Compatible State aid

RegAS
State Aid Registry

Aid measures that satisfy all the criteria outlined in Article 107(1) of the TFEC are, in principle, incompatible with the common market. However, the principle of incompatibility does not amount to a full-scale prohibition. Articles 107 (2) and 107 (3) of TFEC specify a number of cases in which State aid could be considered acceptable (the so-called “exemptions”). The existence of these exemptions also justifies the vetting of planned State aid measures by the Commission, as foreseen in Article 108 of TFEC.

This article provides that Member States must notify to the Commission any plan to grant State aid before putting such plan into effect. It also gives the Commission the power to decide whether the proposed aid measure qualifies for exemption or whether the “State concerned shall abolish or alter such aid”.

In exercising its powers, the Commission has developed specific approaches depending on the size of the firm, its location, the industry concerned, the purpose of the aid, etc. In order to ensure transparency, predictability and legal certainty the Commission has made public the criteria it uses when deciding whether aid measures notified to it is compatible with EU regulations in the State aid field.

These publications have taken the form of “Regulations”, “Communications”, “Notices”, “Frameworks”, “Guidelines”, and “Letters” to Member States.

We can distinguish three main aid categories under Articles 107 (3) (a) and 107 (3) (c) of TFEC:

(a) Regional aid

Articles 107 (3) (a) and 107 (3) (c) of TFEC both provide a basis for the acceptance of State aid measures aimed at tackling regional problems:

• Article 107 (3) (a) of TFEC applies to State aid to promote the development of “areas where the standard of living is abnormally low or where there is serious underemployment”.

• Article 107 (3) (c) of TFEC covers aid to other types of (national) problem regions “aid to facilitate the development of … certain economic areas”. This article gives Member States the possibility to assist regions which are disadvantaged compared to the national average. The list of regions qualifying for this exemption is also decided by the Commission, but on a proposal by Member States. Member States can use national criteria to justify their proposal.

The criteria used for the assessment of regional aid are brought together in the “Guidelines on national regional aid for 2007-2013”.

(b) Other Horizontal rules

The “horizontal” rules set out the Commission’s position on particular categories of aid which are aimed at tackling problems which may arise in any industry and region.

To date, the Commission has adopted “Frameworks”, “Guidelines” or “Block exemption regulations” setting out the criteria that are to be applied to the following categories of aid:

  • Aid for climate change and for other environmental protection;
  • Aid for research and development and innovation;
  • Aid for the rescue and restructuring of firms in difficulty;
  • Aid for small and medium-sized enterprises;
  • Aid to employment;
  • Training aid;
  • Aid for risk capital;
  • Aid for services of general economic interest.

(c) Sectoral rules

The Commission has also adopted industry-specific rules ( “sectoral” rules) defining its approach to State aid in particular industries. The most relevant in this context are the following:

• Specific sectors

Over the years, special rules have been adopted for a number of sectors featuring specific types of problems or conditions to be addressed by a specific set of rules. These currently include the sectors of audiovisual production, broadcasting, coal, electricity (stranded costs), postal services, and shipbuilding. There are also specific restrictions on granting aid to the steel and synthetic fibers industry.

• Agriculture, forestry, fisheries and aquaculture

The rules applying to these sectors are laid down primarily in the Community Guidelines for State aid in the Agriculture and Forestry Sector for 2007-2013 and in the Community Guidelines for the Examination of State Aid to Fisheries and Aquaculture.

• Transport

In the road transport sector, most general State aid rules apply (including the De minimis regulation, although there are a number of exceptions (e.g. transport equipment is in general not eligible for aid, aid for the acquisition of road freight transport vehicles is excluded from the De minimis regulation and the de minimis ceiling is decreased to EUR 100 000 for the road transport sector).

Sector-specific State aid rules apply in the other transport sectors (rail, air, inland waterways and maritime transport).

(d) Specific aid instruments

The European Commission published a number of Notices in order to offer guidance for the use of specific aid instruments (guarantees, fiscal aid and capital injections) or for the calculation of the aid’s amount.