La Palma volcanic recovery funding and fiscal aid

The management of recovery funds for La Palma following the 2021 Cumbre Vieja volcanic eruption has been a subject of political scrutiny and legislative action.

Initially, the political group Coalición Canaria (CC) demanded transparency from the Spanish Ministry of Finance regarding 100 million euros allocated to the La Palma Recovery Plan. Deputy Cristina Valido submitted an inquiry noting that despite being included in the 2023 General State Budgets, the funds “never arrived,” requesting a breakdown of credits, commitments, and actual payments made between 2024 and 2026.

Subsequently, the Spanish Congress approved the ‘Canary Islands decree’ to provide fiscal and financial aid to the region. This law, which passed with significant support from the PSOE and the People's Party, extends a 60% income tax deduction for residents through 2026. It also authorizes the Canary Islands government to utilize 100 million euros from its 2025 budget surplus to rebuild infrastructure and compensate for agricultural and livestock losses. Furthermore, the decree extends the suspension of loan payments for farmers in specific municipalities, including El Paso, Los Llanos de Aridane, and Tazacorte.