Cohesion Policy

Cohesion Policy is the main EU investment policy and represents a unique instrument to achieve the overall harmonious economic, social, territorial development and reduce disparities across all EU regions.

In this context, Article 174 of the Treaty of the Functioning of the EU (TFUE) underlines the need to pay “particular attention” to territories beset by severe and permanent natural or demographic handicaps. Yet, despite these provisions, it appears that island territories are not duly treated as areas suffering from serious handicaps under Cohesion Policy and the insular dimension of territorial disparities is often neglected.

In its work, therefore, the Islands Commission insists on the necessity to exhaustively apply Article 174 of the TFUE, effectively addressing structural geographical constraints and specific needs that hinder islands’ development, so that no region is left behind.

The Islands Commission also urges the EU Institutions a forward-looking, holistic and place-based approach to the specificities and needs of island territories, including archipelagos, peripheral and outermost regions. In this sense, it advocates for the development of a long-term EU Strategy for Islands, ensuring the adequate integration of an insular perspective and related territorial proofing in the EU legislative process and policies of high relevance.

State Aid

The issue of competitiveness and attractiveness in islands is also key for their economic, social, territorial development and it is strictly linked to the availability and use of state aid, all the more in the face of the recent global crisis and challenges related to their twin transition.

Island territories are indeed extremely dependent on maritime and air transport which generates additional costs and places them in a structurally disadvantaged position compared to the mainland. Furthermore, the absence of economies of scale highly affects the offer of goods and services in island markets.

For these reasons, the Islands Commission asks that state aid rules at EU level are further adapted to the specific context of these territories, bearing in mind these additional operating costs deriving from insularity. To this end, it calls notably for greater flexibility in the use of state aid, as well as horizontal provisions and a legal specially designed and broader approach in related EU legislation (e.g. in regional aids, de minimis, GBER, among others).