Balearic Government Unveils Ambitious €3.8 Billion Economic Transformation Plan
Marga Prohens details a €3.8 billion plan to revamp the Balearic economy through infrastructure upgrades, tax reforms, affordable housing, and labor improvements.
- • €3.8 billion investment announced in public infrastructure for Balearic Islands.
- • Tax reforms have saved families €835 million and target further relief for self-employed by 2026.
- • 5,000 affordable homes planned with financial aid for young first-time buyers.
- • New hospitality agreement raises wages by 13.5% for 180,000 workers over three years.
Key details
Marga Prohens, President of the Balearic Government, announced a comprehensive economic transformation plan aimed at shifting the Balearic Islands' economic model towards sustainability, diversification, and improved citizen welfare. The centerpiece of this initiative, called Pla Illes en Transformació, allocates €3.8 billion towards public infrastructure, marking the largest such investment in 20 years in the region. This includes €1.4 billion earmarked for mobility projects such as new train lines and €713 million for enhancing water management systems.
The plan also highlights significant tax reforms that have already saved families €835 million over two years by eliminating the Inheritance Tax and reducing Personal Income Tax rates. Further tax relief is planned by 2026 to equate self-employed individuals with large families in tax deductions. To tackle housing challenges, the government plans to construct 5,000 affordable homes complemented by financial aids targeting first-time young buyers.
In addition to infrastructure and fiscal policies, the plan includes a new hospitality sector agreement aimed at converting temporary jobs into permanent positions. This agreement will raise wages by 13.5% over three years and improve labor conditions for over 180,000 workers. Agricultural policy will also see reform via the upcoming Agrarian Law designed to boost food sovereignty and local product sales.
Moreover, the Atles Energètic initiative will support the transition to renewable energy sources without requiring additional land, further underpinning the sustainability goals. Prohens emphasized that the Balearic economy needs to move from a volume-based to a value-based model, targeting a projected growth rate of 3.2% in 2025.
This extensive approach reflects a strategic attempt to modernize the economy and enhance quality of life amid rising population pressures. Prohens described the plan as transformative, aiming for balanced growth with environmental responsibility at its core.