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STATE AID: The EC published the results of evaluation of EU state aid rules
Content
The European Commission (hereafter „EC“) has published the results of evaluation of state aid rules adopted as a part of State Aid Modernisation package (hereafter „SAM“).
At the beginning of the year 2019 the EC launched the initiative “fitness-check” of current state aid rules with the aim of their (eventual) revision. The assessment took the form of a “suitability check”, which included internal analyses, consultation with the EC and the public, as well as, in some cases, studies prepared by external consultants or targeted consultations of specific stakeholders. The “fitness check” covered the following areas:
At the beginning of the year 2019 the EC launched the initiative “fitness-check” of current state aid rules with the aim of their (eventual) revision. The assessment took the form of a “suitability check”, which included internal analyses, consultation with the EC and the public, as well as, in some cases, studies prepared by external consultants or targeted consultations of specific stakeholders. The “fitness check” covered the following areas:
- General block exemption regulation (GBER),
- De minimis regulation,
- Guidelines on regional state aid,
- Framework for state aid for research, development and innovation,
- Communication on important projects of common European interest (IPCEI),
- Guidelines on state aid to promote risk finance investments,
- Guidelines on state aid to airports and airlines,
- Guidelines on state aid for environmental protection and energy (EEAG),
- Guidelines on state aid for rescuing and restructuring.
The “suitability check” of state aid rules was prepared also with regard to the impending expiration of validity of some rules and resp. their current obsolescence.
Main findings
The “suitability check” showed that the current SAM architecture and state aid rules generally fulfill their purpose. In the future, it will be probably necessary to revise and/or update certain specific rules in response to the latest legislative development, current priorities, market and technology development. Overall, however, it is necessary to interpret the results of this check in the light of the COVID-19 crisis. Although the conclusions of the effectiveness of the check generally appear to be reliable for most rules, there are certain sectors, such as e. g. aviation, where there are uncertainties due to the COVID-19 crisis.
As regards the General block exemption regulation (GBER), there is a space for further expenditure increases in the coming years. The EC is currently constantly examining the limited number of measures concerning high amounts that are necessary to be notified.
The implementation of common assessment principles led to a clearer methodological framework for various state aid rules, which contributes to the achievement of aim to promote "good aid". The SAM further contributed to the significant clarification of relevant state aid rules, although some problematic areas were still identified. The individual rules have been also proved to be largely effective in achieving their specific aims, although the current effectiveness check has also revealed some problems.
In the field of efficiency, the SAM rules made it possible to reduce the administrative burden to some extent, although there appears to be space for improvement, in particular in connection with the clarification of definitions and terms. The analysis also suggests that the SAM rules, with regard to the achieved aim of "good aid", allowed for more efficient government expenditures. In general, it can be said that the SAM system brings benefits not only to public authorities but also to enterprises and indirectly to consumers.
In connection with the relevance of rules, the suitability check indicated that the overall aims of SAM are suitable to meet needs within the EU. The aims of individual state aid rules were largely suitable to meet currents needs within the EU, but they do not fully reflect recent EU policy development and the priorities of the EC for the future, in particular with regard to the Green Deal as well as digital and industrial strategies.
The potential impact and uncertainties brought by the crisis caused by COVID-19 cannot yet be assessed.
In general, within the control it was shown that the existence of state aid rules has a clear added value for the EU, recognized by parties involved, as it brings similarities in the concept of Member States' compensation systems, reduces administrative costs and provides clarity, stability and predictability. It is therefore not necessary to reform the SAM state aid system as such.
As already mentioned, the individual rules should be revised and/or updated, including clarifications, further simplification as well as adjustments to reflect the latest legislative development, current priorities, market and technology developments. It is also necessary to focus on aligning the rules with the future challenges and priorities of the EC. This is particularly important, because state aid can and should contribute to green trade as well as to digital and industrial strategies.
In the short term, it is necessary to adjust mainly GBER, regional aid guidelines, RDI framework, IPCEI communication, risk financing guidelines and EEAG. It is also necessary to revise STEC (notice on short-term export credit insurance) to bring it into line with the SAM standard. In addition, adjustments of de minimis regulation, aviation guidelines and rescue and restructuring guidelines are necessary in the medium term.
More information can be found in a press release of the EC, which is available at www.ec.europa.eu/commission/presscorner/detail/en/ip_20_2008.
Main findings
The “suitability check” showed that the current SAM architecture and state aid rules generally fulfill their purpose. In the future, it will be probably necessary to revise and/or update certain specific rules in response to the latest legislative development, current priorities, market and technology development. Overall, however, it is necessary to interpret the results of this check in the light of the COVID-19 crisis. Although the conclusions of the effectiveness of the check generally appear to be reliable for most rules, there are certain sectors, such as e. g. aviation, where there are uncertainties due to the COVID-19 crisis.
As regards the General block exemption regulation (GBER), there is a space for further expenditure increases in the coming years. The EC is currently constantly examining the limited number of measures concerning high amounts that are necessary to be notified.
The implementation of common assessment principles led to a clearer methodological framework for various state aid rules, which contributes to the achievement of aim to promote "good aid". The SAM further contributed to the significant clarification of relevant state aid rules, although some problematic areas were still identified. The individual rules have been also proved to be largely effective in achieving their specific aims, although the current effectiveness check has also revealed some problems.
In the field of efficiency, the SAM rules made it possible to reduce the administrative burden to some extent, although there appears to be space for improvement, in particular in connection with the clarification of definitions and terms. The analysis also suggests that the SAM rules, with regard to the achieved aim of "good aid", allowed for more efficient government expenditures. In general, it can be said that the SAM system brings benefits not only to public authorities but also to enterprises and indirectly to consumers.
In connection with the relevance of rules, the suitability check indicated that the overall aims of SAM are suitable to meet needs within the EU. The aims of individual state aid rules were largely suitable to meet currents needs within the EU, but they do not fully reflect recent EU policy development and the priorities of the EC for the future, in particular with regard to the Green Deal as well as digital and industrial strategies.
The potential impact and uncertainties brought by the crisis caused by COVID-19 cannot yet be assessed.
In general, within the control it was shown that the existence of state aid rules has a clear added value for the EU, recognized by parties involved, as it brings similarities in the concept of Member States' compensation systems, reduces administrative costs and provides clarity, stability and predictability. It is therefore not necessary to reform the SAM state aid system as such.
As already mentioned, the individual rules should be revised and/or updated, including clarifications, further simplification as well as adjustments to reflect the latest legislative development, current priorities, market and technology developments. It is also necessary to focus on aligning the rules with the future challenges and priorities of the EC. This is particularly important, because state aid can and should contribute to green trade as well as to digital and industrial strategies.
In the short term, it is necessary to adjust mainly GBER, regional aid guidelines, RDI framework, IPCEI communication, risk financing guidelines and EEAG. It is also necessary to revise STEC (notice on short-term export credit insurance) to bring it into line with the SAM standard. In addition, adjustments of de minimis regulation, aviation guidelines and rescue and restructuring guidelines are necessary in the medium term.
More information can be found in a press release of the EC, which is available at www.ec.europa.eu/commission/presscorner/detail/en/ip_20_2008.