Spain regional financing model approved amid territorial disputes

The Council of Fiscal and Financial Policy has approved a new regional financing model proposed by the Spanish Ministry of Finance, though the decision faces significant territorial opposition. While the government achieved a procedural victory, several autonomous communities have expressed concerns or outright rejection of the terms.

In the Canary Islands, the government supports the model, noting it will increase resources by 1,337 million euros and protect the Economic and Fiscal Regime (REF). Conversely, in Catalonia, officials have rejected the possibility of an economic agreement (concert econòmic), calling for realism and stating the current proposal does not prevent fiscal imbalances.

Andalusia has also criticized the proposal, with regional leaders arguing that the model fails to address long-standing underfunding and creates disparities between citizens of different regions. Meanwhile, in Valencia, the approval marks a significant step toward resolving long-standing funding issues that have persisted since 2014, despite the political difficulty of passing the reform through Congress.

The reform is expected to move to the Council of Ministers and eventually to Congress, where it must secure a majority to become law.