The Council of Fiscal Policy approves the reform of autonomous financing with the "no" of half of the autonomies

Madrid was the only absent community, while the other ten PP governments, Castilla-La Mancha and Asturias voted against a reform that will now have to overcome a complicated parliamentary process and gather an absolute majority to modify the LOFCA.

6 minutes

EuropaPress 7748840 ministro hacienda arcadi espana ofrece declaraciones medios reunion consejo

EuropaPress 7748840 ministro hacienda arcadi espana ofrece declaraciones medios reunion consejo

Add DEMÓCRATA to Google

Ask FREN

Published

Last updated

6 minutes

Most read

The Fiscal and Financial Policy Council (CPFF) approved this Friday the Government's proposal to reform the autonomous financing system. The Ministry of Finance has managed to push forward the model with the territorial support of Catalonia and the Canary Islands, against the opposing vote of twelve communities and the absence of Madrid.

The voting allows the Executive to continue the processing of a reform that promises to provide 20.975 billion euros additional in 2027 to the communities of the common regime. However, the result also evidences the lack of territorial consensus: only two of the fifteen autonomous communities affected by the system have supported the proposal.

The territorial result of the voting was as follows:

  • In favor: Catalonia and the Canary Islands.
  • Against: Andalusia, Aragon, Balearic Islands, Cantabria, Castile and León, Valencian Community, Extremadura, Galicia, La Rioja, and Murcia —the ten communities governed by the PP that attended—, in addition to Castile-La Mancha and Asturias, governed by the PSOE.
  • Absent: Community of Madrid.
  • Outside the common system: Basque Country and Navarre, which have their own foral regimes.

Madrid publicly expressed its rejection, but its position cannot be counted as a formal vote within the Council because it decided not to attend the meeting. Therefore, the balance among the present communities was two favorable votes and twelve opposed.

Why it was approved despite the regional rejection

The arithmetic of the CPFF explains how the Government can present as approved a proposal rejected by the vast majority of the communities. The General Administration of the State holds 50% of the votes of the Council, while the other 50% is distributed among the autonomous communities. By having half of the weighted vote, the Government only needed at least one community to support its proposal to overcome the tie.

Finance had guaranteed the support of Catalonia, after the design of the model stemmed from the political agreement reached between the PSOE and ERC. The Canary Islands subsequently announced its favorable vote after agreeing that the resources linked to its Economic and Fiscal Regime would be excluded from the calculation of the system.

With those two supports, the Ministry was able to approve the proposal despite the opposing vote of twelve of the fourteen communities present. The result confirms the strong territorial isolation of the model, but does not legally prevent it from continuing its course.

The snub from Madrid did not prevent the voting

The Community of Madrid was finally the only autonomy that did not attend the CPFF. The Government of Isabel Díaz Ayuso had asked the other PP communities to support its boycott to try to prevent the constitution of the Council due to lack of quorum.

The call was unsuccessful. The other ten autonomous governments of the PP chose to attend and record their rejection through voting. The presence of these communities allowed the body to be constituted normally and to hold the vote.

Madrid conveyed its opposition electronically and described the procedure as a "charade," but that communication does not equate to a vote cast within the CPFF. The community remains, therefore, absent in the formal count, although politically it aligns with the rejection expressed by the other PP governments.

Castilla-La Mancha and Asturias also vote against

The opposition to the model was not limited to the autonomies governed by the PP. Castilla-La Mancha and Asturias, the other two socialist communities integrated into the common system, voted against.

Both governments believe that the proposal presents problems both in content and procedure for having been initially negotiated with Catalonia and ERC before being submitted to multilateral debate.

Castilla-La Mancha had requested that the central Government abstain from the vote so that the result reflected exclusively the position of the communities. Asturias, for its part, questions whether the distribution grants sufficient weight to aging, dispersion, and orography when calculating spending needs.

What the Council has really approved

The agreement of the CPFF does not imply the entry into force of the new system. It also does not equate to the definitive approval of a law.

What the Council has endorsed is the political and financial proposal that will serve as the basis for the Government to draft the necessary legislative projects. The Executive must now convert the agreed economic model into norms with the rank of law.

The reform proposes, among other measures, raising the autonomous participation in the IRPF from 50% to 55% and the corresponding VAT from 50% to 56.5%. The Treasury estimates that the communities will have a total of 224.507 million euros in 2027, 20.975 million more than with the continuity of the current system.

Andalusia would be the community that would receive the most additional resources, with 4.846 billion; followed by Catalonia, with 4.686 billion; Valencia Community, with 3.669 billion; and Madrid, with 2.555 billion.

 

The legislative path that opens now

After the pronouncement of the CPFF, the Treasury must prepare the draft bills that develop the reform. The planned process includes several stages before the text reaches Parliament:

  1. Drafting of the draft bills. The Treasury must transfer the figures, funds, percentages of allocation, and distribution criteria to the corresponding legal texts.
  2. First round in the Council of Ministers. The Government will approve the draft bills to formally initiate their administrative processing.
  3. Public hearing and reports. The texts must be submitted for consultation and gather the mandatory opinions and reports, including those corresponding to the Council of State.
  4. Second round in the Council of Ministers. Once the observations have been incorporated or evaluated, the Executive will approve the bills and send them to Congress.
  5. Processing in Congress. The bills will face the total debate, the presentation of amendments, their passage through the committee and commission, and finally, the vote in the Plenary.
  6. Passage through the Senate. The Upper Chamber may approve, amend, or veto the texts. Given the absolute majority of the PP in the Senate, it is foreseeable that it will introduce changes or veto the reform.
  7. Return to Congress. The Lower Chamber will have the final word and may lift the veto or accept or reject the Senate's amendments, with the majorities established for each type of norm.

The LOFCA requires reaching 176 votes

The centerpiece of the reform will be the modification of the Organic Law on the Financing of Autonomous Communities (LOFCA). As it is an organic law, its approval requires an absolute majority in Congress in a final vote on the entire text.

The Government will therefore need to gather at least 176 favorable votes. It is not enough to have more votes in favor than against or to surpass the process by simple majority.

Along with the LOFCA, it will be necessary to reform the Law 22/2009, which regulates the financing system of the communities of common regime and of the cities with autonomous status, in addition to adapting the tax allocation framework to each territory. These ordinary rules do not require an absolute majority, but their content is closely linked to the organic reform.

The new financing cannot be applied if the Executive manages to approve only part of the legislative package. The percentages of tax assignment, the leveling funds, and the new distribution criteria must have a complete regulatory fit.

Junts, the key to a majority that is not guaranteed today

The main difficulty is now in Congress. PSOE and Sumar do not add up to the 176 deputies necessary to reform the LOFCA, so the Executive will have to rebuild the investiture majority.

The support of ERC seems to be on track due to the prior agreement on the model. However, the Government will also need the support of other parliamentary partners and, presumably, of Junts. The independentist formation has so far shown its rejection of the proposal because it considers that it does not establish a sufficiently unique financing for Catalonia.

PP and Vox maintain their opposition. The negative vote expressed by Castilla-La Mancha and Asturias in the CPFF also adds political pressure on the socialist deputies from those territories, although the regional representatives cannot legally condition the voting direction of the parliamentary groups.

The Government intends to complete the processing before the end of 2026 so that the new model can be applied from January 1, 2027. This timeline requires sending the projects to Congress quickly and previously closing a parliamentary agreement that, after the CPFF vote, is still not assured.

 

More key points, information and questions with FREN

AI-GENERATED CONTENT

What parliamentary and administrative procedures must the reform of the regional financing system overcome before its final approval?

The reform of the regional financing system is not regulated by a single specific procedure but is structured by combining political negotiation, government decisions, and usually one or more state laws (and, if applicable, statutory or even constitutional reforms). Below is a description of the typical itinerary of administrative and parliamentary procedures that it should overcome before being considered definitively approved.

1. Prior governmental and technical phase

Before reaching the Cortes, a long political and administrative phase usually takes place, which is not always legally predetermined but is practically essential:

  • Internal technical work: the Ministry of Finance (and other involved parties) commissions its technical and study services to carry out simulations, impact reports, and draft models (distribution formulas, funds, equalization guarantees, etc.). This phase does not have a formal closed procedure but is key to shaping a viable proposal.
  • Bilateral and multilateral political negotiation: the central government maintains contacts with regional presidents and finance ministers, usually in parallel with parliamentary negotiations supporting the government or the Budgets. These are political decisions, not regulated, but they condition the subsequent legal content.
  • Fiscal and Financial Policy Council (CPFF): this State-CCAA body is the natural forum to discuss the model. Its agreements do not replace the law but can be:
    • Advisory or political: declarations of principles or reference frameworks.
    • More substantial commitments: agreements on specific variables (funds, indicators, transitional periods), which must then be reflected in norms with the force of law.
  • Bill draft: when there is minimum internal consensus, the Government prepares a bill draft or reform of several financing laws, which is submitted to:
    • Internal reports (Technical General Secretariat, State Attorney).
    • External reports, where mandatory: Council of State, Bank of Spain, or other advisory bodies, depending on the scope of the text.
  • Approval in the Council of Ministers: the Government, by agreement of the Council of Ministers, approves the bill and sends it to the Congress of Deputies. This decision is adopted by a simple internal majority of the Council.

2. Ordinary parliamentary processing (state bill)

Once registered in the Congress, the reform follows the common legislative procedure:

  • Qualification and admission for processing by the Congress Board and publication of the text. As it is a government bill, there is no vote of “taking into consideration.”
  • Amendment period: groups may submit total amendments (with alternative text) and amendments to the articles. The former are debated in the Plenary; their rejection requires a simple majority for the bill to continue.
  • Committee and subcommittee: the text goes to a subcommittee and then to the competent committee, which debates the articles and amendments and approves a report. Decisions are made by simple majority.
  • Congress Plenary: the Plenary debates the report and reserved amendments and votes on the entire bill. For an ordinary law, a simple majority of votes cast is sufficient; if any part requires organic law status, those provisions would require an absolute majority in a final vote on the organic part.
  • Referral to the Senate: the Senate may approve the text, propose amendments, or issue a veto. The veto is approved by absolute majority or, after two months, by simple majority.
  • Second round in the Congress: the Congress:
    • May accept or reject the Senate's amendments by simple majority.
    • May override the Senate's veto by absolute majority in a first vote, or by simple majority after two months.
  • Sanction, promulgation, and publication: once the final text is approved, it is sent to the King for sanction and promulgation and published in the Official State Gazette (BOE). The law comes into force on the date set in its final provision or, failing that, after 20 days.

3. Role of the Autonomous Communities

Besides their political participation in the CPFF and bilateral negotiations, they may intervene in other ways:

  • Mandatory or optional reports: if the norm intensely affects regional competences, reports may be requested from regional bodies (Consultative Councils, regional parliaments), generally non-binding unless specific statutory provision exists.
  • Legislative initiative: regional assemblies may approve proposals for law before the Congress proposing an alternative or complementary model, which would follow the same procedure as any bill proposal.
  • Subsequent control: the Autonomous Communities may raise competence conflicts or constitutional challenges if they consider the reform violates their competences or the principle of financial autonomy.

4. Possible statutory or constitutional reforms

If the new model requires modifying Statutes of Autonomy or even the Constitution, additional procedures would be activated:

  • Statutory reforms: usually initiated within the Autonomous Community itself, requiring approval by its Parliament and by the General Courts through an organic law (absolute majority in each chamber), and in some cases, an autonomous referendum.
  • Constitutional reform: if relevant constitutional provisions are affected (e.g., basic principles of territorial organization), the procedure of Title X of the Constitution must be followed, with reinforced majorities and, in certain cases, dissolution of the Cortes and referendum.

In summary, the final approval of a regional financing reform combines intense prior political negotiation with an ordinary or reinforced legislative procedure, in which parliamentary majorities (simple, organic, or even constitutional) give legal validity to the agreements reached in interterritorial forums.

Can you detail the exact role played by the Fiscal and Financial Policy Council in the reform of regional financing? What parliamentary majorities would be necessary in a specific reform scenario that included parts of ordinary law, organic law, and statutory changes? What avenues of challenge would the Autonomous Communities have if they disagree with the finally approved financing model?

What are the competencies and functions of the Minister of Finance in Spain according to current legislation?

The competencies and functions of the Minister of Finance in Spain are generally defined by the regulations on the Government and the General State Administration, and specifically by the royal decrees organizing the ministries. The key references are the Law 50/1997, of November 27, on the Government and the Royal Decree 829/2023, of November 20, restructuring ministerial departments, as well as the royal decree on the basic organic structure of the Ministry of Finance itself.

1. General functions of any minister

The Government Law configures the minister as a member of the Government and head of a ministerial department. According to the law text, ministers:

  • Have competence and responsibility in the specific sphere of their department's activity. That is, they are the highest political and administrative authority in their material scope.
  • Must develop the Government's action in their scope, in accordance with the agreements of the Council of Ministers and the guidelines of the Prime Minister.
  • Exercise regulatory power in matters pertaining to their department, issuing norms of lower rank than law (mainly ministerial orders) and proposing royal decrees to the Council of Ministers.
  • Exercise all other competences attributed to them by laws and the organization and functioning rules of the Government and the General State Administration.
  • May countersign the acts of the King regarding matters within their competence, assuming the corresponding political responsibility.

All this is inserted in the general structure fixed by Law 50/1997: the Prime Minister directs the Government's action and coordinates the ministers, while the Council of Ministers approves bills, the General State Budget Bill, royal decree-laws, royal legislative decrees, and regulations developing laws. The minister participates in all these collegiate decisions and executes those affecting their department.

2. Specific competencies of the Minister of Finance

Royal Decree 829/2023, in its regulation of the current ministerial structure, expressly establishes that:

  • The Ministry of Finance is responsible for the proposal and execution of the Government's policy in matters of public finance, budgets, and expenditures, in addition to other competences and attributions conferred by the legal system.
  • The Ministry is structured, as superior bodies, into the State Secretariat for Finance and the State Secretariat for Budgets and Expenditures, which depend on the minister and through which much of the management is channeled.

Based on this legal foundation, and in connection with the set of financial and budgetary norms, the material functions of the Minister of Finance include, among others:

  • The direction and coordination of the State's budgetary policy, including the preparation, promotion, and defense of the General State Budget Bill, which is then approved by the Council of Ministers and sent to the General Courts.
  • The formulation and execution of the public revenue policy, particularly tax policy (design, proposal, and management of state taxes) and other financing figures of the state public sector.
  • The direction of the expenditure policy and its control, through budgeting, monitoring, and budgetary stability mechanisms provided by legislation.
  • The organization and supervision of the management of the Public Treasury and State debt, including proposals to the Council of Ministers on public debt issuance and credit operations when allowed by law, in accordance with the Government Law.
  • Participation in the financing of autonomous communities and local entities, within the framework of laws regulating territorial financing.

3. Normative capacity and initiative of the Minister of Finance

Regarding legislation and regulation, Law 50/1997 establishes that the Government exercises legislative initiative and regulatory power. On that basis:

  • The Minister of Finance may promote bill drafts in matters within their competence (tax, budgetary, financial, etc.), which are processed internally and, once approved by the Council of Ministers, become bills sent to the General Courts.
  • May propose royal decrees to the Council of Ministers that develop laws in the fiscal and budgetary field, in accordance with the regulation drafting procedure provided in the Government Law.
  • In direct exercise of their regulatory power, issues ministerial orders in matters proper to Finance (tax management, budgeting, accounting, Treasury, etc.), always within the framework of laws and regulations approved by the Government.

In summary, according to current legislation, the Minister of Finance is the highest responsible for public finance, the State budget, and expenditure, with broad political and administrative leadership functions, and significant capacity for initiative and regulatory development within the framework set by the General Courts and the Government itself.

What were the results and parliamentary composition after the latest regional elections in the communities governed by the PP?

Based on the information available from consulted sources (mainly news from Demócrata, regional press, and some national media), a reasonably detailed picture of the results and parliamentary composition in several communities governed by the Popular Party (PP) can be drawn, although only in some cases are complete seat figures by party available. Below is a summary, community by community, of what is explicitly documented and the type of majority with which the PP governs.

Communities where the PP governs alone with an absolute majority

Community of Madrid

The Assembly of Madrid is one of the clearest examples of PP absolute majority:

  • According to 2025 survey analyses, it is recalled that in the 2023 regional elections, Isabel Díaz Ayuso's PP obtained 70 seats and an absolute majority in the Assembly of Madrid (the majority is 68).
  • The same reference indicates that PSOE and Más Madrid obtained 27 seats each in 2023, while Vox had 10 deputies, and Podemos was left out of the Chamber.
  • With these data, the PP governs alone: it does not need investiture support to maintain the regional government.
Galicia and other absolute majorities

An analysis of regional parliamentary activity in Spain points out that in Galicia, as well as in Andalusia and Balearic Islands, "absolute majorities predominate," which indicates:

  • PP regional governments with a very comfortable parliamentary position.
  • In these cases, the PP does not depend on stable investiture pacts with other forces to sustain the Government, although it may occasionally agree on initiatives.
  • The consulted sources do not break down the complete seat distribution by party in Galicia; they only point to that PP absolute majority.

Communities where the PP governs thanks to Vox (coalition or investiture agreement)

Aragon

For Aragon, a fairly precise picture is available after the most recent regional elections:

  • An electoral chronicle on the February 8, 2026 regional elections sets the seat distribution as follows: PP 26, PSOE 18, Vox 14, CHA 6, Aragón Existe 2, IU–Sumar 1.
  • The PP is the most voted force but does not reach an absolute majority in the Aragonese Cortes, so it needs Vox for investiture and governance.
  • Various reports point to a government agreement between PP and Vox, making Vox a key partner in Aragon.
Andalusia

After the latest Andalusian regional elections (May 2026), a relevant change occurred:

  • Juanma Moreno's PP "won the elections again" but lost the absolute majority it had reached in 2022. It obtained 53 seats in a 109-seat Parliament, "two short of the 55 needed to govern alone."
  • Vox achieved 15 seats, so PP + Vox total 68 deputies, above the absolute majority.
  • Investiture and health chronicles report that PP and Vox have signed a "Government and Stability Agreement for Andalusia" that leads to a coalition government and allows Moreno's investiture with votes from both parties.
  • Therefore, the PP governs Andalusia in coalition with Vox, on a clearly majority parliamentary basis.
Balearic Islands

In the Balearics, the PP government also rests on Vox, although starting from a very strong PP majority:

  • A survey recalls that in the 2023 regional elections, Marga Prohens's PP obtained 25 seats and Vox 8 seats in the Balearic Parliament; the absolute majority is set at 30 deputies.
  • Prohens reached the Government "propelled" by Vox, and the PP "needs the far right to govern in the Islands," indicating a investiture and government agreement between PP and Vox.
  • The rest of the seats correspond to left-wing formations, but the cited sources do not detail the exact number of deputies for each party.
Extremadura, Castilla y León, Valencian Community, and Murcia

Several texts (including Vox statements and press analyses) identify a common pattern in these communities:

  • Vox lists Castilla y León, Aragon, Valencian Community, Extremadura, and the Region of Murcia as autonomous communities where there were coalition governments or government agreements with the PP, from which the party decided to withdraw in July 2024.
  • Other regional political analyses confirm that in these communities the PP did not have an absolute majority and that investiture and governance depended on Vox (in the form of coalition or stable parliamentary support).
  • However, the consulted materials do not provide a complete and explicit breakdown of all seats by party in Extremadura, Castilla y León, Valencian Community, or Murcia after their latest elections; only that the PP governs with a simple majority and that Vox is its essential partner.

Conclusion

In summary, the PP governs a majority of Spanish autonomous communities combining two models: absolute majorities in territories like Madrid and Galicia (without needing partners) and coalition or external support governments with Vox in Aragon, Andalusia, Balearics, Extremadura, Castilla y León, Valencian Community, and Murcia. Where sources provide precise numbers (Madrid, Aragon, Andalusia, Balearics), it is clear that the PP is the leading force, but the sum with Vox ensures the parliamentary majority sufficient for investiture and government stability.

Play

Test your knowledge with FREN!

How much do you know about this topic? Answer the following 3 questions.

How many autonomous communities voted in favor of the Government's proposal in the CPFF?

Question 1 of 3

What is the additional amount that the new financing system foresees for the common regime communities in 2027?

Question 2 of 3

Which autonomous communities are excluded from the common system for having their own foral regimes?

Question 3 of 3