EC Outlines Progress On State Aid Reform

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 February 2006

The European Commission last week published the results of its public consultation on the State Aid Action Plan.

The consultation showed that stakeholders broadly endorse the principles and practical proposals set out in the document.

In June 2005, the Commission published its State Aid Action Plan for public consultation.

The document outlined the guiding principles for a comprehensive reform of state aid rules over the next five years. In particular the document set out how the Commission intends to use the EC Treaty’s state aid rules to encourage Member States to contribute to the Strategy for Growth and Jobs by focussing aid on improving the competitiveness of EU industry, creating sustainable jobs, ensuring social and regional cohesion, and improving public services.

The Commission also made proposals to simplify and rationalise the current rules, and reduce the administrative burden, so that less aid has to be notified and decision-making is accelerated.

Competition Commissioner Neelie Kroes announced that:

“I am pleased to see support for state aid policy reform. The Commission is determined to assist Member States towards less and better targeted aid”.

With regard to the state aid rules themselves, most comments focused on:

• The revision of rules applicable to state aid for R&D and innovation;
• The proposal to create a general block exemption regulation which will authorise state aid without a need to notify the measure to the Commission;
• The review of the regulation specifying the amount below which a subsidy is not considered state aid (the de minimis regulation); and
• The new rules on services of general economic interest and regional aid, which were adopted in 2005.

Regarding reforms already put in place, the EC revealed that a package of measures on services of general economic interest was adopted in July 2005, a consultation on State Aid and Innovation was launched in September, and new regional aid guidelines for 2007-2013 were adopted in December.

Recommended