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IP/06/1765

Brussels, 12th December 2006

State aid: Commission adopts new de minimis Regulation, exempting aid notification below €200,000

The European Commission has adopted a Regulation exempting small subsidies from the obligation to notify them in advance for clearance by the Commission under EC Treaty state aid rules. Under the new Regulation, aid of up to €200,000, granted over any period of three years will not be considered as state aid. Loan guarantees will also be covered to the extent that the guaranteed part of the loan does not exceed €1.5 million. In order to avoid abuses, forms of aid for which the inherent aid amount cannot be calculated precisely in advance (so-called 'non-transparent' aids) and aid to firms in difficulty have been excluded from the Regulation. The Regulation takes account of comments received from a series of public consultations in the course of 2006. It constitutes one of the cornerstones of the State Aid Action Plan (see IP/05/680 and MEMO/05/195), designed to simplify the state aid rules, to refine the economic analysis of subsidies and to allow the Commission to concentrate its enforcement on the most distortive cases. The Regulation will be published in the Official Journal before the end of 2006 and will enter into force on 1 January 2007.

Competition Commissioner Neelie Kroes said: “This new Regulation will allow Member States and the Commission to save time and resources by outlining how small support schemes can be designed to avoid the need to be notified for clearance by the Commission and at the same time prevent distortions of competition.”

According to the current de minimis Regulation (see IP/00/1415), state financial support of less than €100,000 over a period of 3 years in favour of a given company is deemed to have no substantial effect on competition and trade between Member States, and therefore not to constitute state aid. Raising the ceiling to €200,000 takes into account economic developments since the de minimis ceiling was last increased. Contrary to the current Regulation, the new Regulation will also apply to the transport sector and to the processing and marketing of agricultural products. Nevertheless, since many companies in the road transport sector are relatively small, a specific ceiling of €100 000 will apply to this sector. For the same reason and in view of the overcapacity of the sector, de minimis aid cannot be used to buy road freight vehicles – notwithstanding the Commission's favourable approach with regard to cleaner and more environmentally friendly road transport, which is not the object of this specific legal instrument.

Transparency

The de minimis rule will be limited to transparent types of aid where it is possible to determine the precise amount of aid in advance. Taking into account numerous comments made during the consultation process, the final text provides extensive guidance as regards the status of loans, capital injections, risk capital and loan guarantees. Given the economic importance of loan guarantees, the safe harbour is limited to guarantees where the amount of the guarantee does not exceed €1.5 million. Nevertheless, Member States will have also the possibility of offering loan guarantees on amounts in excess of €1.5 million if they use a methodology accepted by the Commission to demonstrate that the aid element contained in the guarantee is no more than €200,000.

The new Regulation will allow Member States to implement guarantee schemes in favour of SMEs without red tape and under legally secure conditions. In this respect, the proposal complements the Guidelines on Risk Capital (see IP/06/1015) and the Framework on research & development & innovation (see IP/06/1600) adopted earlier this year.

The Commission will publish the de minimis Regulation in the EU’s Official Journal in all Community languages before the end of this year, ensuring that the new Regulation can enter into force in January 2007. The text is available on the Commission’s web site at:

http://ec.europa.eu/competition/state_aid/reform/reform.html#minimis

The de minimis Regulation forms part of the Commission’s June 2005 State Aid Action Plan (see IP/05/680 and MEMO/05/195), outlining the principles for a comprehensive reform of state aid rules over the next five years. In particular the document sets out how the Commission intends to use EC Treaty state aid rules to encourage Member States to contribute to the Strategy for Growth and Jobs by reducing overall aid levels while focusing remaining aid on improving the competitiveness of EU industry, creating sustainable jobs, ensuring social and regional cohesion, and improving public services.


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