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European Commission

[Check Against Delivery]

Joaquin ALMUNIA

Vice President of the European Commission responsible for Competition policy

Statement on new state aid rules for R&D and innovation and on the extended notification exemptions of state aid

Press conference

Brussels, 21 May 2014

Today, the Commission adopted new State aid guidelines for Research, Development and Innovation – the so-called "R&D&I Framework".

We are also adopting today a new block exemption regulation – but I will concentrate my initial comments on the new R&D&I guidelines.

These new rules are one of the most important components of the State Aid Modernisation strategy launched in 2012. State aid for RD&I projects constitutes an excellent example of what I call "good aid" – state aid which contributes to a sustainable growth path by providing what the market fails to deliver on its own, improving competitiveness and productivity.

With these new rules it will become easier for EU governments to invest more and more efficiently in R&D and innovation. It will be easier to use state aid as a tool to mobilise private investment.

This will help unlock Europe’s potential in this crucial area.

We all know that Europe is clearly falling short of our objective for 2020 of spending 3% of GDP in research and development.

At present, spending in the EU stands at just above 2%, compared to around 3% in the US and Japan. This difference is mainly due to lower levels of private investment.

These new guidelines will ensure that state aid is used in a way that contributes to addressing this shortcoming.

Taxpayers' money can be used efficiently, as a tool to mobilise private investment in projects that would otherwise not be implemented – by covering the funding gap of these projects.

Of course the rules also ensure that competition in the Single Market – which in itself is also a key factor of innovation - is preserved.

Let me tell you what the main changes are.

Firstly, Member States will have much more flexibility for implementing state aid measures in this field. They will benefit from an exemption from prior notification to the Commission.

For example aid for the construction or upgrade of research infrastructure; aid measures to support innovation clusters; and aid for process and organisational innovation, clearly receive a more favourable treatment, through the combined effect of the new Framework and the new block exemption regulation.

There will also be much higher ex-ante notification thresholds. We have doubled them. For example, Member States can now grant aid for experimental development of up to €15 million per project and per beneficiary without prior Commission approval, as compared to €7.5 million under the previous rules.

Secondly, there will be higher aid levels permissible – the so-called "aid intensities".

For instance, under the new framework Member States will be allowed to grant aid for applied research up to 90% of the eligible costs of a project – as opposed to 60% in the previous rules. This now includes prototypes, pilot projects and demonstrations. As a result, it will be easier to bring innovative products and services to the market.

At the same time, the new R&D&I Framework will make sure that the aid is proportionate and that public funding goes to research projects that would not have happened otherwise – what we call the "incentive effect".

The third characteristic of the new rules is the increased simplification of rules and, I hope, an improved legal certainty for stakeholders.

In sum, the new State aid rules for Research, Development and Innovation will encourage Member States to use aid measures which make a difference, do not create undue distortions and, through the promotion of R&D and innovation, help stimulate growth and job creation.

This piece is an important one of our ongoing state aid reform. I recall that we also adopted in January important guidelines to facilitate the granting of "good aid" to help companies get access to finance – the guidelines on risk finance.

Today, the Commission has also adopted a new Block Exemption Regulation (GBER) in the state aid field.

Through this instrument, we have considerably extended the scope of aid measures which are exempted from notification to the Commission.

The current regulation, adopted in 2008, covers approximately 60% of all aid measures and slightly more than 30% of the aid amounts granted in the EU.

With the new block exemption regulation, about 3/4 of today's state aid measures and 2/3 of aid amounts would be exempted under the revised Regulation. All these aid measures will no longer need to be notified to the Commission.

This will significantly reduce the administrative burden – not only here in Brussels but also at the Member States level, and this is in itself a very positive outcome of the reform.

Of course this requires from us stronger efforts to monitor what is going on with all these measures which have not been notified ex ante. This is our challenge, and I am convinced that in the next years we will be able to reinforce our monitoring tasks to combine the adequate use of state aid, to protect the functioning of the Single Market, with more simplification and trust in the way Member States will make use of this new framework.

Last but not least we have adopted today new transparency requirements.

We are increasing the obligations to publish in a transparent way aid given by Member States when this aid is above 500 000 euros.

These transparency requirements - which I know are not accepted immediately by some people, are a necessary complement of the way we try to simplify the management of state aid and at the same time to guarantee that state aid goes in the right direction, is granted for the good priorities and is not distorting the functioning of our internal market.


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