The financial meltdown and the economic recession led to massive monetary and budgetary counter-measures. Protectionist urges, such as the use of the doping of state aid, sorely tested the EU Commission’s mandate to maintain fair competition in the internal market.
We now turn to the Commission’s take on factual developments and administrative reforms during this difficult phase. The Commission published a report a few days ago:
Report from the Commission: State Aid Scoreboard ─ Report on State aid granted by the EU Member States ─ Autumn 2009 Update; Brussels, 7.12.2009 COM (2009) 661 final (15 pages).
The summary report focuses on key facts, conclusions, trends and patterns with regard to State aid granted by EU member states in 2008, as well as key policy developments in the context of state aid control. The report is available in English, French and German.
Financial crisis
The Commission notes that the overall level of State aid almost quintupled in 2008 compared to 2007, from less than 0.5 per cent to 2.2 per cent of GDP, almost exclusively as a result of crisis aid to the financial sector.
Crisis aid to the real economy is not covered by the report. It started to be implemented by member states only in 2009 through the Temporary Framework (consolidated version OJEU 7.4.2009 C 83; as further amended by OJEU 31.10.2009 C 261/2).
The Commission’s self-assessment is optimistic:
“The EuropeanCommission's State aid policy was one of the key factors ensuring that this – overall successful – rescue process has been achieved in a coordinated way. It allowed swift implementation of unprecedented support measures and ensured at the same time that the Single Market was kept intact.”
The Commission supports its conclusion by distinguishing between the long term trend to reduce state aid (goal of “less and better targeted aid”) and the sudden surge, caused by crisis measures.
The Commission describes its actions to provide guidelines for crisis aid to the banking sector since the autumn of 2008, striving to maintain a level playing-field between member states as well as supported and unsupported banks.
The enormity of the crisis measures as a whole is illustrated by the following quote (page 9):
“The total maximum volume of crisis measures approved by the Commission between October 2008 and October 2009 amounted to around € 3,632 billion, corresponding to 29% of the EU-27 GDP.”
“Less and better targeted aid”
Long term, aid has increasingly been targeted towards less distorting, horizontal objectives, such as research, development and innovation, the environment, small and medium-sized enterprises (SMEs), employment creation, training and regional economic development.
The Commission is already looking ahead, as shown by its Communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules, published OJEU 19.8.2009 C 195.
The Commission offers an overview of the progress since June towards simplification of state aid rules, through less and better targeted state aid; a refined economic approach; more effective procedures, better enforcement, higher predictability and enhanced transparency; a shared responsibility between the Commission and member states.
The Commission has exclusive competence to evaluate all state aid with the treaty. The member states have to give advance notice of all aid measures not covered by the “de minimis” Regulation or a block exemption. The General Block Exemption Regulation (GBER) is of special importance; Commission Regulation (EC) No 800/2008, published OJEU 9.8.2008 L 214/3.
Outside these exemptions, member states notify both general aid schemes and individual (“ad hoc”) aid measures.
The Commission’s state aid control is now based on a "3–stream system": block exemption (and de minimis), standard assessment and detailed assessment.
From September 2009 the Commission introduced a simplified notification procedure, published OEJU 16.6.2009 C 136/3.
There has been clear progress on the recovery of unlawful state aid. The percentage of illegal and incompatible aid still to be recovered fell from 75% at the end of 2004 to around 9% at 30 June 2009.
In the area of cooperation with national authorities, the Commission reminds the readers of its recent Notice on the enforcement of State aid law by national courts, published OJEU 9.4.2009 C 85/1.
Staff working document
The Autumn 2009 State Aid Scoreboard is accompanied by the more detailed Commission Staff Working Document Facts and figures on State aid in the EU Member States SEC (2009) 1638 (78 pages). The working document is available in English.
EFTA
The Commission’s state aid update mentions that the EFTA Surveillance Authority (ESA) publishes an annual scoreboard on the volume of State aid granted in Iceland, Liechtenstein and Norway.
The EFTA Surveillance Authority’s web pages on State aid offer an overview of the state aid rules in the European Economic Area (EEA) and ESA’s role with regard to Iceland, Liechtenstein and Norway. The legal framework, substantive rules, procedural rules and state aid guidelines are presented on separate web pages.
ESA publishes a newsletter State aid e-news with summaries of its activities, decisions and other issues of interest.
The State aid register contains the full text of the state aid decisions adopted by ESA since 2000.
There is a link to the notification portal and the notification forms.
According to the Complaints page, ESA welcomes information from third parties about potential infringements of state aid rules, and there is practical information for interested parties.
Ralf Grahn
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