State Aid : Eu Eases Rules to Stimulate Aid for Growth and Employment

Article excerpt

The European Commission adopted, on 7 July, a regulation allowing member states to grant state aid in certain specific cases without first having to notify the EU executive. With the regulation, Competition Commissioner Neelie Kroes hopes to encourage member states to focus their resources on aid which will truly improve Europe's employment situation and competitiveness. The regulation will also lighten the administrative burden on the public authorities, the beneficiaries and the Commission itself, she stressed. "It is up to member states to profit from this new regulation," added Kroes during a press conference. The commissioner expects to see a 50% drop in notifications "on condition that these states optimise these new rules".

This new general block exemption regulation' consolidates the pre-existing provisions of five separate regulations into one text, and extends the state aid categories covered by the exemption. It will come into force 20 days after its imminent publication in the EU's Official Journal and will apply until 31 December 2013.

NINE CATEGORIES

The regulation covers nine aid categories:

- regional aid

- SME investment and employment aid

- aid for the creation of enterprises by female entrepreneurs

- aid for environmental protection

- aid for consultancy in favour of SMEs and SME participation in fairs

- aid in the form of risk capital

- aid for research, development and innovation

- training aid

- aid for disadvantaged or disabled workers.

It concerns all sectors of the economy, with the exception of the fishery and aquaculture sectors (except for training aid, aid in the form of risk capital, aid for research and development and innovation); the primary production of agricultural products (except for training aid, aid in the form of risk capital, aid for research and development, environmental aid, and aid for disadvantaged and disabled workers) and, in certain cases, the processing and marketing of agricultural products. The regulation does not apply to export aid (aid directly linked to quantities exported).

THRESHOLDS AND SPECIFIC PROVISIONS

For each of the nine categories mentioned above, the regulation defines thresholds under which there is no need to notify the aid, and specific provisions (aid intensity, eligible costs, etc).

For example, regarding SME investment and employment aid, this threshold is set at 7.5 million per undertaking per investment project. As for research and development project aid and feasibility studies, if the project is predominantly fundamental research, the threshold is 20 million per undertaking per project/feasibility study; if the project is predominantly industrial research, it is 10 million per undertaking per project/feasibility study; and for all other projects the threshold is 7. …