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State aid: Commission adopts guidance on in-depth assessment of regional aid to large investment projects

European Commission - IP/09/993   24/06/2009

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IP/09/993

Brussels, 24 th June 2009

State aid: Commission adopts guidance on in-depth assessment of regional aid to large investment projects

The European Commission has adopted a guidance paper setting out criteria for the in-depth assessment of regional aid to large investment projects. The guidance outlines the kind of information required by the Commission for its detailed compatibility assessment and the assessment methodology, which is based on the balancing of the positive and negative effects of the aid. The guidance is in line with the Commission's refined economic approach to analysing state aid, based on the principles set out in the State Aid Action Plan (see IP/05/680 and MEMO/05/195 ). The guidance forms part of the Commission's efforts to clarify and refine the state aid rules.

Competition Commissioner Neelie Kroes said "The guidance paper is a useful and practical step to help public authorities and companies to understand how best to present regional aid projects involving large investments with a view to faster decisions. It is a further step towards the economic-based approach outlined in the Commission's 2005 State Aid Action Plan."

The Regional Aid Guidelines 2007-13 (see IP/05/1653 ) foresee that large investment projects above certain thresholds need to be individually notified to the Commission because they may carry a greater risk of distorting competition. The Commission opens a formal investigation procedure for projects where the aid beneficiary has a market share of more than 25% or the production capacity created by the project exceeds 5% of the market (while the growth rate of the product market concerned is below the EEA GDP growth rate). Regional aid to such large investments entails a higher risk of distorting competition. The Commission has now provided further guidance on how it will carry out this in-depth assessment.

The guidance is based on the principles of the Commission's State Aid Action Plan, in particular the balancing test that weighs the positive effects brought about by the aid against the negative impact of a potential distortion of competition which the aid might entail. Member States should therefore provide information on the positive effect of the aid as well as its appropriateness, proportionality and incentive effect. . The Commission will base its overall evaluation of the aid on these criteria.

For further details, see also MEMO/09/292 .

The full text of the guidance paper will be available at:

http://ec.europa.eu/comm/competition/state_aid/reform/reform.cfm


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