Transcript (a) regions
Regional State aid
Regional aid guidelines
2007-2013
Prague
April 2006
DG Competition
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Main policy objectives
Concentration of regional aid to
investment in the least favoured regions
Competitiveness and growth of all
European regions, including flexibility for
Member States and regions to pursue
local regional policy
Continuity; a smooth transition from the
current rules
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Current rules: RAG 2000-2006
Basic principle: exceptional nature of
regional aid
Overall coverage of 42.7% of Community
population (EU-15)
Criteria for allocating the Community
ceiling between Member States
Criteria for selection of regions:
Article 87(3)(a) less than 75% EU GDP/cap.
Broad coherence with objective 1.
Article 87(3)(c) based on indicators chosen
by MS. No coherence with Objective 2.
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Impact of enlargement
Overall coverage increased from
42.7% (EU-15) to 52.2% (EU-25)
(a) regions from 22.0% to 34.2%
(c) regions from 20.7% to 18.0%
Coverage would rise to 55.1% in EU 27
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The context of the revision
The current maps expire on 31.12.2006
DG COMP made use of
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Conclusions of European Councils:
“less and better targeted aid”
Comments submitted by Member States;
Consultations with EP and CoR
Experience with the present RAG;
Literature on the economics and
effectiveness of regional aid
The Third Cohesion report: convergence,
regional competitiveness and employment,
and European territorial co-operation
The different classes of regions post 2006
Article 87(3)(a) regions
ie less than 75% average EU- 25 GDP/cap
Statistical effect regions
(‘phasing out’ regions)
ie less than 75% average EU-15 GDP/cap
(82.2% EU-25 GDP/cap)
Economic development regions
(ex (a) regions with more than 75% average
EU-15 GDP/cap
Low population density regions
less than 12.5 inhabitants km²
Possibly other Art 87(3)(c) regions
Non-assisted regions
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Population coverage under the
RAG 2007-2013
Proposed coverage EU 25
42% + 50% safety net
43.1%
Article 87(3)(a)
27.7%
Statistical effect
3.6%
Economic development
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+ low population density
4.0%
Additional (c) allocation
6.7%
50% Safety Net
1.1%
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Aid in Areas eligible for Article 87(3)(a)
Aid for large companies in NUTS II regions
with GDP/cap below 75% of the EU-25
average
GDP below 45%: 50% gross
GDP below 60%: 40% gross
GDP below 75%: 30% gross
Bonuses
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Small companies + 20%
Medium-sized companies + 10%
Aid in non-assisted regions
No regional investment aid for large
enterprises
Greater flexibility for R&D, innovation,
environmental investments, training etc
Significantly more flexible regime for
SMEs
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Regional aid in the Czech Republic 2007-13
Art. 87(3)(a)
GDP % EU-25
Aid intensity
Strední Morava
52,03
40%
Severozápad
53,29
40%
Strední Cechy
54,35
40%
Moravskoslezsko
55,29
40%
Severovýchod
55,59
40%
Jihovýchod
58,17
40%
Jihozápad
60,41
30%
Total population coverage 2007-2013 88,6 %
7.7% transitional additional coverage 2007-2008
for the Prague region (GDP 147,2%)
under Art.87(3)(c); intensity 10%
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Transitional provisions
Phasing in of reductions in aid intensity,
for:
(a) regions > 15% reduction
economic development regions
Transitional safety net; 66% of current (c)
coverage for 2 years
Two years to phase out operating aid
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RAG, scope and sensitive sectors
No major changes to scope:
RAG apply to all sectors except:
Coal, Fisheries, Production of agricultural
products
Prohibitions on regional investment aid:
Steel (except SMEs), Synthetic fibres
Apply subject to special rules to
Transport, shipbuilding, agricultural
processing and marketing
No other sensitive sectors for investment
aid
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Conditions for granting regional
investment aid – main changes
Clarification of definition of initial
investment
New rules on incentive effect
Maintenance of the investment for at least
5 years (reduced to 3 years for SMEs)
Member States may impose longer
periods
Rules on discounting
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Eligible expenses for investment aid –
main changes
Land, buildings, plant and machinery
no ‘standard base’
Clarification of rules on leasing
‘Moveable’ assets should be new
exceptions; SMEs and takeovers
Consultancy costs for SMEs
More generous treatment of intangible assets:
up to 50% of eligible costs for large firms
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Large investment projects
Integration of MSF into RAG
Automatic scaling down mechanism for eligible
expenses over € 50m
€ 50 -100m -
50% of normal aid intensity
> € 100m
34% of normal aid intensity
-
Transparency mechanism for eligible expenses > €
50m
Notification threshold – aid exceeds maximum
allowed for a project with € 100 m eligible expenses
In depth assessment of investment aid where;
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Beneficiary has more than 25% market share or
Capacity increase >5% in a declining market
Operating aid
Permanent handicaps of the outermost areas
Possibility of a ‘safe-harbour’ for operating aid in
outermost regions, up to 10% of turnover.
Permanent transport aid in the outermost and low
population density areas
Permanent aid to offset depopulation in the least densely
populated areas
Temporary and degressive operating aid to offset
bottlenecks in 3(a) areas
Exclusion of operating aid to financial services sector
Transitional phasing out of operating aid in areas loosing
3(a) status over 2 years
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Enterprise aid
New form of aid to encourage business start-ups in
the assisted areas
Widely defined eligible expenses in first five years
of start-up
Maximum € 3m per enterprise in (a),
€ 2m per enterprise in (c)
€ 1m bonus for (a) regions < 50% EU-GDP, low
population density regions and islands
Intensities
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years 1-3
years 4-5
(a)
35%
25%
(c)
25%
15%
Next steps
Adopted by Commission, end 2005
Proposals for appropriate measures
Maps approved by COM,
1st semester 2006
Exemption regulation for transparent
regional investment aid, Oct 2006
Examination of regional aid schemes 2nd
semester 2006
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Transparency
Obligation to publish all regional aid schemes
on the internet
Possibility to exclude costs incurred before
publication of the scheme from eligible costs
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