Brussels, 9 July 2014
State aid: Commission adopts revised guidelines for supporting firms in difficulty
In the context of its State Aid Modernisation (SAM) initiative, the European Commission has revised its rules for assessing Member States' support measures to rescue and restructure companies in difficulty. The new guidelines aim to ensure that public funding is channelled where it is needed most and that investors in failing firms carry their fair share of the costs of restructuring, rather than leaving the burden to taxpayers. The rules adopted apply only to non-financial firms in difficulty; a separate set of rules is in place for banks and other financial institutions (see most recently IP/13/672). The new guidelines will enter into force on 1 August 2014 (see also MEMO/14/473).
Joaquín Almunia, Commission Vice-President in charge of competition policy, said: "Today we have made another important step in the modernisation of state aid control. The new rules on aid for firms in difficulty ensure that public funding is granted only where it genuinely saves jobs and know-how on a lasting basis, and after the company owners have contributed their fair share of the costs."
State aid granted by Member States to companies in financial distress keeps companies alive that would otherwise have exited the market. Such aid has a high potential to distort competition in the Single Market: It shifts the burden of structural adjustment to others and puts the more efficient and innovative players who receive no such aid at a disadvantage. Such aid also risks impairing economic growth, since the exit and replacement of inefficient firms is one of its key drivers, and it could waste taxpayers' money. For all these reasons, it is subject to strict conditions.
The new guidelines replace the previous ones adopted in 2004 (the so-called "Rescue and Restructuring" guidelines). Some of its key principles remain unchanged:
The main changes in the guidelines adopted today are the following:
MEMO/14/473 explains the new rules in more detail, and what has changed. The text of the new guidelines is available at: http://ec.europa.eu/competition/state_aid/legislation/horizontal.html#rescue
See also policy brief: http://ec.europa.eu/competition/publications/cpb/2014/009_en.pdf
These new rules are an important component of the Commission's State Aid Modernisation initiative launched in 2012 (see IP/12/458), which aims to reform state aid control in order to foster "good" aid measures that boost economic growth and further other objectives of common EU interest, while discouraging "bad aid" which distorts competition in the Single Market and wastes taxpayers' money. The reform package also aims to focus the Commission’s scrutiny on cases with the biggest impact on competition.
The Commission has already reformed its state aid procedures (see IP/13/728) and considerably extended the scope of exemptions of certain categories of aid measures from prior notification to the Commission (see IP/14/587). In addition, the Commission has adopted new guidelines on state aid for broadband (see IP/12/1424), regional development (see IP/13/569), cinema (see IP/13/1074), airports and airlines (see IP/14/172), risk finance (see IP/14/21), energy and environment (see IP/14/400), research, development and innovation (see IP/14/586) as well as important projects of common European interest (see IP/14/673).
The new guidelines replace a set of rules on the rescue and restructuring of companies that have been in force since 2004 (see IP/04/856). They were originally due to expire in 2009, but have been extended twice, most recently in 2012 (see IP/12/1042) to avoid pre-empting the discussions on the modernisation of state aid policy (see IP/12/458).
The Commission started the review that led to the adoption of the new rules in December 2010, and invited stakeholders to comment on a draft set of rules in November 2013 (see IP/13/1037). The guidelines adopted today draw on the results of that consultation as well as the Commission's experience in applying the existing rules and the principles of the state aid modernisation agenda.