CoR welcomes State Aid reform and calls for wider flexibility for regions

Brussels, 12-12-2012 — / — The reform of the EU State Aid regime was among the key issues discussed on 7 December by the Committee of the Regions’ (CoR) Commission for Territorial Cohesion Policy (COTER) and in a bilateral meeting between the CoR rapporteur on the Regional State Aid (RSA) Guidelines 2014-2020, Jean-Paul Denanot (FR/PES), and the European Commission Vice-President and responsible for competition, Joaquin Almunia.

The proposals presented by the European Commission on 5 December to reform state aid procedures have been mostly welcomed by the Committee of the Regions. A week ago, at the November plenary, the CoR adopted an opinion on EU State Aid Modernisation drafted by Clemens Lindemann (DE/PES) which called for the extension of the scope of the enabling regulation and for a clarification of the general block exemption regulation. The Commission proposals partly meets this demand by exempting state aids for culture and heritage conservation and transport for residents of remote regions, when such aid has a social character. The CoR had, however, also requested a wider exemption for non-profit seeking activities in the social, educational and health areas. With regards to state aids for selected broadband infrastructure projects, the CoR considers that further clarification will be needed in the specific guidelines relating to broadband infrastructure.

A consensual request of regions and cities is the call for a revised de minimis regulation, which would raise the threshold for the exemption from notification obligation for aid programmes to €500,000 over a period of three tax years (instead of €200,000 as currently ruled).

During the meeting with Vice-President Almunia, CoR rapporteur Denanot stressed the risk of inconsistency between rules applying to state aids for services of general economic interest (SGEI) and those for regional state aids. Whilst state aid for SGEI is to a large extent considered compatible with the Treaty and therefore exempted from state aid notification, its inclusion in the calculation of the maximum ceiling under the RSA guidelines could lead to a strong deterring effect on public authorities. This point is clearly stated in the draft opinion adopted by the COTER members. According to Denanot: “The Commission may take back with the regional state aid guidelines what it has given with the SGEI state aids rules”.

Among the main requests included in the opinion, a crucial relevance is given to the establishment of a better link between the overall EU strategy on State Aid with the reform of cohesion policy. COTER members recalled that under the terms of the Treaty, the completion of the internal market and, therefore, state aid regulations, must take into account the objectives for cohesion throughout the EU and help achieve them. This consistency must be ensured both at strategic level and at technical level. For example, since the current zoning criteria for Regional State Aid are based on the distinction between convergence regions and competitiveness set within cohesion policy regulation, the CoR calls for the revised RSA to take into account the establishment of the new category of transition regions.

Cohesion policy and Regional State Aid are the two main tools in the hands of regional and local authorities to support economic recovery and jobs creation. In this respect, the CoR will discuss and adopt a resolution on the Cohesion Legislative Package recalling all proposals and requests worked out until now, adding specific positions related to the latest development of the inter-institutional negotiations and the ongoing discussions in the Council on the Multi-Annual Financial Framework 2014-2020 as well as the on going trialogue on the Cohesion Package. The resolution was drafted by COTER chair Marek Wozniak (PL/EPP) and adopted by the commission today.

The final adoption of the draft opinion on Regional State Aid Guidelines 2014-2020 and of the draft resolution on the Legislative Package on Cohesion Policy 2014-2020 is scheduled for the 31 January plenary.

The Committee of the Regions

The Committee of the Regions is the EU’s assembly of regional and local representatives. The mission of its 344 members from all 27 EU Member States is to involve regional and local authorities and the communities they represent in the EU’s decision-making process and to inform them about EU policies. The European Commission, the European Parliament and the Council are obliged to consult the Committee in policy areas affecting regions and cities. It can appeal to the EU Court of Justice if its rights are infringed or it believes that an EU law infringes the subsidiarity principle or fails to respect regional or local powers.

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