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European Commission - Press release

State aid: Spring Scoreboard shows Member States spending more to boost Europe's competitiveness

Brussels, 22 June 2011 - State aid to support expenditure in research, development and innovation has steadily increased in the last 10 years to support job creation and increase Europe's competitiveness. The European Commission's 2011 spring Scoreboard, shows R&D&I State aid stood at 0.09% of GDP in 2009, the last year for which figures are available, against 0.05% in 2005. Of the total R&D expenditure in the EU in 2009 (2.01 % of GDP), one third (0.65 % of GDP) was publicly funded but only 13% (€10.6 billion) of public funnding was qualified as state aid. This year's edition of the Spring State aid Scoreboard, focuses on support to achieving the Europe 2020 objectives through smart, sustainable and inclusive initiatives of general common interest in areas such as research, development and innovation (R&D&I), environmental protection, regional development or training. State aid measures in these fields can correct market failures, improve the functioning of markets and thus enhance European competitiveness.

Commission Vice-President Joaquín Almunia, in charge of competition policy, commented: "In recent years, Member States have re-oriented public aid measures to research, innovation, environmental protection and other objectives of general interest. In the context of budgetary restrictions and in view of the new challenges in the coming years, it is my intention to help Member States to better target aid by focussing it more on improving competitiveness and reducing regional and social disparities, while minimising competition distortions ".

The spring 2011 edition of the Commission's Scoreboard of national state aid measures provides an overview of support granted in the Member States in areas of particular relevance for the Europe 2020 Strategy

The Europe 2020 Strategy lays down various priorities for which state aid instruments can be used in a policy mix to contribute to several flagship initiatives. EU state aid policy contributes to these strategic goals by furnishing common EU-wide rules, inter alia, for supporting research, development and innovation (R&D&I), environmental protection, regional development, broadband, small and medium sized enterprises (SMEs) and employment and training.

R&D&I is one of the key elements to strengthen the competitiveness of the EU economy and to ensure sustainable growth, and istherefore, one of the flagship initiatives of the Europe 2020 Strategy. The Strategy explores how Europe could improve conditions and access to finance for R&D&I, to face the new challenges of a globalised society and to ensure that innovative ideas are turned into products and services that create growth and jobs.

In 2009, R&D expenditure in the EU stood at a record of 2.01 % of GDP (around €236.5 billion), slightly higher than in 2008 (1.92%) but still at some distance from the 3% target set by the Europe 2020 Strategy. Around one third of total R&D expenditure in the EU (0.65% of GDP) was publicly funded. Only 13% or €10.6 billion of this total qualified as state aid. 9% of total state aid for R&D&I was granted under block-exempted measures, and so did not require notification to the Commission.

Between 2004 and 2010, the Commission took 426 final decisions on R&D&I measures, out of which 425 allowed the planned investments to go ahead. Only 1 decision was partly negative as it did not meet the established criteria.

The long-term trend shows a steady increase of R&D&I aid both in relative and nominal terms. It increased between 2004 and 2009 from 0.05% (€5.7 billion) of EU GDP to 0.09% in 2009. In this period, more than half of the total €46.5 billion of R&D&I aid was spent by two Member States: Germany (29%) and France (22%) while five other Member States accounted for another third of the total: Italy (11%), Spain (9%), the United Kingdom (7%), Belgium (5%) and The Netherlands (4%).

Another high priority of the EU 2020 Strategy is a 20% reduction of CO2 emissions, a 20% share of renewable energy in EU energy consumption and a 20% increase in energy efficiency. To achieve these ambitous objectives, state aid may be necessary when the market alone is unable to deliver the envisaged results. In 2009, €13.2 billion of state aid was granted in the EU for environmental objectives, either as direct aid or through tax reductions and exemptions. Germany accounted for half of this.

The EU 2020 Strategy also highlights the role of SMEs in the European economy, as a motor of job creation and growth. SME are eligible for all aid categories allowed under EU state aid rules and may benefit from higher aid intensities for certain measures. The vast majority of support exclusively for SMEs between 2004 and 2010 concerned risk capital measures, with Germany, the UK and Italy accounting for more than half of these measures. The importance of the block exempted measures for SMEs is evident, as more than half of total aid for SMEs granted in 2009 was done so under such measures.

Background

State aid control by the Commission helps Member States to better target aid at improving competitiveness and reducing regional and social disparities. It aims to ensure that aid addresses gaps where the market could not deliver the desired result, while limiting distortions of competition.

Most state aid rules were reviewed in the context of the Lisbon Strategy for growth and jobs. Therefore, they are generally adapted to meet the challenges under the Europe 2020 Strategy. In the forthcoming revisions of certain guidelines and frameworks, further adjustments may take place.

As the Europe 2020 Strategy was launched in 2010 and the latest available data on state aid expenditure relate to 2009, it is of course too early to draw conclusions as to how state aid policy concretely contributed to the Europe 2020 objectives. However, this first scoreboard focussed on the Europe 2020 objectives is expected to be a starting point for nourishing forthcoming analyses.

Contacts :

Amelia Torres (+32 2 295 46 29)

Maria Madrid Pina (+32 2 295 45 30)


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