European Commissioner for Competition Policy
General Block Exemption Regulation for State Aid
Introductory remarks at press conference on adoption of General Block
Exemption Regulation for State Aid
Brussels, 7th July 2008
Ladies and Gentlemen,
Today I would like to present to you a new clear framework, adopted by the European Commission this morning, that will allow Member States to grant state aid targeted at creating jobs, boosting competitiveness and improving the environment without having to notify the Commission.
By adopting these new rules the Commission is delivering on its commitments, in line with the State Aid Action Plan and the Small Business Act, to make it quicker and easier for Member States to give the right kinds of state aid, that benefit the European economy and society as a whole, and not just one company or sector.
These new rules, in the form of a Regulation grant automatic approval for a wide range of aid measures without being notified to the Commission, on condition that the measures comply with the requirements laid down in the Regulation.
The new rules will cut red tape not only by slashing five existing Regulations down to one but also by adding new types of aid that can be given.
This simple, user-friendly and coherent set of rules will encourage Member States to focus their state resources on aid that will be of real benefit to job creation, Europe's competitiveness and improving the environment.
The new framework will reinforce the recent positive trend of state aid spending, where the balance has been shifted away from aid for favoured industries or companies, and towards so-called horizontal aid – which lifts the capacity and competitiveness of the European economy as a whole, and benefits the environment.
The new rules also reduce the administrative burden on public authorities and companies benefiting from such aid, while allowing the Commission to focus its attention on other, more distortive types of aid.
I would like to underline that this new Regulation is not a proposal. It will come into force within a few weeks, once it is published in the European Union's Official Journal.
Some of the most important new categories of aid covered by this reform are:
These market failures need to be addressed. We have started the process over the last two years - today we put the cherry on the cake, by cutting red tape for the most obvious market failures.
A specific objective of the new rules is to facilitate access for small and medium-sized companies to all 26 types of aid that are covered by the Regulation. In nearly all instances SMEs have access to bonuses and are eligible whether they operate in assisted and non-assisted areas.
To give you some concrete examples of aid that does not have to be notified could be used:
We are determined to ease the burden of shifting to the low-carbon economy and that is why environmental protection aid can qualify for exemption. The opportunities presented today show that we can meet the challenge of climate change without wrecking competition in the process.
Access to risk capital will be easiest for small businesses – including seed capital, start-up capital and/or expansion capital. Medium sized businesses will be eligible for seed and start-up capital only.
An excellent example of a recent case that would have been a good candidate for the new system is Polish efforts to encourage the development of a market for venture capital investments in micro-businesses and SMEs. We are keen to support the proper development of risk capital markets across all Member States.
Aid measures that do not qualify under this Regulation for exemption from notification to the Commission will stay subject to the current checks.
In conclusion, the practical effects of these new rules will be:
In the longer term this initiative is going to mean more jobs for Europe and greater competitiveness for European companies.
We need a better system to handle the challenges of globalisation and today is our latest effort to deliver it.
But the fact remains that at its core State aid is not a shield against competition – it is a tool for self-improvement. We can't hide in the corner like little children and pretend that competition isn't there ... but we can do everything in our power to prosper from it.
I look forward to your questions.