The Government activates 160 million euros to alleviate the economic impact of the Iran war

PalmThe Government has made public its first package of measures to mitigate the economic impact of the war in Iran. The president, Marga Prohens, has detailed that more than 160 million euros will be mobilized with the aim of protecting companies, safeguarding jobs, and preventing price increases from directly affecting the shopping basket of families in the Balearic Islands. The announcement was made after a meeting attended by the ministers of the affected areas, island and municipal representatives, and the main social agents.

Prohens has emphasized that these measures are the result of a diagnostic and listening process with the most affected sectors, combined with institutional coordination and dialogue with parliamentary groups, to whom she has thanked for their collaboration. "The Balearic Islands are among the first communities to activate their own package in response to the international situation," she remarked. The structured plan contemplates five major areas of action, designed to offer a comprehensive response to the consequences of the crisis.

Business liquidity

The Government activates a liquidity support mechanism for companies and the self-employed with a mobilization of 75 million euros in credit lines through ISBA, a public guarantor of business projects. These lines include a public contribution intended to finance 100% of the cost of guarantees and 90% of the interest, with the aim of facilitating access to credit in a context of uncertainty and rising costs.

Direct aid

36.75 million euros are allocated to the most affected sectors:

• Primary sector: 13.5 million to compensate for increased costs in agricultural and fishing diesel, livestock feed, fertilizers, and other inputs, as well as to promote investments and the consumption of local products.
• Transport sector: 9.75 million for freight transport (6 million), discretionary transport and taxis (500,000, including a line for vehicle scrapping).
• Industry, construction and trade: 13.5 million to offset transport and raw material cost overruns, support for exporting companies and a new extraordinary call for commercial and food bonds (3.5 million).

Administrative streamlining

The package incorporates measures to reduce the bureaucratic burden and temporary programs to strengthen management teams with more public staff, with the aim of shortening the resolution times for aid.

Taxation

With an estimated impact of 4 million euros, it includes:

• Restoration of the regional deduction in personal income tax to offset the increased cost of variable-rate mortgages. (2 million euros)
• 50% bonus on port fees for service companies and 100% for professional fishermen, initially until June 30, with the possibility of extension until September 30.

Review of public contracts

45 million euros will be allocated to review prices in public works and services contracts, adapting them to the current price escalation and guaranteeing the viability of the awards. These measures will take into account the double insularity of Menorca and Eivissa and the triple insularity of Formentera.

Prohens has remarked that this is a first package of measures, with expandable amounts depending on the evolution of the conflict. In parallel, the Government is working on new social actions aimed at the most vulnerable groups that will begin to be addressed next week. The island councils have also announced complementary measures within their area of competence.

The Government will claim compensation from the State

The president has announced that the Government will claim additional economic compensation from the State for the Balearic Islands, or partial financing of the package, to take into account the insular reality. “We believe it is a claim that elicits consensus, as all economic sectors in the Balearic Islands agree that state measures are insufficient for our autonomous community, ignoring the insular reality”, she highlighted. Likewise, she said that the measures approved by La Moncloa will have an impact of 40 million on the Government's tax revenue.

The announced package will be processed by decree-law in an extraordinary Governing Council next Wednesday, with the aim of gathering contributions from the stakeholders involved until then. “It is essential to have the capacity to respond in a coordinated and effective manner, through dialogue and consensus, and by providing the necessary resources to prevent this war, which we wish would end now, from affecting the companies and families of the Balearic Islands. And that is what we have done from the Government of the Balearic Islands”, added the president.