Overview
- Finance Minister María Jesús Montero told regions she will present a comprehensive overhaul of the regional financing model in January or February 2026, combining multilateral rules with bilateral recognition of singularities and aiming for implementation before 2027.
- The CPFF backed allowing a 0.1% of GDP deficit for autonomous communities each year from 2026 to 2028, but PP‑led regions voted against, the Canary Islands withheld support, and the targets still require approval by the Congress.
- Montero warned that if Congress rejects the fiscal path, regions would have to balance their budgets instead of running a 0.1% deficit, a shift she estimated would mean adjustments of about €1.75 billion in 2026 and €5.49 billion over the triennium.
- Hacienda announced record advance payments for 2026 of about €157.73 billion to regions—roughly 7% more than in 2025—or €170.3 billion when adding the 2024 settlement, which the government frames as temporary relief pending reform.
- Reactions split sharply as Catalonia said the approach aligns with July’s agreed principles and denies any favoritism, while Balearic, Canary, Aragonese and Valencian officials criticized the lack of documentation, the mix of bilateral and multilateral terms, and called for measures such as a temporary equalisation fund; Extremadura’s bid for technical working groups was rebuffed and several PP regions plan to challenge CPFF minutes from February.