MEPs ask EU to relax state aid rules for islands like Malta after coronavirus crisis

Labour MEPs join call to European Commission to relax state aid rules for island-economies that are dependent on tourism and air travel

Islands are experiencing an economic decline in comparison with other regions, due to their dependence on tourism
Islands are experiencing an economic decline in comparison with other regions, due to their dependence on tourism

Labour MEPs have joined a call by other European colleagues demanding that the European Commission allows island-nations like Malta to retain relaxed state aid allowances currently in place to fight the coronavirus’s impact on the economy.

Alex Agius Saliba, Josianne Cutajar, and Alfred Sant joined a call from MEPs hailing from island economies that are dependent on tourism, asking that once the crisis passes, some of the relaxed state aid rules stay in place for island regions, as they would help to overcome the competitive disadvantage caused by insularity for island industries.

“Our regions are both much more fragile and much more impacted by the COVID-19 crisis. Each island territory is threatened with general economic collapse,” the MEPs, which form part of an intergroup of members hailing from islands (SEARICA), said. “We call for, in addition to the first measures already adopted for all the European regions impacted by COVID-19, specific emergency measures and a reinforced and adapted solidarity mechanism to prevent, and limit, the major economic crisis looming in the EU islands.”

The MEPs said the health crisis hitting Europe will generate a very serious economic crisis, especially for islands experiencing an economic decline in comparison with other regions, due to their dependence on tourism.

“Tourism is the economic activity that will be most affected by the consequences of the pandemic, since it is, for the islands, entirely dependent on air and maritime transport - which are totally at a standstill and will most probably remain so for the next several months before total deconfinement in Europe.

“As a result, tourism will be the last economic activity that can be revived, and it is not certain that this will happen before the end of the summer. A “white season” for tourism would be an insurmountable crisis for all island territories if reinforced solidarity mechanisms are not implemented.”

The MEPs said that in “proximity tourism” areas, within reach of private cars, companies can hope for a gradual recovery as soon as the confinement is eased. However, islands are by definition dependent for their tourism on maritime and especially air transport.

“Our island economies are proportionally much more dependent on tourism than all other regional economies. This ‘endemic’ fragility must be taken into account in the solidarity mechanisms that the Member States, with the support of European funds, will implement. However, during this global emergency we ask to preserve and maintain unused funds already earmarked for the islands from the 2014/2020 budget. In particular, transferring sums of money to other regions more affected by coronavirus but better equipped in terms of infrastructure and developed industrial network should be avoided,” the MEPs said.

The group also said the EU had to consider that islands’ supplies very often depend on a single company that the crisis could precipitate into bankruptcy “All this must be taken into account in the decisions that the European Commission and the Member States will take in the context of the emergency funds that will be mobilised. All public services are to be closely monitored: airlines, fuel supplies, health facilities, etc.”

The MEPs added in a post-scriptum that certain islands in the Mediterranean were coping with an influx of migration which they claimed “affects the normal development of their welfare systems… We need to also factor a solution to this concern in the policies that must be devised to provide meaningful support to islands.”

The other MEPs hailed from Spain, Italy, Cyprus, France, Croatia, and Finland.

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