Enhancing the Contribution of Business on Islands to Economic Development: A proposal for a Flexible Application of the De Minimis Amount within the State Aid Framework.


This project entailed the development of a position paper which was presented at the INSULEUR General Assembly under the Presidency of the Gozo Business Chamber, held on the Island of Gozo. This paper provides a technical justification for the need of a higher de minimis amount of aid for businesses operating on islands through a study on the additional costs of doing business in islands underpinned by Eurostat data. The approach presented in this paper towards the application of flexibility in relation to the de minimis amount is targeted, as it focuses on businesses that operate in key thematic areas that are the centre of policy objectives at the level of island regional needs and development of the EU as a whole. It is also proportionate as it allows for a maximum budget per island territory in the extent to which the flexibility of the de minimis amount is to be applied. Furthermore, it is efficient as it provides dynamic incentives for reduced dependence on aid through a tapering mechanism, together with increased incentives for the growth of micro firms.