There have been a number of state aid developments during the course of 2006. Here are some of the most significant:
New regional aid guidelines
On 1 January 2007, the European Commission adopted new regional aid guidelines under the EC Treaty state aid rules. These Guidelines will apply from 2007 to 2013. The Guidelines set out the rules for allowing state aid that promotes the development of poorer regions, covering aid such as direct investment grants and tax reductions for companies. The new Guidelines re-focus regional aid on the most deprived regions of the enlarged union. Regions with less than 75% of the EU-25 average per capita GDP (i.e. disadvantaged) qualify for the highest rates of aid under article 87(3)(a), as well as operating aid. These regions constitute 27.7% of the EU-25 population.
Draft guidelines on state aid and risk capital
In 2006, the Commission published draft guidelines and an explanatory memorandum on state aid and risk capital. The Commission's former Communication on State Aid and Risk Capital, adopted in 2001, expired in August 2006. The new draft guidelines explain that they only apply to risk capital schemes targeting micro, small and medium size enterprises. In addition, the Commission highlighted in the draft guidelines that risk capital can amount to aid at three levels: the investors, the investment fund and the target companies. The Commission intends to look at each of these three levels.
The Commission will apply a number of indicators to assess the incentive effect of the necessity of the risk capital aid measure. Where the aid measure meets certain criteria laid down in the guidelines, it will be deemed compatible with the Common Market. The draft explanatory memorandum that accompanies the draft guidelines provides further explanation and details the rationale behind the Commission's approach in the draft communication.
Regulation on small subsidies
The European Commission has adopted a Regulation exempting small subsidies from the obligations notified in advance for clearance by the Commission under EC Treaty state aid rules. Under the new Regulations, aid of up to 200,000 Euros, granted over any period of three years will not be considered as state aid. Loan guarantees will also be covered to the extent that the guaranteed part of the loan does not exceed 1,500,000 Euros. The Regulation takes account of comments received from a series of public consultations during the course of 2006. It constitutes one of the cornerstones of the State Aid Action Plan designed to simplify the state aid rules. The Regulation entered into force on 1 January 2007.
According to the old de minimis regulation (see IV/00/1415), a State's financial support of less than 100,000 Euros over a period of three years in favour of a given company is deemed to have no substantial effect on competition and trade between Member States, and does not, therefore, constitute state aid. Raising the ceiling to 200,000 Euros takes into account economic developments since the de minimis ceiling was last increased. Owing to the relatively small size of companies in the road transport sector, however, the ceiling will remain at 100,000 Euros in that sector.