The Treasury has called the Fiscal Policy Council meeting on Monday without a financing model.

MadridA date has been set. The Spanish government has called a meeting of the Fiscal and Financial Policy Council (CPFF) for next Monday with all the autonomous communities under the common regime, although without a regional financing model on the table. The PSOE and Esquerra have agreed to allow more time to finalize the new system, and although sources at the Ministry of Finance confirm to ARA that the financing system will be one of the agenda items, they explain that it will be a generic point. In fact, the agenda for the meeting with the autonomous communities simply proposes addressing "the current status of the reform of the regional financing system." "A finalized and complete model is not expected to be presented," sources at the Ministry of Finance indicate.

The meeting with the autonomous communities will also serve to convey deficit and debt targets for the autonomous communities for 2026, a key element for the preparation of regional budgets. The ministry headed by María Jesús Montero (PSOE) has summoned the autonomous communities next Monday at 12 noon to discuss the spending limits they will have for the next fiscal year, as has been previously reported. Catalonia Radio Morning Show And sources at the Treasury have confirmed to ARA, as well as the resources they will have.

What will Junts do this time?

The last proposal put forward by the Ministry of Finance dates back to 2024 and envisioned a deficit target for the autonomous communities of 0.1% of GDP. However, that proposal ultimately fell apart because Junts voted against it in the Congress of Deputies. Carles Puigdemont's party demanded greater spending leeway for the autonomous communities—in other words, a more flexible deficit target—and less leeway for the central government. The Ministry of Finance will face the vote again, but in a more complicated context marked by the rupture between Junts and the PSOE. Setting these targets also means that the Spanish government has already established a path to stability—deficit, debt, and spending rule targets for all public administrations—and a spending ceiling for 2026. Approving both is an essential step for the drafting and presentation of a new budget, as promised by Pedro Sánchez. The idea would be to approve it at the Council of Ministers meeting next Tuesday, the day after the Fiscal and Financial Policy Council (CPFF), although this is not yet decided, according to government sources. It should be remembered that the Spanish government is still operating with the extended 2023 budget and has not presented any draft budget proposal since then. In 2024, looking ahead to the 2025 budget, a record spending ceiling of €195.353 billion, not including European funds, was proposed, but it never materialized. Looking ahead to 2026, the Spanish government is expected to propose expansionary spending, especially considering pension expenditures, but also the need to spend more on defense. Talks on financing continue.

However, Esquerra Republicana (ERC) and the Socialist Party (PSOE) are giving themselves more time to negotiate the financing model. The truth is that the Republicans had asked the Minister of Finance not to address the system yet in this forum, as they didn't see it as possible to reach an agreement before it was held. Furthermore, Oriol Junqueras's party was worried that the PP-governed autonomous communities would demand that Montero explain her plans in detail.

Where do the talks stand? As explained by ARA, the negotiators are now focused on agreeing on the common financing system and have postponed tax collection in Catalonia, since the PSOE is resisting ceding this power. To avoid stalling the talks, Esquerra decided this week to postpone until January the debate in Congress on the proposed law to transfer personal income tax (IRPF) collection to the Catalan Tax Agency.

Sources consulted by ARA explain that progress is being made on the numbers. While this newspaper reported a few weeks ago that the problem was the lack of respect for ordinality and the calculation of the adjusted population, the same sources assure that positions have been brought closer. Different models are being worked on, but above all, efforts are being made to reconcile the interests of the PSOE (Spanish Socialist Workers' Party) as well as those of Esquerra Republicana (ERC) and the PSC (Socialist Party of Catalonia), which are currently aligned. According to the Treasury's calculations, with the new model, Catalonia would gain between 4.5 and 5 billion euros more, although ordinality would not be guaranteed. Andalusia would also be one of the regions that would benefit the most, while the Community of Madrid would gain less than the average. One of the negotiators' objectives, in fact, is to take into account the fiscal responsibility of the regions when distributing resources and to ensure that, for example, lowering taxes, as Isabel Díaz Ayuso is doing in Madrid, is detrimental. Furthermore, the region benefits from being the capital city.

The elections in Extremadura

Another point that altered the planned schedule is the calling of elections in Extremadura on December 21st. This means that Montero has to consider how this region fares under the new model so as not to harm the Socialist candidate in the elections, Miguel Ángel Gallardo. Will the pact between the PSOE and Esquerra then be before or after these elections? One source ironically suggests it will depend on the final amount of funding allocated to each region. With this change to the schedule, there is a side effect: the negotiation of the Catalan government's budget is also delayed. Esquerra has stated that it will not sit down with Salvador Illa's team until a financing agreement is finalized with María Jesús Montero. If this doesn't happen until the end of the year or in January—"there are still weeks to go," say sources familiar with the matter—it means that at least the Catalan budget will be approved in the spring.