PURPOSE: to amend the provisions of Council Regulation (EC) No 994/98 (Enabling Regulation) in order to modernise State aid control.
PROPOSED ACT: Council Regulation.
BACKGROUND: Council Regulation (EC) No 994/98 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid (the ‘Enabling Regulation’) allows the Commission to declare, by means of regulations, that certain categories of State aid are compatible with the common market and are exempted from the notification requirement provided for in Article 108(3) of the TFEU.
The categories concerned include de minimis aid, aid to small and medium-sized enterprises, aid for research and development, environmental protection or employment and training, and aid that complies with the map approved by the Commission for each Member State for the grant of regional aid.
The Commission indicated in its Communication on State aid Modernisation of 8 May 2012 that State aid enforcement should focus on cases with the biggest impact on the internal market. This implies:
IMPACT ASSESSMENT: no impact assessment was carried out.
LEGAL BASIS: Article 109 TFEU, which allows the Council to make any appropriate regulations, in particular to determine the conditions in which Article 108(3) TFEU shall apply, and the categories of aid exempted from that procedure. The Council must decide by a qualified majority on a proposal from the Commission and after consulting the European Parliament.
CONTENT: this proposal is a key element in State Aid Modernisation (SAM), an initiative launched by Commission. It should contribute to the overall objectives of the Union, in particular the objective of focusing State aid enforcement on cases having the biggest impact on the internal market and to the EU 2020 strategy to foster growth in a strengthened, dynamic and competitive internal market.
New categories proposed for inclusion in the Enabling Regulation: the proposal to include certain new categories in the Enabling Regulation entails neither the immediate block exemption of all these categories, nor does it mean that all measures within a category would be block-exempted in their entirety. Rather, it enables the Commission to adopt block exemptions gradually, when experience acquired is sufficient to allow the Commission to define clear compatibility criteria for certain types of aid measures, ensuring that the effect on competition and trade between Member States is limited.
The Commission proposes to include new categories in the Enabling Regulation:
Specifying block-exempted aid categories: current rules specify that, for each category of block-exempted aid, the thresholds should be expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts.
The Commission proposes to define the thresholds not only in terms of aid intensities or maximum aid amounts, but also in terms of maximum level of State support, whether it qualifies as State aid in the meaning of Article 107(1) TFEU or not.
Provisions concerning transparency: the current Regulation provides that on implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems.
The obligation to publish the above summaries in the Official Journal should therefore be replaced by the obligation to publish on the Commission’s website.
The Commission states that more frequent revisions of the Enabling Regulation may in the future be needed, in particular to have due regard to the investments required by and compatible with the development of the internal market, in the light of the experience gained. Following a decision on the next Multiannual Financial Framework, the Commission will also assess without delay the possibilities to simplify the State aid procedures for projects co-financed under the EU structural policies.
BUDGETARY IMPLICATION: the proposal has no negative implications for the Union budget.