Transcript EUROMONTANA General Assembly 2010

Revision of regional aid guidelines:
State of the art and recommendations
for Mountain Areas
Domenico Mastrogivanni, Euromontana
“Supporting economic activities in mountain areas, the new EU rules for state aids”
Bologna University – 15.11.2011
Foreword…
• This analysis and the positions presented are based for an
important part on a common work realised in close
partnership with:
– AEM - Association of Elected representatives of Mountain areas
– CPMR, Islands Commission - Conference of Peripheral and
Maritime Regions
– INSULEUR - European Network of Islands Chambers of Commerce
and Industry
– ESIN - European Small Islands Association
What is Euromontana?
• European
multisectoral
association for cooperation
and development of mountain
areas (since 1996)
• Around 70 members from 15
countries
• Comprising :
Map: NordRegio, 2004
– regional development agencies,
– regional authorities,
– chambers of commerce and
industry
– agriculture organisations,
– environmental organisations,
– research organisations…
Euromontana in Italy
Members in 2011
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Provincia Autonoma di Trento
Confederazione Italiana Agricoli
Provincia di Torino
Südtiroler Bauernbund - Bolzano
ERSAF - Ente Regionale per i Servizi all’Agricoltura e
alle Foreste (Lombardia)
Provincia dell' Aquila
Provincia di Bergamo
Provincia di Sondrio
Regione Molise
Our vision of European mountains
• Our mountains are territories with a
future and opportunities for Europe
• Mountain areas are distinctive areas of
Europe which need to be addressed
specifically
• We call for private and public
investment in these areas. The return on
investments might be longer but will be
more sustainable.
Our approach
• Montain areas have a potential to deliver the EU2020
strategy:
– Smart growth  specific innovation potential due to their permanent
confrontation with specific constraints,
– Green growth  high potential for green economy
– Inclusive growth  community strength, quality of life
• They are facing specific constraints and need adequate
policies to develop their potential  articles 170/174/175 of
EU treaty have to be taken into account in the UE policies
Treaty Functioning EU
•
Article 174: "In order to promote its overall harmonious development, the Union shall
develop and pursue its actions leading to the strengthening of its economic, social
and territorial cohesion. In particular, the Union shall aim at reducing disparities
between the levels of development of the various regions and the backwardness of
the least favoured regions. Among the regions concerned, particular attention shall
be paid to rural areas, areas affected by industrial transition, and regions which
suffer from severe and permanent natural or demographic handicaps such as the
northernmost regions with very low population density and island, cross-border
and mountain regions.“
•
Article 175 (ex Article 159 TEC) : Member States shall conduct their economic
policies and shall coordinate them in such a way as, in addition, to attain the
objectives set out in Article 174. The formulation and implementation of the Union’s
policies and actions and the implementation of the internal market shall
take into account the objectives set out in Article 174 and shall
contribute to their achievement.
What type of support is needed to
overcome constraints?
Constraints
Support envisaged to overcome constraints
Remoteness
Limited or poor accessibility
 Isolation from markets
Improve accessibility (investment).
Reduce dependency on imports by promoting
local production (subsidies).
Higher cost of infrastructure and services
 lower profitability, impossibility of some
activities
Proportional support covering overcost
(investment and operating)
Limited human resources and capital
 Risk of falling below « critical mass »
Maintain settlements; support training,
education;
Social security support
Environmental vulnerability
 Constraints on economic activities
Investment in technologies allowing better use
of existing resources
Heavy reliance upon monoindustry, limited
industries or traditional sectors, seasonal economy
Diversification of activities (investment and
operating)
Lack of economies of scale
Small size of proximity market
Support to small scale supply chains
Development of « niche » markets
Support local processing activities enabling
higher value exports (investment and operating)
What can policy
territories deliver?
support
to
this
Potential
Adequate policy support can deliver
Reservoir of natural resources, high potential
for green economy
Green growth in energy, life sciences, clean
industry, sustainable wood etc…
Preventing resource degradation
Innovation potential inspired by response to
constraints
Inclusive growth via social innovation, new
forms of service delivery
Rich heritage (material and immaterial):
buildings, know-how, food, culture, landscapes
Maintaining and increasing tourism potential of
Europe, innovative sustainable tourism
Quality of life
Inclusive and sustainable growth by better
distribution of population on territory, avoiding
congestion
Quality products and services
Diversity of European products, potential for
exports, quality diet for European citizens
Modern governance
Innovative models of territorial organisation
as source of inspiration for other territories
The specific situation of markets in
mountain areas
• Small scale markets and limited impact on EU single market
• Higher costs  structural lower profitability
• More sensitive to local monopols for supply (energy, raw
material, telecom…) and sales  distorted markets
• R&D can be limited due to sparsity of businesses and difficulty
of clustering, or kick-start businesses
Current status of specific territories
in Regional Aid Guidelines
• Regional Aid are granted according to TFEU – article 107:
– 3.a: “aid to promote the economic development of areas where the standard of
living is abnormally low or where there is serious underemployment”
– 3.b: “aid to facilitate the development of certain economic activities or of certain
economic areas, where such aid does not adversely affect trading conditions to an
extent contrary to the common interest”
• For all the regions:
– Eligible under 3.a. if GDP<75% EU average (NUTS2/3)
– Eligible under 3.c. If GDP<EU average or unemployment>115% national
average
• For mountain areas mountain areas:
– Mentionned under article 3.c as isolated areas (footnote) but no systematic
approach
– Mountains with GDP<EU average or unemployment>115% national average
• But not only Regional Aid Guidelines need to be addressed…
Does it work? Is it sufficient?
Lessons learned from case studies
• Most support granted under General Block Exemption Regulation or de
minimis…
• Positive: Some support has been possible when areas have been characterised
as 3.c.:
– Haut-Jura: support to building investment + access to capital
– Highlands and islands: some support to companies
• Requiring improvements
– Mapping/statistical indicators available at NUTSII or III areas: inhibits
identification of SPA or areas with economic difficulties within regions (eg. Val
d’Aoste)
– Difficulties in supporting deprived rural areas (eg. Rural Revitalisation Areas,
social aid)
– Difficulties in supporting strategic portions of food supply chains above de minimis
(eg. Bolzano)
– Obstacles to local valorisation of own resources (eg. Access to local energy at
preferential rates)
– Difficulties in support to SMEs and innovation in Scottish Highlands and islands:
• cumbersome management of state aid due to too many different types
• Insufficient incentive related to the 20% maximum for large companies (food or other
natural resource processing
Conclusions
• Current rules do provide for some flexibility:
– Positive examples to secure in the future  evolution is in the right
direction
• Flexibility is not always used to its full extent:
– Low understanding of the process (very technical, more pedagogy
needed)
– Unavailability of statistical data at proper disaggregation level to
make the case for intervention (especially for 3.c)
– Distorted interpretation of rules from national authorities
– Competition for aid ceiling with other territories  different situations
call for differentiated responses
– Unfavourable mapping of eligible areas
– Lack of financial resources
• De minimis ceiling can be too low to allocate the right type of
aid to enable territories to exploit fully their opportunities
(example: supply chains…)
Suggestions
• Provide a broad enough framework to operate flexibility:
– E.g. : article 3.c. applies automatically to sparsely populated areas
– Should be extended or improved for other categories
– Limited financial resources  limited risk!
• Higher de minimis ceilings for our territories, differentiated
from « non-174 » territories
• Specific provisions for some types of sectoral activities
(small-scale supply chains, energy, services, transport…) that
are essential to development, ouside of 3.c. ceiling
• Compensation calculation and « sound management »
evaluated using companies in similar areas as a yardstick
 Implementation of these specific provisions for all territories or
based on categorisation for a progressive approach
Fostering innovation
• Innovation in our territories is not necessarily specific…
assembling the conditions to enable innovation is often the
bottleneck (services, communication, transport enabling
clustering and connection to distant markets)
• To exploit the innovation potential of our territories, need to
support specific R&D&I firms in our territories:
– Take into account the specific size of R&D&I firms in specific territories:
small, fitted to local strengths (eg. Energy, life sciences…)
– Assistance required = mixture of R&D&I costs and employment costs
(Regional aid)  eligibility challenge
• Proposal: extend aid for « young innovative enterprises »
from R&D&I guidelines as a legitimate regional aid for a wider
range of size and age of firms
Detailed suggestions
• Authorize for mountains, in state aid rules, a functional approach of
development at massif level:
– Consider state aid as one component of massif policy to deliver EU2020, in
coherence with operational programmes (ERDF, EAFRD, ESF…)
– Explicit delineation of 3.c areas based on entities that could differ from
administrative NUTS2/3 areas, and would target eligible territories within mountain
massifs in coherence with massif strategy (take into account infra-regional disparities)
• Include specific provisions for some sectors of strategic importance for
valorisation of mountain potential:
– Energy: retention of existing facilities & development
– Better recognition of Services of general interest (transport, ICT, health…), enable
support to innovative forms of delivery
– Territorial/relocalised food and wood supply chains: operating aid
– Support to innovation & clustering for VSEs and SMEs
 Integrated approach to delivering public goods and innovation
Thank you for your attention!
EUROMONTANA
European association of mountain areas
[email protected]
www.euromontana.org
T: +32 2 280 42 83
F: +32 2 280 42 85