Brussels, 7 May 2014
State aid: Commission approves Maltese regional aid map 2014-2020
The European Commission has approved under EU state aid rules Malta's map for granting state aid between 2014 and 2020 within the framework of the Commission's new regional aid guidelines adopted 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. They aim to foster growth and greater cohesion in the Single Market.
Commission Vice President in charge of competition policy Joaquín Almunia said: “Under the new guidelines, Malta's entire territory continues to be eligible for regional aid. This will allow the Maltese authorities to support regional investment in line with the objectives of EU state aid policy and in a way that also ensures the continuity of the Maltese regional policy.''
A regional aid map defines the regions of a Member State eligible for national regional investment aid under EU state aid rules and establishes the maximum aid levels for companies in the eligible regions. Under the guidelines, Member States can make certain areas with a GDP per capita of the EU average eligible for aid to tackle their own regional disparities, provided that they comply with an overall population coverage ceiling.
Malta's new map will be in force between 1 July 2014 and 31 December 2020. It defines the entire territory of Malta as eligible for state aid under this provision.
The maximum level of state aid (so-called "aid intensities") for investment projects carried out by large companies is 15% until 31 December 2017 and 10% between 1 January 2018 and 31 December 2020. These aid intensities can be increased by 10 percentage points for medium-sized enterprises and by 20 percentage points for small enterprises.
Compared to the previous map, the overall aid intensity has dropped by 15 percentage points for the period 2014-2017 and by 20 percentage points for the period 2018-2020, while the population coverage remains identical. This is in line with the overall approach of the Regional Aid Guidelines, which aim at focusing support on the most disadvantaged regions of Europe.
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 in the less advantaged regions of Europe, or to extend or modernise existing facilities. The ultimate purpose of regional state aid is to support economic development and employment. The regional aid guidelines contain rules on the basis of which Member States can draw up regional aid maps valid throughout the period of validity of the guidelines. 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. On the basis of the guidelines, the Commission adopts a regional aid map for each Member State.
Article 107(3)(a) of the Treaty on the Functioning of the European Union (TFEU) allows Member States to grant state aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment. The regional aid guidelines define these as regions with a GDP per capita below 75% of EU average and outermost regions. There are currently no such regions in Malta.
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 (below 90% of the EU average), or in relation to the national average. The population coverage is distributed between Member States according to socioeconomic criteria which take into account regional disparities, including unemployment, at both EU and national levels. It is then for each Member State to decide in its regional map how to best use this room for manoeuvre to define more eligible areas in order to address its internal regional disparities. The whole territory of Malta is eligible for regional aid under this provision in the period 2014-2020.
The non-confidential version of today's decision will be made available under the case number SA.38468 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