Spanish Congress approves fiscal aid for La Palma

The Spanish Congress has approved the 'Canary Islands decree,' a law providing fiscal and financial aid to La Palma following the 2021 Cumbre Vieja volcanic eruption. The measure passed with 300 votes in favor, 38 against, and 10 abstentions, seeing support from the PSOE and the People's Party (PP) despite opposition from Vox and Junts.

Key provisions for La Palma include extending a 60% income tax (IRPF) deduction for residents through 2026 and authorizing the Canary Islands government to use 100 million euros from its 2025 budget surplus to compensate for agricultural and livestock losses and to rebuild infrastructure. Additionally, the decree extends the suspension of loan payments for farmers in El Paso, Los Llanos de Aridane, and Tazacorte.

The decree also allows certain autonomous communities with a debt-to-GDP ratio below 12.4% to utilize their 2025 budget surpluses for sustainable investments in 2026, 2027, and 2028 without these funds counting toward spending limit regulations.