Brussels, 21/12/2006 (Agence Europe) - On 20 December, the European Commission approved two regional aid schemes for the Canary Islands: the Economic and Fiscal Regime (REF) and the Special Economic Zone (ZEC). These measures are intended to encourage the islands' regional development by enabling companies established in this outlying region to overcome their natural structural handicaps. The fiscal measures, with a combined planned budget of €7.135 million for the period 2007-2013, offer incentives for investment, job creation and the diversification of the regional economic structure. In the normal way of things, such aid would not be allowed under EU state aid rules. Article 299, paragraph 2, of the said treaty recognises, nonetheless, the existence of specific permanent handicaps affecting the most outlying regions: remoteness, insularity, smallness of size, difficult topography and climate, and economic dependence on a small number of products.
The Commission's examination of the REF and the ZEC showed that they are eligible for exemption, since the aid is targeted at specific handicaps of the Canary Islands and is proportionate to the additional costs resulting from these handicaps. Moreover, as Competition Commissioner Neelie Kroes said, these measures “have proved in the past to be stimulating for regional development”. (cd)