Almost one in three euros back: how the Canary Islands give away €22 million in EU innovation funding

It's a story that defies logic. The Canary Islands have complained for years about too little money from Madrid and the EU. And then this: the regional government has to repay €22.4 million in EU funding because it couldn't spend it.

The money comes from the EU's Next Generation programme — the huge post-pandemic recovery package meant to drive research, digitalisation and innovation. The Ministry for Universities, Science and Innovation (Migdalia Machín, Coalición Canaria) had been allocated €73.5 million. Of that, €22.4 million — 30.5% — is now going back to Brussels.

Repaid with interest

The bitter part: €5.8 million was already returned in 2025 — with interest. So Canary Islands taxpayers are not only paying back research money, they are paying extra. A further €16.6 million is earmarked for 2026. If the administration fails to account for everything by 31 August 2026, it gets even bigger.

The matter came to light through a parliamentary question from MP Carmen Hernández (Nueva Canarias) in the regional parliament. For the opposition it is «a scandal»: money meant to drive the islands' economic diversification — away from the tourism monoculture — is going unused.

Not just the innovation ministry

The €22.4 million is just a slice. The Canary Islands were allocated €1.727 billion in Next Generation funds overall. By the end of 2025 only just over half had been spent, with €53.8 million already repaid. Depending on the calculation, between €378 and €528 million risk being returned unused — 22 to 30% of the total allocation. Finance Councillor Matilde Asián (PP) is more optimistic, but concedes a likely execution rate of only around 67%.

Why doesn't it work?

The uncomfortable answer has nothing to do with too little money. On the contrary: per capita, the Canary Islands received €802 in innovation funding — more than the Spanish average (€590). The problem is execution. Next Generation funds come with strict conditions: tenders, deadlines, accounting. Whoever can't get the bureaucracy moving loses the money. And that's exactly where it sticks: weak administrative capacity and too few research-intensive companies able to handle big innovation projects.

The political dimension

This is where it gets awkward. The regional government has argued for years that Madrid under-supplies the Canary Islands. When a region claims that — and at the same time hands back almost a third of the money it already has — its credibility wobbles. Tellingly, the Canary Islands government is now asking Madrid for an extension of the deadline — that is, the very central government it otherwise criticises.

What it means for residents

No immediate consequences for daily life — no tax rises, no service cuts because of it. But it is a missed opportunity: these millions were meant to broaden the Canary Islands' economy, away from tourism. The money was there. It went back. And in the case of the €5.8 million already returned, taxpayers even pay interest for the privilege of not having used it.