Spain's Treasury sets 0.1% GDP deficit limit and record funding for regions

The Spanish Ministry of Finance, led by Minister Arcadi España, convened the Council of Fiscal and Financial Policy (CPFF) to present a new fiscal framework for the autonomous communities for the 2027‑2029 period. The proposal offers an 8% increase in overall financing – the highest ever – and sets a uniform deficit ceiling of 0.1% of GDP for each region, amounting to roughly €1.7 billion in red numbers for 2027. The government also signaled willingness to negotiate asymmetric deficit targets and to discuss a new autonomous‑financing model in a later CPFF meeting.

Opposition parties and several regional governments have voiced criticism. The PP, Vox and other opposition groups plan to force a debate on the financing model, which they say was negotiated without sufficient territorial dialogue. Regional authorities in Asturias, the Canary Islands, Galicia, Castilla‑León and others have either called for reforms to the financing rules, warned about the distribution of the 8% increase, or rejected the current draft, stating it favours certain regions.

The ministry expects to approve the non‑financial spending ceiling and the stability path in the Council of Ministers the day after the CPFF meeting, before forwarding the measures to the Congress for a vote scheduled for mid‑July. If rejected, a second parliamentary vote is planned for late July.