Hacienda Minister María Jesús Montero has announced a new regional financing model injecting 21,000 million euros annually to the communities, following a pact with ERC. The system ensures ordinality for Catalonia and reduces financing gaps between regions. The PP rejects the proposal, while internal PSOE criticisms emerge.
On Friday, January 9, 2026, First Vice President and Finance Minister María Jesús Montero presented the proposed reform of the regional financing system, pending since 2014. The model entails an annual injection of 20,975 million euros in 2027, totaling 224,507 million distributed among the communities. The bulk of these additional funds, about 16,000 million, comes from increased tax cessions: IRPF rises to 55% and VAT to 56.5%, also incorporating 100% of taxes like patrimony, bank deposits, gaming activities, and waste.
The proposal stems from a bilateral agreement between President Pedro Sánchez and ERC leader Oriol Junqueras, sealed the previous Thursday at La Moncloa. Junqueras emphasized that 'everyone wins and no one loses,' with Catalonia receiving 4,686 million extra, ensuring the ordinality principle: as the third community in contributions, it will be third in fund receipts. Montero clarified that this ordinality applies only to Catalonia, not Madrid, the largest contributor, which will receive 2,555 million more.
Andalucía leads absolute gains with 4,846 million additional, followed by Catalonia and the Valencian Community (3,669 million). The model reduces the per adjusted inhabitant financing gap from 1,500 euros currently to 700 euros, via horizontal leveling (among communities) and vertical (State-autonomies). It includes a 1,000 million climate fund, with two-thirds for Mediterranean communities, and a statu quo clause so no region loses resources, compensating Cantabria and Extremadura.
Reactions have been mixed. Within the PSOE, there is unease over Catalonia's 'preferential treatment,' with Castilla-La Mancha President Emiliano García-Page calling it an 'outrage' and demanding early elections: 'Before independents decide how Spain's wealth is distributed, I prefer Spaniards to speak.' In Andalucía and Aragón, PSOE leaders like Montero and Pilar Alegría defend the benefits but admit challenges in countering the image of concessions to separatism.
The PP rejects the model en bloc. Deputy Secretary Elías Bendodo stated: 'You can't negotiate with one what belongs to all.' Presidents like Juan Manuel Moreno Bonilla in Andalucía and Jorge Azcón in Aragón criticize ordinality and threaten to challenge it before the Constitutional Court. In Valencia, Juanfran Pérez Llorca will study the proposal 'in depth,' despite the 3,669 million extra, demanding immediate leveling funds and citing historical debts.
Montero urged the PP to support the system, noting that 70% of extra funds benefit their communities: 'It would be useless to put 21,000 million on the table if they go to private initiative due to Feijóo's privatizing interest.' The next step is the Fiscal and Financial Policy Council on Wednesday, followed by bilaterals and congressional processing as an organic law.
