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Speech - Press conference on the competition decisions

European Commission - SPEECH/13/1082   18/12/2013

Other available languages: none

European Commission

Joaquín Almunia

Vice President of the European Commission responsible for Competition Policy

Press conference on the competition decisions

Press conference

Brussels 18 December 2013

I will comment this morning some of the decisions the Commission adopted today in the field of competition policy.

Today I am launching a public consultation on a proposal for revised State aid rules for environmental protection and energy.

I am seeking the views of Member States and stakeholders on the draft we have prepared, with a view to adopting new guidelines in the first half of 2014.

This new guidelines are an important part of the State Aid Modernisation reform, and will lead to the adoption of an EU-wide framework for state aid in these areas for the 2014-2020 period. The existing rules on state aid for environmental protection will be thoroughly updated and their scope will be extended. For the first time, EU state aid guidelines will cover state aid in the energy sector in general and not only environmental aid.

The new guidelines aim to contribute to the achievement of the EU's 2020 objectives.

There is an ongoing debate in many Member States on what kinds of measures are needed to achieve these objectives and how existing policies should evolve. By the way, I recall you that the European Union respects the choice that Member States make on their own energy mix.

At the same time, however, the existence of a common framework is indispensable if we want an internal energy market that works smoothly and without distortions of competition.

In this context, what state aid rules can do is help Member States achieve their and the Union's policy objectives through well-designed measures, adjusting to changes in the market and tackling market failures in a cost-effective way. By ensuring that public subsidies are well-designed, we can avoid both any waste of taxpayers' money and minimise any competition distortions in our internal market.

This is particularly important in the field of public support to renewable energy sources. Today, some schemes tend to shelter renewables from price signals and lead to market distortions.

Renewable energy support schemes should be flexible to respond to falling production costs. Moreover, as they mature, renewable energies should be gradually exposed to market prices and support should be focused on the less deployed technologies. For this reason I propose to progressively introduce more market-based instruments such as tenders, certificates and market premiums.

In addition, keeping down the costs of supporting renewable sources will help Europe maintain its lead in decarbonisation and will also be good for the competitiveness of our industry.

Some degree of state intervention to diminish energy prices may sometimes be justified to preserve the international competitiveness of our industries.

The Guidelines therefore envisage allowing state aid in well-justified cases, through exemptions for energy-intensive industries which are particularly exposed to international competition. Indeed, in the absence of an international agreement on climate change, the charges for financing renewables can be difficult to bear for some undertakings facing competition from third countries with lower environmental standards.

Let me mention, on this chapter, that the Commission has decided today to open an in-depth investigation into one particular case, the German renewables energy act 2012 – the so-called EEG Act.

We are not investigating the whole support to renewables. The main focus of the investigation is the reduction for energy intensive companies of the surcharge that serves to fund renewables. We received various complaints from consumers and competitors on this.

The Commission must therefore investigate this particular matter in depth. Nobody can be surprised by the fact that we apply EU law, which obliges us to look at every complaint we receive and to investigate them in-depth if necessary.

We will in particular look at whether these reductions are proportionate and examine their impact on competition in Germany and in the EU.

Going back to the guidelines, I also propose for the first time to explain the conditions under which we can allow state aid for cross-border energy infrastructure.

Another challenge that the draft guidelines seek to address is the risk of under-investment in new power plants in Europe.

Some EU countries are planning to introduce so-called “capacity mechanisms” to encourage producers to build new generation capacity or prevent them from shutting down existing plants.

We propose in the draft the inclusion of state aid rules to avoid that these mechanisms unduly distort competition and favour national generation. Such rules would allow this form of support on strict conditions and when there are no alternatives, such as better interconnections and demand-side responses.

Finally, the new guidelines will help achieve broader environmental and climate objectives. An important element of climate change strategies is to increase resource efficiency and reduce energy consumption. The rules will allow for public support to measures included in the Energy Efficiency Directive.

I am looking forward to receiving observations and submissions from all stakeholders and the public on our proposals. We will examine them thoroughly before, as I said, adopting new guidelines in the first semester of 2014.

We took another decision today in the field of energy: we have opened an investigation into the measures notified by the UK to subsidise the construction and operation of a new nuclear power plant at Hinkley Point. Through a feed-in tariff, the notified scheme propose that the operator of the plant would receive a stable revenue for a period of 35 years despite the volatility of the electricity price. We need to investigate this in-depth to check whether this is compatible with state aid rules. In particular we must look at whether state aid is truly needed and, if the answer is positive, whether the level of state support is justified. Since there are no provisions on aid to nuclear power in our guidelines – and there will not be any in the future guidelines either – we will carry out this assessment directly under the Treaty rules.

Let me now say a few words on the antitrust decision that the Commission took today in the transport sector. We decided to make legally binding the commitments proposed by Deutsche Bahn to solve our competition concerns in the German rail transport market.

We were worried that Deutsche Bahn, through its subsidiary DB Energie, was abusing its dominant position in the supply of traction current – the specific electricity that trains need to operate on the rail network. We were concerned that the traction current prices for railways undertakings which compete with Deutsche Bahn – the incumbent – were too high and did not allow them to compete profitably. This is what we call a possible 'margin squeeze'.

The final package of commitments proposed by Deutsche Bahn, which was improved following a market test, remove our concerns.

Whereas today, Deutsche Bahn's subsidiary DB Energie is the sole provider of traction current, now other providers will be able to use its electricity network, so railway undertakings will be free to choose. DB Energie will also make a number of changes to its pricing system, putting an end to our concerns about the margin squeeze.

More concretely, this means railway undertakings will have the possibility to compete profitably with Deutsche Bahn. A more competitive market will translate into lower prices and better services for consumers. In a sector where competition has been slow to develop following liberalisation, today's decision illustrates how the enforcement of antitrust rules can help make rail markets function better in Europe.

Finalmente, hemos adoptado hoy varias decisiones relativas al fútbol.

Hemos decidido abrir la investigación sobre 3 casos que afectan a clubs de fútbol españoles. En primer lugar, la Comisión va a investigar los posibles privilegios fiscales otorgados al Real Madrid CF, el Barcelona CF, el Athletic Club de Bilbao y el Club Atlético Osasuna.

Otra investigación examinará si una permuta de terrenos bien conocida entre el Ayuntamiento de Madrid y el Real Madrid CF incluía algún tipo de ayuda estatal en beneficio del club.

Una tercera investigación examinará si los avales concedidos por el Instituto Valenciano de Finanzas para préstamos utilizados para financiar a tres clubes de la Comunidad Valenciana, el Valencia CF, el Hércules CF y el Elche CF, cumplieron con las normas sobre ayudas de estado.

Estamos abriendo estas tres investigaciones sin prejuzgar su desenlace.

Hemos adoptado finalmente una decisión que considera compatible con el régimen de ayudas de Estado el apoyo a la mejora y modernización de 9 estadios en Francia, como preparación de la celebración en 2016 en ese país de la próxima Eurocopa de selecciones nacionales.

Muchas gracias.

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