After a tense weekend of anticipation, President Gustavo Petro declared an economic emergency in Colombia on Monday, invoking a state of exception for the third time in his presidency to address a deepening fiscal crisis without legislative approval. The measure, formalized in Decree 1390, grants the executive branch 30 days to issue decrees with the force of law, a power the administration intends to use to impose new taxes and plug a 16 trillion peso (approximately US$4.2 billion) hole in the 2026 budget.
The decision immediately transformed the country’s economic instability into a constitutional and electoral battleground. Just hours after the decree was published, right-wing presidential pre-candidate Abelardo De la Espriella filed a lawsuit with the Constitutional Court, challenging the declaration as an abuse of power designed to bypass a hostile Congress.
The government argues that the nation’s finances have reached a critical breaking point. The text of the decree describes a “fiscal situation that acquired the character of grave” due to a convergence of economic factors that require extraordinary intervention.
Among the eight specific justifications outlined in the document is the urgent need to comply with a Constitutional Court order to increase payments to health providers (EPS). The decree estimates this obligation requires an additional 3.3 trillion pesos (nearly US$1 billion) for 2026, payments the administration had previously resisted.
Security concerns also feature prominently in the justification. The administration cites “recent alterations of public order” in departments such as Cauca, Cesar, and Norte de Santander as a driver for increased spending. The emergency measures seek to allocate 1 trillion pesos to the National Protection Unit and 2.7 trillion for “adequate infrastructure and technology” for the public force, ostensibly to protect candidates during the upcoming election cycle.
Colombia’s government used the failure of the tax reform bills to declare an economic emergency
Perhaps the most contentious justification listed in the decree is the refusal of Congress to pass the government’s tax reform bills. The administration argues that this legislative deadlock, combined with restrictions on liquidity and the inability to take on more debt, has created an insurmountable barrier to meeting the state’s social obligations.
While Decree 1390 itself does not create new taxes, it unlocks the door for President Petro to do so unilaterally in the coming days. The President has signaled his intention to tax the “mega-rich,” potentially reviving provisions from the failed reform, such as increasing the tax on financial movements from 0.4% to 0.5% per transaction, and expanding the wealth tax on fortunes exceeding 2 billion pesos (about $500,000) with rates up to 5%.
Emergencia Económica, decreto 1390 de 22 diciembre 2025. pic.twitter.com/rAEKqa5CMK
— MinHacienda (@MinHacienda) December 23, 2025
The administration could also be raising taxes on “negative activities” like alcohol consumption, cigarettes, and online gambling. In a response to opposition Senator Ciro Alejandro Ramirez on social media, Petro also suggested that the emergency powers imply lowering the salaries of members of Congress.
Presidential hopeful Abelardo De la Espriella launched a lawsuit against the measure
The declaration has been met with swift legal action from the opposition, moving the debate from the plenary floor to the high court. Abelardo De la Espriella, currently polling as a favorite among right-wing candidates, filed a lawsuit Monday morning asking the Constitutional Court to strike down the decree and provisionally suspend its effects.
De la Espriella argues that the “economic emergency” is unconstitutional because the Constitution reserves this mechanism for unforeseen, sudden calamities. He contends that the deficit stems from political decisions and the predictable failure of tax reform, rather than a “supervening” event.
Hoy interpuse dos acciones judiciales para frenar las ilegalidades y tropelías del régimen de Gustavo Petro:
👉 Demanda de inconstitucionalidad contra el decreto de emergencia económica.
👉 Acción popular por la venta de $23 billones en TES sin subasta pública a un… pic.twitter.com/r7tRz5b2zj— Abelardo De La Espriella (@ABDELAESPRIELLA) December 23, 2025
In a separate legal challenge filed simultaneously, De la Espriella attacked a government plan to sell Treasury Securities (TES) worth 23 trillion pesos to a single foreign buyer at a rate of 13.15% without a public auction, alleging violations of administrative morality.
Colombia’s Constitutional Court to hold an extraordinary session
The fate of the emergency measures now rests with the Constitutional Court, which is currently in judicial recess. However, the tribunal is considering convening an extraordinary session to study the viability of the decree and potentially suspend its effects while a final ruling is made.
Legal precedents suggest a difficult path for the administration. The Court previously struck down the majority of Petro’s emergency declaration regarding La Guajira, taking over four months to render a decision.
Doubts linger over whether Colombia’s government can prove the crisis was truly “sudden and unexpected,” a core requirement for an economic emergency to be declared.