Spain to present draft of new financing model for autonomous communities in early 2026

The Spanish government will present a draft of its new financing model for the autonomous communities at the beginning of 2026.

This announcement followed Monday's meeting of the Fiscal and Financing Policies Council held in Madrid.

The government aims to make a "first revelation" of the new model so it can be implemented before the current term ends in 2027.

The initiative, largely driven by Catalonia, is part of the agreement between the left-wing pro-independence party Esquerra Republicana and the Socialist Party that enabled PM Pedro Sánchez to secure his investiture.

The proposed model, which would apply to all Spanish autonomous communities, would grant each region full control over its taxes, a long-standing demand of Catalan pro-independence parties.

"This government wants to reform the current financing system," said Spanish government vice president María Jesús Montero. "The gap between the best-funded autonomous community and the least-funded will be reduced."

Montero explained that the current difference in funding between the highest and lowest-funded regions is approximately €1,000 per person. "It is not justified," she said, adding that the new system will address this imbalance.

She also assured that "no territory will be disadvantaged" and that the reform will provide "more resources for health, education, and social services."

However, the opposition conservative People's Party has long opposed the plan, arguing that it could create territorial inequalities, despite many autonomous communities governed by the party standing to benefit.

The party criticized the government for designing the system "bilaterally" with Catalonia.

To learn more about Spain's new financing model, listen to this episode of our podcast Filling the Sink.