EU Examines State Aid In Acceding And Candidate Countries

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

29 March 2006

Publishing the latest edition of its State Aid Scoreboard this week, the European Commission paid especial attention to the situation in the acceding countries of Bulgaria and Romania.

Over the period 2002-2004, the average amount of state aid (less agriculture, fisheries and transport aid) awarded per year was estimated at EUR65 million for Bulgaria and EUR981 million for Romania, the Scoreboard revealed.

In Bulgaria, total state aid represented 0.36% of GDP which is significantly lower than the average for the ten new Member States (1.35%) and indeed lower than the EU-25 average (0.49%).

In Romania, total state aid was significantly higher, representing 1.86% of GDP. However, this high share is largely due to extensive reforms during the transition to a market economy, privatisation and restructuring companies in difficulty.

Competition Commissioner Neelie Kroes observed that:

"Bulgaria and Romania have made good progress towards a market economy and towards establishing a credible state aid enforcement record. However, further efforts are needed to ensure that state aid is used in the most effective way."

"The Scoreboard provides an important insight into the state aid situation in the two countries and I particularly welcome the considerable efforts of the national competition authorities to fulfil their transparency obligations.”

The latest Scoreboard also provides an overview of the state aid situation in the candidate countries Croatia, Turkey and the former Yugoslav Republic of Macedonia as well as in the potential candidate countries, Albania, Bosnia and Herzegovina, Serbia and Montenegro, and Kosovo.

Among the candidate countries, Croatia and the former Yugoslav Republic of Macedonia have adopted national legislation on state aid and established national state aid monitoring authorities. In contrast, Turkey has not yet established an operationally independent monitoring authority nor adopted any legislation.

As regards the potential candidate countries, Serbia and Montenegro and Albania have recently established state aid monitoring structures. Bosnia and Herzegovina has as yet no authority responsible for overseeing state aid granted in the country.

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