Business leaders skeptical of the financing model: "The Islands will continue to pay much more than we receive."

Palm"In the Balearic Islands, we're burdened with an unbearable public deficit, regardless of who governs here or in Madrid," states Jordi Mora, president of the small and medium-sized businesses of Mallorca (PIMEM), bluntly. This statement encapsulates the frustration of being the second-largest contributor to the central government and receiving the least, second only to Madrid, and seeing that things won't change much with the new funding model. Despite business skepticism, Mora has also said recently that pessimism is a mistake because "this proposal provides more resources and will improve public services, and opens the door to bilateral negotiations. Therefore, the Balearic government can still improve it." But while the fine print of the central government's proposal is still pending, business leaders are quite clear that, even if Madrid distributes more millions, the balance between contributions and receipts will be against the interests of the islanders. "It's hard to imagine this changing in the short term. We'll continue paying far more than we receive," says Toni Garí, an industrial entrepreneur and member of the manufacturers' association Construïm. Business owners in the Balearic Islands have been warning for years that the regional financing system doesn't reflect the economic reality of an island territory. Now, with negotiations for a new model underway, the business sector is once again focusing on a problem they consider structural: the Balearic Islands contribute significantly to the central government, but don't receive enough resources to compensate for the additional costs of operating in a fragmented territory disconnected from the mainland.

Employers' associations, economic circles, and business groups agree on the diagnosis: the current model has thus far failed to consider either the geography or the real pressure on the Balearic economy, defined by the government as "supported population," a concept coined by Alexandre Forcades in the 1990s when he was Minister of Economy under Gabriel. Business activity is marked by dependence on maritime and air transport and the associated surcharges, "which can reach 15 or 20 percent depending on the material and the time," states Sandra Verger, manager of the Construction Association.

The problem has deep roots. The Islands are a paradise that functions as a tourist attraction and a source of revenue for the State. "But then it turns out that we have no capacity to support entrepreneurs, or we lack the capacity to promote public mechanisms for obtaining industrial land, as other regions do," laments Toni Garí. This businessman denounces the situation: "Those of us who want to build industry suffer from this neglect and see how raw materials cost us 20% more because we have to transport them. Exporting is practically a pipe dream," he concludes.

For all these reasons, business owners criticize the fact that Madrid's high tax revenue in the Canary Islands, linked primarily to tourism, is not reflected in a proportional return in the form of investments, infrastructure, and public services. "We're very envious of how businesses in the Basque Country have the equipment to carry out tests, research, trials with materials, solutions... Here, if you need to do any of that, you have to pay for it out of your own pocket," says Garí, which means that "research is simply nonexistent, or the work of a few enthusiasts," he laments.

On the other hand, Sandra Verger, spokesperson for the construction industry, wants to remind everyone that "among the needs that Balearic businesses have for improved financing, we find, for example, the acquisition of materials. A large part of the materials come from the mainland, which represents a huge additional cost due to the islands' isolation. How are we supposed to build affordable housing?"