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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
EC rules on state aid
Ljubljana, 12-13 October 2009
Annette MATTHIAS
Principal Administrator DG
COMP H 3
DG Competition
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Outline
1.
2.
3.
4.
5.
Why state aid control?
What is a state aid?
Can the measure be authorized?
State aid procedures
Conclusion
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Why state aid control?
State aid control aims at
- avoiding a subsidy race
- ensuring proper functioning of the Internal market
- facilitating a competitive European Industry
- being element of cohesion
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Notion of state aid
• What is state aid?
• Art. 87 (1) of the Treaty:
• Aid granted by a Member State or through state
ressources
• Advantage to the « beneficiary favouring »
• Selectivity: « certain undertakings or the
production of certain goods »
• Effect on trade between Member States
• Distortion or risk of distortion of competition
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
State ressources
• Granted by a Member State or through State
ressources
– « Member State » includes central government,
regions, communities
– « Through state ressources » refers to public or private
bodies established or appointed by the Member State
to administer aid
– Discussion on whether Structural Funds support can be
seen as state ressources.
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
State ressources
• They include :
- direct capital transfers
- guarantees
- Income foregone, e.g. tax breaks, assets sold
below market price
- funds under control and disposal of the State,
e.g. parafiscal taxes, yield of national lottery
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Advantage
• Transfer of ressources or relief from charges
which a company normally has to bear
• Advantage for free or without adequate
consideration
• Exceptions:
market investor principle
private creditor principle
compensation for SGEI (Services of general economic interest)
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Advantage
Market economy investor principle (MEIP)
• Equality between private and public sectors
• No advantage if Member State (MS) puts capital
at the disposal of an undertaking in
circumstances which correspond to normal
market conditions
• No distortion of competition, if MS behaves like a
private investor
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Advantage
• SGEI: no aid if
– Parameters for compensation established in advance
in an objective and transparent manner
– No overcompensation (costs and reasonable profits)
– Tender or comparison with costs of typically well run
undertaking (difficult to define)
– Clear public service obligation and clearly defined
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Selectivity
• Favouring certain undertakings or the
production of certain goods
– Geographical specificity
– Sectoral specificity
– Specificity as to type of company or activity
– Discretionary power of the granting authority
when deciding on the beneficiary.
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Effect on trade
• Sufficient that a product or service is
subject to trade between Member States
• Even if the aid beneficiary does not export
or exports virtually all of its production
outside the EU
• Exception: De minimis, local services
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Risk of distortion of competition
• Aid strengthens the competitive position of
the beneficiary in respect to its competitors
and thereby distorts competition.
• Not required that distortion is substantial or
significant
• Exception: Aid under the De minimis
Regulation ((EC) No 1998/2006) (No aid)
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
De Minimis
• De minimis aid is not considered to be state aid, because
the effect on trade is considered not to be sufficient to
provoke a distortion of competition. Therefore the question
of cumulation with other state aid rules is sometimes
difficult. Regulation 1998/2006 tries to clarify: no
cumulation possible, if the other aid instrument relates to
the same eligible costs.
• New Regulation: Commission Regulation Nr. 1998/2006
increases the max. aid amount to 200.000 € over 3 years
per undertaking
• Includes requirement of transparent aid, i.e. aid for which
the gross aid equivalent can clearly been defined.
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Compatibility
• If state aid is involved, it can be declared
compatible with the Treaty.
• legal instruments on
http://ec.europa.eu/competition/state_aid/legislati
on/legislation.html
• Procedural conditions: state aid project must be
notified
• In case of use of GBER only summary
information must be send to the Commission
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Procedures
• Notification via SANI (State Aid Notification
Interactive) web application
• After notification standstill obligation until the
Commission has decided
• If block exempted measure no standstill obligation
• Possible Commission decisions:
–
–
–
–
No aid
Positive (authorized aid)
Negative
Conditional
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European Union
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Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
GBER (General Block exemption
Regulation)
Regulation n° 800/2008 of 6/8/2008 (OJ L 214 of 9/8/2008, p. 3)
Chapter I: Horizontal provisions
Standardised conditions and definitions
Harmonisation & simplification
Chapter II: Different exempted aid types, employment aid, SME aid,
investment aid, aid for environment, R&D&I etc.
• Chapter III:Transitional provisions
• Chapter III:Transitional provisions
• Annexes: Summary information form for measures under the GBER
- Definition of SME (cf Commission Recommendation 2003)
- Summary information sheets for R&D and large regional projects (specific
information for large individual aid measures within an aid regime, which
are below the notification threshold)
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
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Monitoring
• On site monitoring, where CM has serious doubts
that positive decision has been complied with
(not used so far)
• Annual reports (will be introduced in state aid
scoreboard)
• Addressee of decisions: MS
• Publication of decisions in Official Journal of
European Communities)
• Search function Register- DG COMP Website
Ljubljana, 12-13 October 2009
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Conclusion
Projects realised under Structural Funds may have a
state aid component, in particular when private
companies are involved
Possibly check with Economics or Finance Ministry,
whether state aid component
If yes, notify (standstill obligation) or send summary
information (Aid may be granted under GBER, but
information sheet should follow within 20 days)
State aid authorities in Member States know how to do
this via SANI application and have corresponding
access rights.
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European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Thank you for your attention!
Email:[email protected]
Tel:+32-2-2998928
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