Executive Vice-President Raffaele Fitto has ruled out creating a separate EU compensation mechanism for the permanent additional costs of island living, instead pointing to existing state aid rules, public service obligations, and the forthcoming EU islands strategy as sufficient tools to address insularity handicaps. In a written answer on 23 July 2026 to a parliamentary question by Greek MEP Elena Kountoura (The Left), Fitto argued that the current EU state aid frameworks already allow Member States to provide tailored support to islands facing structurally higher costs, and that ongoing revisions—such as the General Block Exemption Regulation (GBER) and the Air Transport Guidelines—will further improve the situation.
The answer, which responds to Kountoura's three-part question, contains no new concrete proposals or numerical targets beyond those already under discussion. On state aid, Fitto noted that the GBER revision proposes increasing the eligibility threshold for airport aid from 200,000 to 500,000 yearly passengers, and that island airports can benefit from higher aid intensities for investments. He also highlighted that public service obligations (PSOs) can facilitate maritime connections and offset additional costs, citing Greece's electricity sector PSO as an example where the extra cost of supplying non-interconnected islands is spread across all consumers. On decarbonisation, Fitto pointed to existing exemptions in the Emissions Trading System and FuelEU Maritime that allow Member States to exempt voyages servicing small islands from their scope.
The Commission's position represents a continuation of its existing policy orientation: relying on mainstream EU instruments rather than creating island-specific mechanisms. Fitto's answer reaffirms the Commission's commitment to the EU strategy for islands, which includes launching an in-depth analysis of the cost of insularity and best practice measures to mitigate it, notably in transport. No timeline for this analysis was provided. The answer signals that the Commission sees the ongoing state aid framework reviews as the primary vehicle for addressing island concerns, rather than introducing new compensatory fiscal instruments such as reduced VAT or transport equivalent schemes as advocated by Kountoura.
Island regions and their residents will see no new dedicated EU funding stream, but may benefit from incremental improvements in state aid thresholds and PSO mechanisms. EU producers and transport operators on islands could face continued higher costs, though decarbonisation exemptions offer some relief. National governments retain flexibility to use existing tools, but may need to bear the financial burden of compensating island handicaps themselves. Environmental groups may welcome the absence of blanket exemptions from decarbonisation policies, while island businesses and local authorities may be disappointed by the lack of a structural compensatory mechanism.