IEB Report

Political Economy

The reform of Autonomous Communities financing

IEB Report 4/2014

The current model for financing Spain’s regions or “autonomous communities” (ACs), the so-called “common” regime, is the result of various agreements reached by the Spanish Fiscal and Financial Policy Council over the last 30 years. This model is structured around three channels for obtaining financial resources: a) a ‘tax mix’; b) an equalization mechanism; and c) three adjustment funds (for further details, see Bassols et al., 2010).