The Spanish Treasury has announced an increase in its net debt issuance target for the year to EUR60 billion, marking a rise of EUR5 billion compared to 2024. This adjustment is aimed at ensuring sufficient financial resources to support the reconstruction efforts in regions affected by the recent DANA (Dana de Aguas Atlánticas) disaster that occurred in October. The government has justified this slight increase as being consistent with its commitment to provide necessary support for the recovery and revitalization of the affected areas. Officials have reassured that this decision will not hinder Spain's goal of reducing its deficit from 3% of GDP (Gross Domestic Product) this year to 2.5% by 2025. Economic growth is essential for achieving this deficit reduction while maintaining the updated debt issuance target. In a press conference following the recent Cabinet meeting, Economy Minister Carlos Cuerpo reaffirmed the government's enduring commitment to fiscal responsibility, especially with the re-establishment of European Union (EU) fiscal rules. Cuerpo explained that the debt-to-GDP ratio is expected to continue its downward trajectory, with a predicted reduction to 102.5% in 2024, which is over 20 percentage points lower than the peak of 123.6% recorded in the first quarter of 2021, and further down to 101.4% by the end of 2025. This metric is vital for assessing the sustainability of public debt across nations. The financing strategy will unfold within a challenging international landscape, characterized by the European Central Bank's (ECB) ongoing 'quantitative tightening' policy, which entails a gradual reduction of its eurozone debt holdings. In this context, the positive trajectory of the Spanish economy, coupled with the government's commitment to fiscal consolidation and the prudent management by the Treasury over recent years, is enabling the maintenance of a robust and diversified investor base, thereby keeping funding costs manageable. According to Treasury reports, the majority of the net debt issuance--amounting to EUR60 billion--will be covered through medium and long-term instruments, specifically state bonds, totaling EUR55 billion. This approach will help maintain the average maturity of the debt portfolio. The remaining EUR5 billion will be secured through net issuances of Treasury bills, which will continue to provide liquidity in response to high retail demand from households. By prioritizing longer maturities, the forecast is to retain an average debt maturity of around eight years, a historical high reached in 2021. This extended maturity has moderated the effects of rising interest rates over recent years, with the average cost of outstanding debt increasing by only 57 basis points from its historic low in 2021, compared to a cumulative rise of 350 basis points in official ECB rates during the same period. This eight-year average maturity allows Spain to refinance only 12% to 14% of its total debt annually, functioning as a significant buffer, as described by Cuerpo. In 2025, Spain will continue to receive funds from the Recovery Plan, including substantial loan amounts linked to the achievement of milestones and objectives set within the plan. The Treasury's solid market access allowed it to close the 2024 financing program successfully, reflecting strong investor confidence. This confidence resulted in controlled financing costs and a reduction in the risk premium--the difference in interest rates between Spanish debt and that of Germany, seen as the eurozone's safest borrower--down to approximately 65 basis points, its lowest level in three years. The total net issuance for the year amounted to EUR55 billion, which is EUR10 billion less than the previous year, benefiting from the improved growth of the Spanish economy and adherence to fiscal responsibility. The Treasury has maintained a strong market position, with high demand for all issuances, notably during syndications in January and September, which received record interest at the European level, highlighting the robust investor confidence in the Spanish economy. The total cost of public debt currently stands at 2.21%, a marginal increase of 12 basis points compared to the end of 2023. Meanwhile, the average cost of newly issued debt has continued to decline, reaching 3.16% in 2024, down 28 basis points from 3.44% in 2023 and 80 basis points below the peak of 3.96% recorded in October 2023, aligning with the overall downward trend in ECB interest rates.