Spain’s autonomous communities are relying less on cheap loans from the central government and more on private financing. The amount allocated through the state’s extraordinary liquidity mechanisms has fallen to its lowest level since the schemes began in 2012, while regional borrowing from markets has risen by almost 30% compared with 2025, according to figures from the Finance Ministry and data provided by Analistas Financieros Internacionales (Afi).
The government has made €22.779 billion available through the mechanisms in 2026, down from nearly €25 billion last year and well below the €38.667 billion allocated in 2020. Including other liquidity measures that have since ended, the overall peak was €49.12 billion in 2012. These loans were introduced during the sovereign debt crisis to help regions facing steep borrowing costs, but became a regular financing channel over time.
Meanwhile, regional governments have raised more than €15.29 billion in markets this year. Madrid and Andalusia account for roughly half of that amount, with €3.823 billion and €3.819 billion respectively. Market funding represents 40% of the nearly €38 billion the regions needed this year, mostly to meet maturing debt payments, compared with 26% in 2024.
Andalusia moved to market-only borrowing in 2026, joining Madrid, Galicia, Castile and León, Asturias, Navarre and the Basque Country. Castile-La Mancha, the Balearic Islands, Aragon, Extremadura, Cantabria and La Rioja have also begun combining private financing with state-backed loans after previously relying exclusively on the extraordinary mechanisms.
The shift follows changes to the rules governing access to the mechanisms. Last year, the government restricted access to the Regional Liquidity Fund (FLA), leaving the less restrictive Financial Facility available, while loosening conditions for regions seeking to borrow on markets. In 2026, the criteria were further relaxed, allowing regions without a deficit and with debt below 19.5% of GDP to use both channels. Catalonia, the Valencian Community and Murcia do not meet that threshold and were limited to market borrowing of up to 10% of their annual financing needs.
Catalonia and the Valencian Community remain the largest recipients of state loans. Together, they received almost 80% of the €22.779 billion allocated in 2026: €9.216 billion for Catalonia and €8.717 billion for the Valencian Community. Their high debt burdens, along with Murcia’s, also make it more difficult for them to issue new debt on markets.
Analysts cited in the report expect market borrowing to continue growing, in line with regional debt plans. S&P Global Ratings describes the move toward markets as a sign that regional financing is becoming more normalized. Afi says borrowing conditions have so far remained receptive, though it notes that higher interest rates could make the environment less favorable than in recent years.
Since 2012, regional governments have received more than half a trillion euros through the extraordinary mechanisms and other liquidity measures, mainly to cover debt maturities, finance deficits and pay suppliers. Future financing is likely to vary by region, depending on funding needs, investor appetite and the terms available in markets compared with state-backed loans.
Sources: El País Economía.