Brussels, 5 December 2012
State Aid: Commission proposes to reform state aid procedures and exempt certain categories of aid from prior notification
In the context of its State Aid Modernisation (SAM) initiative, the European Commission has adopted proposals to amend two Council Regulations governing EU state aid control. The reform of the Procedural Regulation of 1999 is aimed at focussing state aid enforcement on the most significant distortions of competition in the internal market and to speed up decision making. The proposed amendments to the Enabling Regulation of 1998 would allow the Commission to adopt more block exemptions for aid with limited impact on the internal market, for example in the field of culture or innovation. The Commission proposals will now be discussed in Council and in the European Parliament.
Joaquín Almunia, Commission Vice President in charge of competition policy, said: "The reform package is designed to turn state aid policy into a simpler, stronger and smarter instrument to coordinate Member States' efforts to boost growth in times of extraordinary budgetary constraints. The proposals will streamline our decision-making and refocus enforcement on the aid that really matters."
The reform of state aid procedures (see MEMO/12/942) focuses on improving the handling of complaints and ensuring that the Commission obtains complete and correct information from the market. The Commission proposes to clarify the requirements for lodging a complaint and to set up a transparent and faster procedure to handle state aid complaints. It also suggests formalising the channel of cooperation between the Commission and the national judges. To effectively investigate significant cases, the Commission needs to obtain relevant market information in good time. The Commission therefore proposes to set up more efficient tools to obtain all the necessary information directly from market participants if the information at its disposal is not sufficient. It also suggests to allow the Commission to conduct inquiries about aid granted to a certain sector or a specific type of aid in several Member States which raises competition concerns.
The proposed extension of the Enabling Regulation (see MEMO/12/936) would allow the Commission to exempt certain categories of aid from prior notification to the Commission. The Commission proposes to allow the adoption of such exemptions for aid to culture, aid for compensating damages caused by natural disasters, aid for innovation, aid for forestry, aid to compensate the damage caused by adverse weather conditions in fisheries, aid for amateur sports, as well as certain types of aid for transport and for broadband infrastructure. Block exemptions allow Member States to grant aid more quickly, without the Commission's prior intervention, as long as the conditions of the Block Exemption Regulation are fulfilled. They considerably simplify the granting of aid that has a limited potential to seriously distort competition in the internal market.
In 1999, the Council adopted the state aid Procedural Regulation, setting out in detail the rules of procedure governing the enforcement of Articles 107 and 108 of the Treaty on the functioning of the European Union (TFEU). These rules have been applied until today without any significant modifications.
The 2009 state aid Best Practices Code has not created new legal provisions, but has detailed how state aid procedures should be carried out in practice, in particular as regards their duration, transparency and predictability.
In 1998, the Council adopted Regulation 994/98 (“Enabling Regulation”), allowing the Commission to adopt Regulations exempting certain categories of horizontal aid from the Commission's prior state aid scrutiny, provided they fulfil certain conditions (block exemption regulations – BER). On that basis the Commission has adopted BER for regional aid, aid for SME, aid for R&D, employment aid, environmental aid and training aid (see IP/08/1110 and MEMO/08/482).
The reform proposals are key building blocks of the State aid modernisation initiative launched in May 2012 (see IP/12/458) to achieve its three main and closely linked objectives. While the proposals to reform state aid procedures and exempt certain categories of aid from prior notification should primarily allow the Commission to reach faster decision-making and help the Commission focus its enforcement on cases with the highest impact at the EU level, it will also support sustainable growth and contribute to improving the quality of public spending by discouraging aid that does not bring real added-value and distorts competition.
As part of State Aid Modernisation the Commission is currently reviewing a number of other instruments in parallel, including, in particular the Regional Aid Guidelines, the Environmental Aid Guidelines, the Risk Capital Guidelines, the Community Framework for Research and Development and Innovation, the Broadband Guidelines and the Aviation Guidelines.