INSULEUR has always been a fervent defender of the abolition of the ‘de minimis’ aid ceilings for European islands. These have however remained horizontally applied and unchanged since 2006, setting the de minimis general threshold at 200.000 EUR for all businesses.
Considering that
- De minimis aid is considered to be one of the best instruments to meet the needs of islands;
- the implementation of European policies is more expensive in the island territories than on the mainland;
- access to the islands is limited to transport by sea and for some of them also by air; the additional transport costs therefore have a real impact on island businesses that can hardly be competitive with companies from the mainland when these additional costs related to insularity are included in the calculation of de minimis aids;
- any support under the de minimis rules hinders islands’ ability to apply for other funds being administered under the same state aid regime.
INSULEUR reminds that
- the current de minimis rule restricts competitiveness and raises difficulties in European islands;
- it increases the development deficit of European Islands compared to mainland Europe, putting them into a disadvantaged position;
- the de minimis regime should fulfil its essential function as a regulator and limiter of possible market distortions without distorting the pursuit of the objectives of the union: “the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion. In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions, such us island regions” (Article 174 TFEU)
INSULEUR therefore fully supports
- AT MINIMUM, the increase of the current ‘de minimis’ aid ceilings from 200.000 EUR to 500.000 EUR, taking into account the current and future inflationary trends and the need of further development of the European economy which is heavily affected by the energy crisis and the restructuring of logistics.
- The creation of a mandatory central register that would not only increase transparency and lower administrative burden.
And requests in addition that
- a more flexible de minimis aid threshold in island territories is applied: additional transport costs related to insularity should not be included in the calculation of de minimis aids or, as a last resort, calls for the further raising of the de minimis threshold for businesses in islands to 800.000EUR.
- the mandatory central register also serves as a basis for an impact assessments based on specific indicators to further reveal and better palliate the lagging competitiveness of island region economies.
To conclude, INSULEUR believes that raising the de minimis general threshold would allow the EU to reflect the general price development and react to the spike in the inflation rate in line with current market conditions, foster economic growth and job creation, and incentivise innovation but insists on the fact that without flexibility for island territories the root problem – that of a state aid regulatory framework which does not cater for the specificities of islands – remains, and if this is not tackled islands can never be put at par with business on the mainland.