Commission proposes simpler state aid rules

The European Commission yesterday presented a revised version of changes to its state aid rules in order to simplify the current system.

The proposed rules will make it possible to exempt small subsidies given by member states to help particular economic sectors from the notification obligation under the EC treaty.

The proposals take account of comments made during public consultation on initial proposals presented last March and state that subsidies of €200,000 or less will not constitute state aid.

This exemption is limited to measures for which the inherent state aid amount can be calculated in advance. Guarantees will also be covered under the revised proposal, to the extent that the amount of the underlying loan does not exceed €1.7 million.

These draft proposals will now be sent to all the EU member states for a second consultation, in order to allow them to make further comments.

The Commission said that it intends to adopt and publish the final version of the new rules by the end of the year so that they will enter into force as from next January.

According to EU rules, known as the 'de minimis aid' the current threshold for state aid without the need of notification stands at €100,000 over a period of three years. The Commission said that the increase in its threshold takes into account economic developments since the ceiling was last increased.

Competition Commissioner Nellie Kroes said that the Commission has listened carefully to the member states' and stakeholders' views and has now proposed creating a safe harbour tailor-made for guarantee schemes for small and medium sized enterprises.

"This should allow member states to boost the competitiveness of such companies without adversely affecting competition. However, in order to avoid abuses, non-transparent forms of aid must remain excluded from the regulation," she said.