The European Commission has adopted a Guidance paper setting out criteria for the in-depth assessment of regional aid for large investments projects. Based on the State Aid Action Plan for 2005-2009, the guidance seeks to explain the economic approach taken by the Commission under formal investigation proceedings of such aid, as foreseen by the Regional Aid Guidelines 2007-2013. It is thus aimed at helping public authorities and companies understand how best to present these regional aid projects, with a view to taking decisions faster.
According to the Regional Aid Guidelines 2007-2013, large investment projects above certain thresholds must be notified individually to the Commission as they may carry a higher risk of distorting competition. The Commission will conduct an in-depth assessment when the aid beneficiary has a market share of more than 25 per cent or the production capacity created by the project exceeds 5 per cent of the market (while the growth rate of the product market concerned is below the European Economic Area GDP growth rate).
In conducting this assessment, the Commission uses a balancing test that weighs the positive effects brought about by the notified aid against the negative impact of any potential distortions of competition. Public authorities and companies concerned should therefore provide information on any positive effects of the aid, including its appropriateness, proportionality and incentive effect.