Canary Islands secures 1,337 million euros in financing deal and sidesteps PP veto

Deal secures 1,337 million euros extra annually

Fernando Clavijo, president of the Canary Islands and member of Coalición Canaria (CC), announced Monday in Las Palmas de Gran Canaria that the archipelago has reached an agreement with the Spanish government on the new autonomous financing model. Under the deal, the Canary Islands will receive approximately 1,337 million euros each year in additional resources for essential services. The package divides into 611 million euros from the main financing system and another 726 million euros through the newly created Fondo de Dinamismo Económico, alongside three complementary guarantees designed to protect the islands' fiscal singularities. Clavijo, who had described the negotiations as intense over several months, called the outcome highly positive.

REF excluded from the financing calculation

A central demand of the Canary Islands government was that the Régimen Económico y Fiscal (REF), the special economic and fiscal regime created to offset the disadvantages of remoteness and insularity, should not be counted as part of the ordinary financing that pays for hospitals, schools and social services. The written agreement confirms that the REF will remain outside the system for the first time in history. Clavijo underlined the breakthrough:

The REF compensates for our inequalities, but does not finance health, education or social services. For the first time in history, it is written that this is outside the financing system.

The deal also resolves the compensation linked to the old IGTE tax, ensuring that these resources tied to the islands' singularity are not absorbed into common financing. Additionally, the model adjusts the weighting of the insularity factor and population calculations, with any negative impact compensated through the Fondo de Dinamismo.

The PP obstacle and a strategic vacation

The PP national leadership, under Alberto Núñez Feijóo, has instructed all PP-led regional governments to vote against the financing model in the Consejo de Política Fiscal y Financiera (CPFF) on Wednesday. In the Canary Islands, the finance minister Matilde Asián belongs to the PP and would face the dilemma of obeying her party or supporting a deal that brings over 1,300 million euros to the region. To resolve this, she has decided to take a few days of vacation, allowing her absence to be justified and leaving the vote to the presidency minister, Nieves Lady Barreto of CC. President Clavijo signed a substitution decree to formalize the arrangement. No other PP councillors in the Canary Islands executive, including vice-president Manuel Domínguez, have taken similar leave, so the rest of the PP block will remain silent, effectively allowing CC to cast the favourable vote on behalf of the government.

Reactions and the Wednesday vote

Finance minister Arcadi España, who met with Clavijo alongside territorial policy minister Ángel Víctor Torres, drew a contrast with other PP-governed communities.

The Canary Islands has wanted to sit down and negotiate. It has not asked for impossible things nor for things that harm other autonomous communities.

Clavijo noted that some communities, such as Valencia, stand to gain 3,600 million euros more and would no longer be the worst-funded region. The agreement now moves to the CPFF on Wednesday, where the Canary Islands vote is assured despite the national PP's opposition, exposing a fracture within the party over the financing overhaul. Clavijo linked the deal to the broader Agenda Canaria commitments tied to the investiture of Pedro Sánchez.