The President of the Government, Pedro Sánchez, has announced that Spain will request Brussels to consider Ceuta and Melilla as outermost regions (OMR), which would allow for a more beneficial tax regime and other advantages from the European Union.
The proposal is part of the Executive’s strategy to “strengthen the presence of Europe in Ceuta and Melilla” and achieve, as Sánchez mentioned in Congress, a “full integration” of both cities into the European Union, which would include their inclusion in the customs union and permanent representation in the Committee of the Regions. This status is defined in Articles 349 and 355 of the Treaty on the Functioning of the European Union (TFEU), applying to those territories that, despite being part of the community block, face disadvantages due to remoteness, insularity, or economic dependence.
With recognition as OMR, the cities would have access to tax benefits and increased community funding. The outermost regions receive financial assistance from funds such as the European Regional Development Fund (ERDF), with co-financing caps of up to 85% for projects, a figure higher than the usual 80% in other parts of the European Union. In addition, the EU has allocated an additional 1.928 billion euros from the ERDF for these regions in the period 2021-2027, along with 281 million for the Interreg D program.
This status also allows for the implementation of flexible state aid and tax regimes that could help reduce the cost of living. In the agricultural sector, there would be specific programs that support local production. In comparison, the Canary Islands, the only Spanish territory that is currently OMR, enjoys an Economic and Fiscal Regime (REF) that includes a general indirect tax of 7%, compared to the 21% VAT on the mainland.
Despite their similarities with the outermost regions, Ceuta and Melilla do not meet the automatic requirements for this category, as they are not islands nor are they sufficiently distant from the Iberian Peninsula. However, both share characteristics such as their small size and economic dependence on limited sectors, as well as being the only land border between the EU and the African continent.
Source: www.infobae.com
