Reporter Park Byung-hee] As Spain's largest-ever budget bill passed the lower house on the 25th (local time), streaming companies like Netflix were inadvertently affected. The left-wing coalition government, in the process of securing votes needed for the budget bill's passage, decided to push a law mandating the use of Catalan, Basque, and Galician languages in streaming content.

According to Bloomberg and other sources, the budget bill passed with 188 votes in favor, 156 against, and 1 abstention. The budget proposed by the Spanish government was initially rejected by the parliament last month but was later approved.

The left-wing coalition led by Prime Minister Pedro Sanchez was formed as a minority government in January last year. Out of the total 350 seats in the lower house, the coalition currently holds only 155 seats. The support of the Catalan left-wing Republican Party (ERC), which holds 13 seats, played a decisive role in passing the budget bill.

To gain ERC's support, the coalition decided to push a law mandating streaming companies to produce content in regional official languages.

While Spanish (Castilian) is the official language of Spain, Catalan, Galician, Basque, Valencian, and Occitan are recognized as regional official languages. According to the Spanish government, about 20% of the approximately 47 million Spanish citizens are fully bilingual in Spanish and a regional official language.

The Spanish coalition plans to push a law requiring streaming content to include at least 6% usage of the regional official languages most spoken by citizens: Catalan, Galician, and Basque. Catalan is the most widely used regional official language, spoken by about 6.8 million Spaniards. Basque is spoken by 1 million, and Galician by 1.3 million.

Although the upper house vote is still pending, with the budget bill passing the lower house, the Sanchez coalition is likely to avoid an early general election. Recently, neighboring Portugal held an early general election after its budget bill was rejected.

Lawrence Allen, an analyst at IHS Markit, said, "The passage of the budget bill was very important for the stability of the Sanchez government," adding, "The possibility of an early general election in 2022 has significantly decreased."

According to the budget, the Spanish government can spend up to 196 billion euros next year.

The budget projects economic growth rates of 6.5% this year and 7% next year. The fiscal deficit ratio relative to GDP, which was 11% last year, is expected to be 8.4% this year and 5% next year.