Canary Islands in the EU: Integration and Challenges
Integration of the Canary Islands in the EU
Since the late 1970s, Spain’s impending accession to the then European Economic Community (EEC) sparked a debate regarding the integration of the Canary Islands. Initially, the prospect of a more stable market presented clear advantages. However, the European economic and legal framework also posed significant drawbacks, being uniformly applied to all regions and member states.
Negotiations focused on reconciling the inconsistencies between the Canary Islands’ Economic and Fiscal Regime (REF) and Community legislation. The challenge was to fit a distinct regime like the REF into legislation designed to equalize and eliminate differences. Ultimately, a series of exceptions were agreed upon, primarily stipulated in Article 24 of the Act of Accession, which referred to Protocol 2. Commercially, the islands were treated as a third country. Being outside the Common Agricultural Policy (CAP), Canarian agricultural products faced disadvantages compared to Spanish products, which enjoyed preferential access.
The EC had a specific policy for France’s overseas dependent territories (DOM), called POSEIDOM. A similar program, POSEICAN, was envisioned for the Canary Islands and approved in 1991. POSEICAN aimed to facilitate integration into the Single Market, considering the islands’ remoteness and insularity. It facilitated access for consumers and producers to essential Canarian products and promoted certain production sectors lacking government support. The key measure was the REA (Economic System of Supply), a mechanism guaranteeing the supply of food products to the islands under special conditions.
In 1986, with Spain, the EEC became the European Community (EC) following the Maastricht Treaty, later integrated into the broader European Union (EU). The Maastricht Treaty also promoted European economic and monetary union, leading to the introduction of the Euro as the single currency for most European countries in 2002.
The Treaty of Amsterdam (1999) recognized the specificities and differences of the Canary Islands and other remote regions within the European Union, creating a new legal and administrative category: the Outermost Regions (ORs). These regions are part of EU countries but are geographically distant, thus receiving different tax treatment to offset inequalities caused by their location. The Canary Islands are the most populated OR with the highest GDP per capita. However, these regions have limited economic and demographic weight within the EU.
Integration into the European Union has significantly shaped the recent history of the Canary Islands, profoundly modifying the archipelago’s political and economic conditions. The service sector, particularly tourism and construction, remains the primary contributor to the overall economy. However, a significant portion of the profits generated by tourism leaves the islands, as large hotel and tourism enterprises are often foreign multinationals.
The EU’s enlargement to Eastern Europe has also introduced uncertainty into the Canarian economy, leading to the withdrawal of much of the aid the islands previously enjoyed. Furthermore, the global economy has experienced periods of regression, particularly following the subprime mortgage crisis in the U.S., potentially endangering the balance of the international economy in our interconnected and liberalized world.