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On 8 May 2012, the European Commission announced the objectives
of a reform of EU state aid control, which it aims
to have in place by the end of 2013. The reform is part of the
EU's wider agenda of fostering growth and creating appropriate
conditions for economic recovery to take off and endure.
The European Commission notes that the complexity of the current
rules as well as of the current procedural framework for state aid
are challenges to state aid control.
The reform has three main objectives:
to foster sustainable, smart and inclusive growth;
to focus European Commission scrutiny on cases with the biggest
impact on the internal market; and
to streamline the rules and provide for faster decisions.
The European Commission wants to ensure that the
main elements of this reform enter into force at the same time.
This will involve proposals for new legislation being adopted in
autumn 2012 and the main instruments of the package being adopted
by the end of 2013.
Fostering growth
The European Commission states that modernised state aid control
should facilitate the treatment of aid which is well-designed,
targeted at identified market failures and objectives of common
interest and the least distortive. It notes that such aid will best
contribute to growth when it targets a market failure and thereby
complements, not replaces, private spending.
The European Commission continues that state aid will be effective
in achieving the desired public policy objective only when it has
an incentive effect i.e. it induces the aid beneficiary to
undertake activities it would not have done without the aid.
As part of the growth aim, the European Commission will develop
common principles for the compatibility assessment of national
support projects and revise and streamline some existing texts,
such as the environmental, regional, R&D&Innovation and
risk capital guidelines, which could be aligned and possibly
consolidated. Also rescue and restructuring guidelines for
non-financial firms will be revised.
Financial institutions will be interested to note that the
Commission commits to a new set of rules for rescuing and
restructuring financial institutions for the post-crisis
environment "when market conditions permit".
Focusing on cases with the biggest impact
The European Commission specifically envisages:
(i) a possible review of the state aid de minimis Regulation, to
determine whether the threshold is still appropriate;
(ii) possibly allowing the Commission to make
changes to the types of aid which are exempted from the
notification requirement. These could include aid for culture, aid
to make good damage caused by natural disasters and aid to (partly)
EU-funded projects;
(iii) revising and possibly extending the general
state aid block exemption for the categories of aid covered by the
changes proposed at (ii) above.
The European Commission notes that should it
increase the size and scope of aid measures exempt from the
notification obligation, Member States' responsibilities for
ensuring the correct enforcement of state aid rules would
increase.
As part of this objective, the European Commission emphasises the
need for EU Member States to take more responsibility in designing
and implementing support measures and to improve co-operation with
the European Commission in terms of quality and timeliness of
submitting information and preparing notifications.
The Commission also wishes to see more effective national systems
(including private enforcement) to ensure that state aid measures
which do not require prior notification nonetheless comply with EU
law.
Streamlined rules and faster decisions
This part of the package comprises:
clarifying the key concepts relating to the notion of state aid
"with a view to contributing to an easier
implementation"; and
enabling the European Commission to set priorities for
complaints handling, rather than being obliged to examine all
allegations of potential aid, as is the current position. Also, the
European Commission wants better information gathering tools from
market participants, so as to deliver decisions within
business-relevant timelines. Business will no doubt welcome more
realistic timelines, but will be keen to understand the scope of
these new information gathering tools.
This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
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to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.
The original publication date for this article was
08/05/2012.
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