BALEARICS TO CASH IN ON EUROPEAN UNION EXPANSION

This is thanks to the granting of a long transition period for those who wish to acquire agricultural territory and residential property in Spain.
The economic leeway was explained yesterday in Palma, by Jorge Fuentes, an ambassador with a special European Union mandate.
Speaking just two days away from the European Union being officially joined by 10 new member states, Fuentes estimated that foreign investors will also keep their material wealth in these Spanish regions because it has a more favourable climate and a better lifestyle for visitors.

The enlargement of the European Union will mean the integration of 75 million new consumers, with quite a high acquisitive capacity, insisted Fuentes.
He affirmed that the addition of 10 new member states, as of tomorrow, will generate “considerable benefits” because, he claimed, these countries will be economically “complementary” to Spain.

The ambassador prophesied that the lower cost of labour in these new member states will increase the number of companies who will abandon Spain to heighten their productivity and said he believed that Spanish businessmen must also take advantage of the opportunity to invest in these areas to optimise their profits.

Spain has become the country occupying 6th place in the world league in terms of foreign investment, although an excess amount of this activity is concentrated in Latin America, where it has 85 percent of overseas capital.

To redress this imbalance, suggested Fuentes, it would be advisable to transfer 30 percent of these investments to Central European countries.
On the issue of what repercussions the enlargement of the European Union will have on the distribution of EU resources, the ambassador highlighted the fact that Spain is at the point of achieving 90 percent of the average Community income.

This figure is the limit beyond which member countries will cease to qualify for “cohesion” funding, regardless of the entry of new member states.
It is forecast that Spain will be receiving 91 percent of the average of Community funding by 2007, which means it will no longer be benefitting from cohesion funding, he emphasized.

On the other hand, this generalisation based on average figures, may not apply to some of the Spanish regions which were considerd as a priority in the distribution of restructuring funding, including Murcia, Galicia and Castilla La Mancha.