Mallorca’s leader seeks to lift €300,000 EU aid cap

Businesses on Mallorca, in the Balearic Islands, face a €300,000 state-aid cap over three years: regional president Marga Prohens wants Brussels to ease or suspend it to help cover the extra costs of being based on an island. She made the request to European Commission vice-president Teresa Ribera at a meeting in Brussels on 14 October. The Balearic government says the cap leaves island firms at a disadvantage against mainland rivals.

The limit comes from the European Union’s de minimis rule, which caps the state aid a business can receive. The Balearic government says it restricts measures intended to offset island costs, including tax incentives under the islands’ special economic regime. Prohens argues that it also holds back efforts to rebuild industry and diversify the economy.

Higher hydrocarbon prices and international trade tensions could add to those costs, Prohens says. Her government has commissioned PricewaterhouseCoopers to measure the extra burden and gather evidence for its case to European institutions.

According to Prohens, Ribera is willing to consider the request when EU state-aid rules are reviewed in future. No change to the cap has been agreed.

Topics: Economy

Source: Europa Press / Mallorca.com