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European Commission - Press release

State Aid: In-depth investigation into Finnish plans to modify investment aid and young farmers start-up support

Brussels, 29 June 2011 - The European Commission has opened a formal investigation under the EU State Aid rules into Finnish plans to modify investment aid and young farmer start-up support provided under existing aid schemes.

The notified measure envisages lowering the minimum interest rate that the recipient of the loan must pay from 2% to 1% for the years 2011 and 2012. According to the Finnish authorities the reduction would be applicable for the new aid to be granted under the existing aid schemes as well as to aid already granted.

The Commission has no objections to this measure concerning the new aid to be granted after approval of the present modification.

However, The Commission has doubts whether the planned retrospective change of conditions (aid already granted) can be considered compatible with EU state aid rules. There the measure seems to lack the necessary incentive element and may constitute operating aid which is simply intended to relieve the beneficiary of a financial burden.

Background

Finnish schemes for investment aid and aid for the setting-up of young farmers have been agreed by the Commission in 2000.

The support for investments in agricultural holdings aims to reduce the production costs, to improve and to redeploy production, to increase quality, to preserve and to improve the natural environment, to comply with animal hygiene and standards as well as to promote the diversification of farm activities.

The young farmers support is granted to primary producers when the following conditions were fulfilled: the farmer was under 40 years of age, the farmer possessed adequate occupational skills and competence, the farmer was setting up on an agricultural holding as a head of the holding for the first time and the farmer submitted a business plan for the development of his/her farming activity.

Follow-up

The full text of the Commission decision will be published in the Official Journal. Finland and other interested parties will be given one month from the date of publication to submit their comments. After this period, the Commission will rule as soon as possible on whether these measures constitute State aid and, as the case may be, on their compatibility with the common market.

Contacts :

Roger Waite (+32 2 296 14 04)

Johan Reyniers (+32 2 295 67 28)


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