Fiscal and Financial Policy Council approves regional financing reform with support from Catalonia and the Canary Islands

The Fiscal and Financial Policy Council, a body that brings together the autonomies that are financed within the common regime system and the Ministry of Finance, has given the green light to the reform of the financing system proposed by the Government. The department run by Arcadi Spain - which has half of the votes in this body - has asserted its majority and has moved forward with the proposal with the support of Catalonia and the Canary Islands.

"It has been 17 years since a Fiscal and Financial Policy Council has not debated a reform of the financing model," highlighted the Spanish Minister. A model that, he has defended, improves the position of all communities, is not an offense and is open to change. "Congress has the last word," the minister has repeated on several occasions.

The autonomous communities governed by the Popular Party, which finally attended the meeting despite the call for a boycott from Madrid - which was absent - have rejected the proposal. A refusal that has been joined by Asturias and Castilla-La Mancha, governed by the PSOE, but also contrary to the Government's approach.

The approval of the new model in the CPFF represents an initial step in what appears to be a long process with uncertain results. Now, the Government must articulate a draft law that must be approved by the Council of Ministers "in the coming weeks", the Spain Minister has highlighted.

Afterwards, it will travel to the Congress of Deputies where, currently, the Executive does not have a sufficient majority to carry out the law. Junts, which could tip the balance in favor of the Executive, has already announced that it will present an amendment to the entire rule when it reaches the Lower House to prevent it from even being processed.

Regarding the negotiations with Junts, the Minister of Finance has shown his confidence in reaching an agreement based on the project approved this Friday and has shown himself willing to introduce changes in the amendment process, although he has not specified which ones. "This model is much better than the previous one, it has many more resources and the parliamentary process must be approached responsibly," the minister added. "I invite you to look at the model without sound or fury, looking at the needs of the territory, if it is better than the current one and thinking about the country as a whole," Spain concluded.

Furthermore, in the hypothetical case that the norm surpasses the parliamentary procedure, the autonomies would have to individually adhere to the new regulations. The Executive has set the goal of getting the rule approved in Parliament before the end of the year so that it can come into force at the beginning of 2027, before the electoral cycle begins.

"The Government has received a loud and resounding no"

After concluding the meeting, the communities governed by the Popular Party appeared en masse on the steps of the Ministry of Economy with the Andalusian counselor, Carolina España, as spokesperson. Spain has indicated that the Government "has received a loud and resounding no" to a proposal that "privileges Catalonia" and that is "designed by the independentistas to privilege the independentistas."

The counselor has called it "betrayal" and "a joke" that "political favors are being paid" with Spaniards' money and has asked the Treasury, on behalf of all the PP communities, to withdraw the model. "We have asked that he withdraw and that they negotiate with all the communities, including those of the PSOE," he said.

The general lines of the reform of the financing system that the CPFF has approved have been known for some time. The Executive proposes increasing the part of the tax pie that corresponds to the autonomous communities by 21,000 million euros so that none of them see their resources reduced. However, the distribution of the new funds particularly benefits Catalonia - which would receive about 507 euros more in financing per inhabitant, according to Fedea estimates -, the Valencian Community (496 euros), Murcia (468), the Balearic Islands (450 euros) and Madrid (409).