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IP/10/1635

Brussels, 1 December

State aid: Scoreboard shows continued trend towards less and better targeted aid despite crisis-related spike

The volume of national support to the financial sector approved by the European Commission between October 2008 and October 2010 amounted to around € 4.5 trillion, the autumn State Aid Scoreboard shows. The amount actually taken up by banks in 20091 is around € 1.1 trillion. The bulk (76%) of this support comes in the form of State loans or guarantees to maintain interbank financing which would only have an impact on public finances, if they were called upon, whereas recapitalisation represents 12% and impaired asset relief 9%2. Excluding the crisis-related support, total aid remained relatively stable at € 73.2 billion in 2009 or 0.62% of GDP and continued to re-focus on less distortive horizontal objectives such as aid for research and innovation, protection of the environment and support to SMEs.

Commission Vice-President in charge of competition policy Joaquín Almunia commented: "The financial crisis led Member States to commit huge amounts of money to preserve financial stability. Whilst vital state aid to the financial sector has been permitted under specially adapted, crisis-specific rules, state aid to the non financial sector has remained broadly stable, and a positive aspect is that, in these circumstances, Member States have continued to re-orient State subsidies to research, environmental protection and other general-interest objectives, which create growth and jobs."

Aid to overcome the financial and economic crisis

Between 2008 and September 2010, €4,588.9 billion of aid was made available to financial institutions. However, the amount of public support actually used in 2009 was much lower and stood at € 1,106.6 billion. For 2008 it was € 957 billion.

The bulk of the support (76%) also came in the form of State guarantees. This is followed by ad hoc interventions in favour of individual banks (26%) through recapitalisations, asset relief interventions and other measures.

The coordinated action by Member States to support banks along with the introduction by the Commission of crisis-specific State aid rules avoided the collapse of the financial sector and limited distortions of competition within the European Union's single market.

To minimise the impact of the tightening in credit conditions, Member States also granted aid to the real economy under the Temporary Framework adopted by the Commission at the end of 2008. The aid consisted mostly of a subsidy of up to 500,000 per company, subsidised loan interests or guarantees and reduced interest for loans for the production of green products. The amount committed in approved schemes between December 2008 and 1 October 2010 is € 82.5 billion. This does not include 'cash-for-clunker', temporarily-reduced social security contributions and other measures that have benefitted a whole industry, the economy or consumers directly3. The amount taken up is also much lower. Member States tried to fix aid envelopes of a sufficient size to reassure the markets. However both the availability of market funding for some companies on one hand, and budgetary constraints on the other contributed to smaller actual use of the funds.

Long-term trends

Excluding the crisis-related support, 'traditional' aid remained stable at € 73.2 billion or 0.62% of GDP. Aid to industry and services amounted to € 58.1 billion or 0.49% of GDP of which 84% Member States earmarked for horizontal objectives of common interest.

The Scoreboard shows Member States are on track with their efforts to re-direct aid towards horizontal objectives of common interest. Most notably, the Commission observed a greater focus on regional aid, environmental protection, energy saving and aid for research, development and innovation. Such objectives are not only less distortive of competition but also contribute towards reaching the EU 2020 strategic objectives of smart (e.g. innovation, research and development), sustainable (e.g. energy efficiency) and inclusive growth (e.g. skills).

The reforms under the State Aid Action Plan 2005 – 2008 (see IP/05/680) have also continued to bear fruit. Around 19% of total aid is granted through block exemptions. Another 69% of state aid is assessed by the Commission under aid schemes (see IP/06/1765 for de minimis Regulation and IP/08/1110 for General Block Exemption Regulation). Once approved by the Commission, such block exemptions and schemes allow Member States to grant aid to individual companies without further Commission scrutiny. In total only 12% of the total aid is the subject of an individual assessment, giving Member States a high degree of flexibility and low administrative burden, while compatibility criteria safeguard a level playing field in the internal market.

The Scoreboard further shows that at the end of June 2010 89% of the total amount of illegal and incompatible aid had been repaid to the State. This marks a significant improvement given that at the end of 2004 only 25% had been recovered. In total, €12 billion have been recovered in this way.

The Scoreboard including its Annex "Fact and figures on State aid in the Member States" and more statistics and indicators for all Member States, are available on the Europa website:

http://ec.europa.eu/comm/competition/state_aid/studies_reports/studies_reports.html

Summary table on maximum approved crisis-related aid volumes to the financial sector

(In € billion)

Approved volume 2008 - 2010

Schemes

3 478.96

for guarantees

3026.28

for recapitalization measures

348.64

for asset relief interventions

62.17

for liquidity measures other than guarantee schemes

41.87

Ad hoc interventions in favour of individual financial institutions

1109.94

for guarantees

458.97

recapitalization measures

197.44

for asset relief interventions

339.63

for liquidity measures other than guarantees

113.9

TOTAL

4 588.90

Approved amounts per Member State (all schemes and ad hoc measures; in € billion)

 

Approved amounts
2008 - 2010

United Kingdom

850.30

Ireland

723.31

Denmark

599.66

Germany

592.23

France

351.10

Spain

334.27

Netherlands

323.60

Belgium

328.59

Sweden

161.56

Austria

91.70

Greece

78.00

Finland

54.00

Portugal

20.45

Italy

20.00

Slovenia

12.00

Luxembourg

11.59

Hungary

10.33

Poland

9.24

Latvia

8.78

Slovakia

3.46

Cyprus

3.00

Lithuania

1.74

Total

4588.90

Total aid as % of GDP (EU-27; data as of 1992

Figures and graphics available in PDF and WORD PROCESSED

Less and better targeted aid: Key figures (crisis measures excluded)

FIGURES EXCLUDE CRISIS MEASURES

State aid in billion EUR, 2009

State aid as % of GDP, 2009

Trend in the share of aid to GDP, 2004 - 2009 in % points of GDP(1)

Total State Aid less railways

Total State Aid for industry and services (i.e. less agriculture, fisheries and transport)

Total State Aid less railways

Total State Aid for industry and services (i.e. less agriculture, fisheries and transport)

Total aid less railways

Total state aid for industry and services

Share of aid to horizontal objectives as % of total aid for industry and services, 2009

Trend in the share of aid to horizontal objectives as a % of total aid, 2004 - 2009 in % points (1)

EU 27

73.2

58.1

0.6

0.5

-0.08

0.00

84

5.7

EU 15

65.1

53.4

0.6

0.5

-0.07

0.01

85

2.8

EU 12

8.1

4.7

0.9

0.5

-0.19

-0.13

76

29.5

Belgium

2.0

1.6

0.6

0.5

0.13

0.13

100

0.5

Bulgaria

0.7

0.03

2.1

0.1

1.42

-0.09

100

21.0

Czech Republic

0.9

0.7

0.7

0.5

0.16

0.18

88

-1.9

Denmark

2.1

1.9

1.0

0.9

0.06

0.08

97

0.7

Germany

16.7

15.2

0.7

0.6

-0.11

-0.10

86

3.9

Estonia

0.04

0.01

0.3

0.1

-0.04

-0.02

100

0.0

Ireland

1.5

0.7

0.9

0.5

0.46

0.07

89

5.6

Greece

2.0

1.8

0.8

0.7

0.21

0.31

87

-5.0

Spain

5.7

4.9

0.5

0.5

0.03

0.04

80

9.9

France

14.7

11.7

0.8

0.6

-0.32

0.09

79

-0.8

Italy

5.7

4.6

0.4

0.3

-0.08

-0.07

84

2.5

Cyprus

0.2

0.1

1.0

0.4

-0.41

-0.42

95

39.4

Latvia

0.2

0.0

1.0

0.1

-0.06

0.01

100

1.3

Lithuania

0.2

0.1

0.8

0.3

0.21

0.16

100

15.4

Luxembourg

0.1

0.1

0.3

0.2

-0.04

0.03

100

0.0

Hungary

1.4

0.9

1.5

1.0

-0.82

0.18

76

19.1

Malta

0.1

0.1

2.0

1.7

-1.23

-1.14

23

5.1

Netherlands

2.4

1.7

0.4

0.3

-0.01

0.02

99

5.2

Austria

1.7

1.0

0.6

0.4

-0.02

-0.07

99

21.3

Poland

2.9

2.2

0.9

0.7

-0.18

0.00

71

22.8

Portugal

1.6

1.6

1.0

0.9

0.18

0.20

19

1.0

Romania

0.8

0.2

0.7

0.1

-0.27

-0.85

50

27.5

Slovenia

0.3

0.2

0.9

0.7

-1.55

-1.40

91

69.4

Slovakia

0.3

0.2

0.5

0.4

0.14

0.12

90

18.3

Finland

2.1

0.8

1.2

0.5

-0.14

0.05

99

0.7

Sweden

2.6

2.4

0.9

0.8

-0.04

-0.03

100

0.0

United Kingdom

4.0

3.2

0.3

0.2

0.00

0.02

91

-0.8

Norway

2.8

2.4

1.02

0.87

n.a.

n.a.

2.8

2.4

Iceland

0.04

0.04

0.43

0.43

n.a.

n.a.

0.04

0.04

Liechtenstein

0.001

0.001

0.04

0.04

n.a.

n.a.

0.001

0.001

Data cover all State aid measures as defined under Article 107 TFEU (former Article 87(1) of the EC Treaty) that Member States awarded and the Commission examined. The Community rules on agricultural and fisheries policies are not covered by the EEA Agreement. Hence, aid to these sectors is not included for the EFTA countries. (1) Change in percentage points between annual average of 2004-2006 and 2007-2009. Source: DGs Competition, Energy, Agriculture, Maritime Affairs and Fisheries and EFTA Surveillance Authority. (2) Not available (3) The EFTA Surveillance Authority assesses crisis aid granted in the EFTA countries. Crisis measures are not yet included in this amount.

1 :

Whereas the Commission has nearly real-time figures for money committed by Member States because it has to approve it, when it comes to support actually granted it relies on Member States annual reports.

2 :

Around 3% represents liquidity measures other than guarantees.

3 :

A measure is only a State aid if it benefits a single company or groups of them. Not if it is a general measure.


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