Brussels, 23 July 2014
State aid: Commission approves regional aid map 2014-2020 for Cyprus
The European Commission has approved under EU state aid rules Cyprus' map for granting regional development aid between 2014 and 2020. The map is based on the new regional aid guidelines adopted by the Commission in June 2013 (see IP/13/569), which 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 provides the Cypriot authorities with a framework for tackling regional disparities within Cyprus by supporting investment projects that otherwise would not be carried out.”
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 (so-called "aid intensities") for companies in the eligible regions. In order to enable Member States to tackle their own regional disparities, they can make certain areas eligible for aid, provided that they comply with an overall population coverage ceiling. The new map will be in force until 31 December 2020.
The designated areas, a list of regions with 419,713 inhabitants in total, cover 49.94% of Cyprus' population. Cyprus has proposed its assisted areas across the country on the basis of their socioeconomic situation (i.e. GDP per capita). Cyprus selected the assisted areas with a particular emphasis on promoting the tourism, agri-tourism and manufacturing sectors as well as the specific objectives of its regional and rural development policy.
In all eligible areas the maximum level of aid that can be granted to investment projects carried out by large companies is 10% of eligible costs. This percentage can be increased by up to 10 percentage points for medium-sized enterprises and by up to 20 percentage points for small enterprises.
While the population coverage has remained the same as compared to the previous aid map, the aid intensities have slightly decreased. This is in line with the objectives of the new 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 (see IP/13/569). 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 guidelines' period of validity. 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)(c) of the Treaty on the functioning of the European Union (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. The guidelines fix a population coverage ceiling aimed at focusing aid at the most disadvantaged regions. The population coverage is then 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 eligible areas in order to address its internal regional disparities.
The Commission has already approved the regional aid maps of Bulgaria (IP/14/731), Portugal (IP/14/666), Croatia (IP/14/662), Luxembourg (IP/14/661), Ireland (IP/14/583), the UK ( IP/14/582), Lithuania (IP/14/581), Spain (IP/14/580), Austria (IP/14/579), Estonia (IP/14/578), Malta (IP/14/528), Greece (IP/14/527), France (IP/14/526), Denmark (IP/14/525), Romania (IP/14/409), Latvia (IP/14/408), Finland (IP/14/407), Sweden (IP/14/326), Slovenia (IP/14/244), Hungary (IP/14/243), Germany (IP/14/242), Poland (IP/14/180), the Czech Republic (IP/14/105) and Slovakia (IP/14/63).
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The non-confidential version of today's decision will be made available under the case number SA.38814 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.