Today, the Minister for Gozo, Dr Anton Refalo attended the 36th CPMR Islands Commission Annual General Meeting in Rhodes, Greece.

The CPMR Islands Commission, which represents 23 island member-regions, advocates for the inclusion of island interests and needs in EU policies.

The Minister for Gozo delivered an address during a session dedicated to State Aid. He referred to the commitment in Article 174 of the Treaty on the Functioning of the European Union to ensure economic, social and territorial cohesion across the European Union.

He however expressed concerns as to whether the various EU laws, particularly those on State Aid, are indeed acknowledging and catering for the permanent geographic handicaps faced by islands.

Referring to Gozo's double insularity and its lack of international transportation nodes via air or sea, Minister Refalo highlighted the additional costs, administrative burden and time delays involved in the handling of goods and raw materials, compared to production facilities in Malta, thus impacting negatively on the operator's competitiveness.

The Minister explained that various infrastructure development measures and improvements to the business environment and workforce training have been undertaken by Government, however these alone are not sufficient to attract investment to the island. State aid is therefore essential to act as an incentive.

He also underlined that de minimis aid is not always good, nor appropriate to effectively mitigate this situation.

Minister Refalo stressed the importance of basing the eligibility of islands like Gozo to types and levels of state aid, according to their specific characteristics and economic fabric, otherwise their economic development will continue to lag behind.

As an immediate solution to address this reality, the Minister stated that islands should be allowed to grant aid intensity bonuses over the established normal Regional Aid ceilings.

Moreover, he said, supporting transport costs between islands within the same island Member State also needs to be considered and a system of direct aid in support of businesses established in such places should be allowed, to compensate for the additional transport costs.

The Minister for Gozo concluded his intervention by saying that State Aid can be the instrument that addresses the permanent geographic realities of islands but these territories should be given greater attention and additional flexibility to ensure that a level playing field is attained in their regard.

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