The Spanish government has accelerated its proposal to reform the autonomous communities' financing model, aiming to present an advanced offer in the coming weeks that includes more resources for public services. This initiative seeks to appease partners like ERC, who are pressing for progress on Catalonia's singular financing, and to position itself favorably in the 2026 regional elections. Andalucía will benefit from financial improvements and significant debt relief.
The government of Pedro Sánchez has intensified efforts to reform the autonomous communities' financing system, driven by the 2026 electoral cycle and pressure from parliamentary allies. Vice President and Finance Minister María Jesús Montero has stated that the proposal is "very advanced" and will focus on increasing resources for regional public services. This measure responds to the recent electoral setback in Extremadura and aims to center the debate on improving health and education ahead of elections in Aragón, Castilla y León, and Andalucía.
Montero has criticized Andalusian President Juan Manuel Moreno Bonilla for "flirting with copago" and health privatization, while defending that the reform will provide more funds to underfinanced communities like Andalucía, forgoing central government resources. Sources close to the talks estimate the executive will inject about 18 billion euros extra to balance the system, maintaining the status quo for current beneficiary regions, addressing Catalan demands, and rewarding Valencia, Castilla-La Mancha, Murcia, and Andalucía.
The PP, governing 11 communities, opposes pacts with independentists but lacks a united front: the Balearics defend the ordinality principle, rejected by Andalucía. A Fedea report concludes Andalucía has been the worst financed in 20 years, a "sustained grievance," according to spokesperson Carolina España.
Additionally, the government has approved a debt write-off from the Autonomous Liquidity Fund totaling 83.252 billion euros, with Andalucía relieved of 18.791 billion, nearly half its burden. This measure faces PP opposition in Congress and doubts from Junts.
ERC, key for budgets, shows impatience. Oriol Junqueras warns that IRPF management by Catalonia's Tax Agency is "essential" for negotiating budgets with Sánchez and Illa, delayed until 2028. "ERC does not want these negotiations to drag on indefinitely," he said, insisting on respecting ordinality. Both Madrid and Barcelona are extending the 2023 budgets.
