The Govern of the Balearic Islands has announced the mobilisation of more than 160 million euros to address the economic effects arising from the conflict in the Middle East. The package of measures, presented to social partners, economic sectors, island councils and local authorities, aims to protect the business fabric, safeguard jobs and prevent rising costs from driving up grocery prices.
President of the Government, Margalida Prohens, during the presentation of the package of measures to social partners, economic sectors, island councils and local authorities. Photo: CAIB.
The President, Marga Prohens, said that this plan is the result of dialogue with the affected sectors and places the Balearic Islands among the first regions to activate their own measures in response to the international situation.
Five pillars to support the Balearic economy
The plan is structured around five main blocks combining liquidity, direct aid and structural measures.
Firstly, 75 million euros in credit lines through ISBA will be activated for companies and self-employed workers. These lines will cover 100% of guarantee costs and 90% of interest payments, making access to finance easier in a climate of uncertainty.
The second block includes 36.75 million euros in direct aid for the sectors most affected. Of this amount, 13.5 million euros will go to the primary sector to offset rising costs in fuel, animal feed and fertilisers, as well as to encourage the consumption of local produce.
A further 9.75 million euros will go to transport, including freight, discretionary transport and taxis, as well as a specific line for the scrapping of vehicles. The remaining 13.5 million euros will be allocated to industry, construction and trade, with measures to offset the rising cost of raw materials and transport, along with a new round of shopping and food vouchers.
Administrative streamlining and tax measures
The Government is also introducing measures to speed up the processing of aid, through regulatory changes and reinforced public staffing, with the aim of shortening decision times.
In the tax sphere, the estimated impact amounts to 4 million euros. Among the measures is the reinstatement of the regional income tax deduction to offset rising variable-rate mortgage costs.
In addition, a 50% reduction in port charges will apply to service companies, and a 100% reduction to professional fishers, initially until 30 June, with the possibility of an extension.
Review of public contracts and attention to insularity
The plan includes an allocation of 45 million euros for the revision of prices in public works and service contracts, with the aim of adapting them to rising costs and ensuring their viability.
All measures will take into account the double insularity of Menorca and Ibiza, as well as the triple insularity of Formentera.
Call for greater support from the State
The President announced that the Government will request additional financial compensation or partial funding of the package from the central Government, as it considers the State measures insufficient for an island region.
The plan will be approved by decree law at an extraordinary meeting of the Council of Government next Wednesday, with the intention of incorporating further contributions until then.
Prohens stressed that this is a first package, which may be expanded depending on the evolution of the conflict, and announced that work is already under way on new social measures aimed at the most vulnerable groups.
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