From mortgages to the primary sector: this is how the government's 160 million will be distributed due to the price crisis

PalmThe Government has approved this Friday the decree-law to allocate 160.75 million euros to alleviate the economic effects that the war in Iran has on the Balearic Islands. A measure that complements those that the Spanish government has already approved and which will represent 70 million euros more for the Islands. From tax deductions for mortgage holders to subsidies for affected sectors, the first vice-president and Minister of Economy, Antoni Costa, has explained how these resources will be allocated.

75 million in credit lines

A liquidity support mechanism for self-employed businesses is activated, consisting of the mobilization of 75 million euros in credit lines, through the financial entity ISBA.

36.7 million in direct aid to sectors

The package includes 36.7 million euros in aid directed at the economic sectors most affected by the price increase caused by the war. According to Costa, the aid will take into account the double insularity of Menorca and Ibiza and the triple insularity of Formentera. In this package, 13.5 million euros will be allocated to the primary sector, and 5 million euros to agricultural processing. In addition, 750,000 euros, which can be extended, are allocated to the increased cost of agricultural and fishing diesel, as well as 3.5 million to the increased cost of livestock feed, 1.5 million to fertilizers, and one million to other agricultural inputs. Furthermore, one million euros will be allocated to a new call for vouchers to promote local products.

9.75 million in transport aid

9.75 million euros will be allocated to aid for the transport sector. Of these, six million will go to compensate for the extra cost of freight transport and distribution. In addition, 750,000 euros are allocated to discretionary transport, 500,000 to the taxi sector, and 2.5 million euros to the scrapping of non-private transport vehicles.

13.5 million for industry

Direct aid will be provided to industry, construction, and commerce worth 13.5 million euros. These are expandable items, as Costa has said. Eight million will be allocated to self-employed individuals and SMEs, and construction, to compensate for the increased cost of fuel and the rise in raw material prices. Furthermore, two million euros will be allocated to compensate for the transport cost increase for exporting industrial companies. Additionally, 3.5 million euros will be allocated to the extraordinary call for commercial and food vouchers.

"Massive" use of the responsible declaration

Costa has also put on the table a series of administrative streamlining and simplification mechanisms to speed up the distribution of resources. "It was a clamor in the meeting with the sector," he insisted. Thus, he said that the aid will be made through a "massive use of the responsible declaration" (which reduces administrative controls), and payments will be made through advances "so that they arrive quickly." "In two months, the counselors must have issued the calls that correspond to them and we will make the payments as quickly as possible," he said. In this regard, the decree-law includes temporary programs to incorporate public personnel for the management of these direct aids.

Fiscal measures

In fiscal matters, the Government plans to invest a total of four million euros, two through the IRPF deduction for taxpayers with variable mortgages who experience an increase in their installment due to the rise in Euribor. "A deduction that was already made in 2022, 2023, and 2024 due to the war in Ukraine is being recovered," the counselor stated. Two million euros will also be allocated to the reduction of port fees, 50% for maritime service companies, and 100% for fishermen.

In the same vein, Costa highlighted that "none of the aid will be taxed under personal income tax." "We have approved an IRPF deduction, so that the taxation of any aid received is nullified," he explained.

Public tenders, at risk

"Construction companies announced that much public works will be paralyzed by the impact of construction costs," explained the first vice president. "This could imply, for example, that the tenders for a significant part of the public housing that the Government wants to build could be left deserted," he said. However, he lamented that the State Contracts Law is "enormously restrictive" and does not allow the regional Executive to review the prices of the tenders. "I want to publicly ask the State to carry out an extraordinary review of the Contracts Law, because in an extraordinary situation, public administrations can carry out an extraordinary price review," he expressed.