State aid and public procurement: For or against European firms?

Against the background of the current economic crisis, the European Union should make the best use of taxpayers’ money. At its November plenary session, the EESC called for better access to public procurement and more flexible state aid rules.

19-11-2012 — /europawire.eu/ — On 14 November, the EESC endorsed two opinions on e-procurement and the modernisation of state aid. At a time of public budget cuts and increasing global competition, the EESC wants to ensure that EU companies enjoy equal access to public funding both in procurement and state aid cases.

e-procurement

“In spite of EU efforts to promote e-procurement among Member States, some of them are reluctant to cooperate and open up the public procurement market to competition. The level of e-procurement remains very low in countries such as Italy, where it represents 4% of overall procurement”, says Edgardo Maria Iozia (Workers’ Group, Italy), rapporteur of the EESC opinion on e-procurement.

Administrations which have already switched to e-procurement made savings of 5-20%.  If e-procurement were to be applied to all EU procurement, savings would amount to more than EUR 100 billion.

The Commission intends to complete the gradual transition towards a full e-procurement system in 4 years. The EESC supports this ambitious goal. However, it disagrees with the maintenance of thresholds for European-type procedures. The EESC points out that maintaining thresholds would hamper the internal market and put SMEs in a disadvantaged position.

State aid modernisation

“While global competitors enjoy illegal foreign subsidies, European firms are subject to tight state aid rules that often undermine their position in European and international markets. The United States, India, Korea or Brazil often apply less transparent rules that favour national companies when competing with their European partners”, stated Emmanuelle Butaud-Stubbs (Employers’ Group, France), rapporteur of the EESC opinion on State aid modernisation.

In a highly competitive globalised economy, the European Commission should create equal conditions for EU’s main competitors. Present proposals are, however, based on obsolete WTO data which do not give a complete picture of the current situation.

The EESC believes that the European Commission proposal for an EU state aid modernisation must be re-orientated. Firstly, it warns against the risk of giving MS greater responsibility in managing state aids. It would lead to confusion and a subjective application of the rules.

Secondly, the Commission proposal should pay special attention to SMEs, which are severely affected by competitive pressures from third country firms that benefit from state aid.

Thirdly, the ceiling for de minimis aid (which is applied to each firm on the basis of a rolling period of three consecutive years) should be permanently increased from EUR 200,000 to EUR 500,000.

For more information, please contact:

Karin Füssl, Head of the Press Unit

E-mail: karin.fussl@eesc.europa.eu

Tel.: +32 2 546 8722