Brussels, 9 April 2014
State aid: Commission approves regional aid map 2014-2020 for Latvia
The European Commission has approved under EU state aid rules Latvia's map for granting regional development state aid between 2014 and 2020 within the framework of the new regional aid guidelines adopted by the Commission in June 2013 (see IP/13/569). The new guidelines set out the conditions under which Member States can grant state aid to businesses for regional development purposes. The guidelines aim to foster growth and greater cohesion in the Single Market.
Commission Vice President in charge of competition policy Joaquín Almunia said: “The new regional aid map establishes a clear framework allowing the Latvian authorities to support businesses throughout the country for the period 2014-2020. It will also facilitate the preparation and implementation of regional development programmes co-financed by the European Structural Funds.”
Under Latvia's regional aid map, the entire territory of Latvia will be eligible for regional aid. The map also sets the maximum aid levels (so-called "aid intensities") for large companies carrying out projects in the country at 35% of the total investment cost. For investments carried out by SMEs, these percentages can be increased by 10 and 20 percentage points. The map will be in force between 1 July 2014 and 31 December 2020.
Under the regional guidelines, areas which have a GDP per capita below 75% of the EU average are eligible in priority for regional investment aid, as the main purpose of regional aid is to foster the development of the less advantaged regions of Europe. Latvia has a GDP per capita of 55.33% of the EU average.
The regional aid guidelines set out the rules under which Member States can grant state aid to companies to support investments in new production facilities, or to extend or modernise existing facilities, in the less advantaged regions of Europe. The ultimate purpose of regional state aid is to support economic development and employment. The regional guidelines contain rules on the basis of which Member States can draw up their regional aid maps for the guidelines' period of validity (i.e. 2014-2020). The maps identify in which geographical areas companies can receive regional state aid and at what proportion of the eligible investment costs ("aid intensity"). Eligible costs are the part of the total investment costs that may be taken into account for the calculation of the aid.
Article 107(3)(c) TFEU allows regional state aid to facilitate the development of certain economic activities or of certain economic areas where it does not adversely affect trading conditions to an extent contrary to the common interest. The regional aid guidelines define these as areas of a Member State which are disadvantaged either in relation to the EU average, or in relation to the national average. Moreover, the regional aid guidelines identify sparsely populated areas as eligible for this type of aid. Sparsely populated areas are defined as areas with less than 8 inhabitants per km² or less than or 12.5 inhabitants per km², depending on their location. In such areas higher levels of aid can be granted to investment by large enterprises (15% instead of 10% in other areas eligible under this provision). Transport aid may also be granted in sparsely populated areas, unlike in other 107(3)(c) areas. In addition, the regional aid guidelines allow to make areas facing socioeconomic problems eligible for support under 107(3)(c) up to a certain population coverage. Should a Member State not make full use of the population coverage for such areas, it is possible to retain the difference as a population reserve. The population reserve thus established may be used for adding new areas in this category in the future.
The non-confidential version of today's decision will be made available under the case number SA.38385 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News