Prohens Outlines €125.25 Million Economic Package for the Balearic Islands in 2027

10. November 2026

The Balearic Islands Government is preparing a second economic package worth €125.25 million for 2027, with measures aimed at helping businesses, self-employed workers and sectors affected by rising costs. President Marga Prohens outlined the proposal on 9 November following a meeting in Palma with representatives of business organisations, trade unions and several productive sectors.

The package is intended to address the economic impact of rising prices, which the Govern attributes to the conflict in the Middle East and its effects on energy, fuel, transport and production costs. The measures are expected to begin at the start of 2027.

The announcement follows an earlier economic support package approved in April. However, the new proposal is not made up entirely of direct grants. It combines financing facilities, sector-specific subsidies, tax measures and funding to review public works contract prices.

€50 Million for Business Financing and Liquidity

The largest allocation is €50 million to facilitate financing and liquidity for companies and self-employed workers.

The aim is to help businesses manage increased operating costs and maintain their financial capacity during a period of economic uncertainty. The Govern has not yet published the detailed conditions, eligibility criteria or application process for this new funding.

A further €25.25 million is planned for direct grants to sectors considered particularly exposed to rising production and operating costs.

The proposed distribution is:

  • €10 million for the primary sector, including agriculture, livestock and fishing.

  • €7.6 million for transport.

  • €7.65 million for industry, construction and commerce.

The Govern says the design of these grants will take account of the double and triple insularity affecting the Balearic Islands, an important consideration for businesses operating in Ibiza and Formentera.

Tax Measures and €45 Million for Public Works

The proposed package also includes measures with an estimated combined fiscal impact of €5 million.

These include extending into 2027 the regional tax deduction associated with variable-rate mortgage loans and credits, as well as maintaining reductions in Ports IB fees for economic activities and fishermen.

Another €45 million is earmarked for reviewing prices in public works contracts. The measure is intended to address increased construction and material costs, helping ensure that public projects can proceed rather than being delayed or left uncompleted because of rising expenses.

The funding for public works is therefore distinct from direct grants to businesses and households. It is intended to support the continuation of public investment.

What the Announcement Means for Ibiza and Formentera

Businesses in Ibiza and Formentera are among those potentially affected by the measures, particularly in sectors such as transport, construction, commerce, agriculture and fishing.

However, the Govern has not yet specified how much of the €125.25 million will be allocated to the Pityusic Islands. The precise distribution, application requirements and timetable for individual grants remain to be announced.

The commitment to consider double and triple insularity is relevant to the islands, where transport and supply costs can place additional pressure on businesses. The practical impact will depend on how the future funding schemes are designed and implemented.

For now, the announcement should be understood as a proposed package for 2027, rather than a set of grants already open for applications.

More Than €300 Million Across Previous and New Measures

The second economic package builds on the first set of measures approved by the Govern in April 2026, which mobilised €160.75 million through financing facilities, direct grants, tax measures and mechanisms to review public contract prices.

According to the regional government, €9 million in direct grants for industry, construction and commerce from the first package has already been paid. More than €9 million for transport has been paid or processed, while €12.5 million for the primary sector remains at different stages of payment processing.

The Govern also reports €15.3 million in separate social measures intended to support vulnerable families and reinforce services relating to food, energy, housing and childcare. These measures include support for basic needs, municipal social services, third-sector organisations and residential resources.

Combining the first economic package, the proposed second package and the separate social measures brings the total to approximately €301.3 million.

Business Groups and Trade Unions Call for Effective Support

The announcement has received a mixed response from business organisations and trade unions.

The Balearic business confederation CAEB has welcomed the additional economic support. However, its representatives have stressed the importance of ensuring that the measures are implemented efficiently and reach businesses without unnecessary administrative delays.

José Antonio Roselló, CAEB's representative in Ibiza and Formentera, said the budgetary measures were welcome but noted that the practical application of the new initiatives still needed clarification.

Trade unions have raised concerns that the package does not go far enough in addressing the financial pressures facing working households. Among their demands are continued free public transport for residents throughout 2027 and further action to help people cope with housing and rental costs.

The discussion highlights the difference between support directed towards businesses and measures that provide direct relief to households.

The €125.25 million package is expected to come into effect at the beginning of 2027. Its impact on Ibiza and Formentera will become clearer once the funding distribution, eligibility requirements and individual application procedures are published.

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