Palma.—Yesterday, the Balearic Parliament agreed to lobby the new centre right Partido Popular government over a reduction in VAT for the tourist industry to help ease the financial burden on the sector.

The opposition voted against the motion but the PP's majority in the house pushed it through and now those elected to represent the Balearics in Madrid will be charged with lobbying the new government for fiscal incentives to help the Balearics and other region's of Spain recuperate its high level of competitiveness.

The reduction will also put Spain's tourist industry on a level VAT playing field with the rest of Europe where the sector has been granted various fiscal benefits during the economic crisis. PP MP Lourdes Bosch blamed the Socialists' hikes in VAT for Spanair's decision to relocate from Palma to Barcelona, the temporary freeze on construction of the convention centre and the Playa de Palma project still stuck on the drawing board.

The PP claim that fiscal breaks will enable these projects to get going.

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