Transcript Presentation of Ian Rodgers

Globalisation, financial crisis,
innovation and climate change:
challenges for a modern State aid
policy
Ian Rodgers
Chairman, BUSINESSEUROPE State Aid
Working Group
Director, UK Steel
State aid – general principles
• Minimise state interference in markets,
allowing the most competitive firms to
thrive.
• Requires consistency of approach across
the whole of the EU.
• But rules must be clear and predictable for
companies;
• And transparent in their application.
State aid and globalisation - 1
• Europe should not attempt to use aid to
compete with low cost economies, apart
from:
– Rescue & restructuring aid
– Regional investment aid
• Focus on skills base and innovation.
State aid and globalisation - 2
• The EU should make full use of WTO rules
to discipline overseas subsidies and other
market-distorting practices.
• DDA should have been an opportunity to
improve their application.
• Write additional disciplines into future
FTAs.
The financial crisis
• A return to worldwide subsidisation and
protectionism would prolong the crisis.
– The EU has an opportunity to lead by
example.
• Communication on aid to financial
institutions strikes the right balance:
– Art. 87(3)(b) invocation is justified;
– Impacts on competitors are minimised;
– Rapidity of response applauded.
State aid and innovation
• 2006 Framework is an improvement.
• But serious concerns that some aspects
will deter R&D funding, particularly:
– Detailed assessment, and requirement for
counter-factual incentive effect analysis.
– Rigid categorisation of types of R&D.
• Shortcomings perpetuated in block
exemption Regulation.
State aid and climate change
• New guidelines expand the scope for
encouraging investment in, and operation
of, carbon-efficient technologies:
– Negative: incentive test is repeated.
– Positive: distortions of competition through
energy savings are prevented.
• CCS correctly to be considered later.
State aid and the EU Emissions Trading
Scheme: post-2012

The draft Directive as published by the
Commission could drive energy-intensive
manufacturing out of the EU.

Amendments to correct this are opposed by DG
Competition because of their perceived
relationship with competition/state aid policy.

However, neither articles 81 to 86 nor articles 87 to
89 are applicable.
UK Steel
Conclusion
• The EU’s unique state aid rules are a vital
component of a vigorous and enterpriseoriented single market.
• We welcome:
– The process of continuous appraisal and
improvement;
– The Commission’s openness to input from
stakeholders.