STATE AID : REGIONAL AID: MEPS WANT TO REVIEW TEXT
18/04/13
Europolitics

The European Commission must review its proposal for a revision of its guidelines on regional state aid. This was the essence of the message MEPs sent to Competition Commissioner Joaquin Almunia during the European Parliament's plenary session, on 16 April. Almunia noted their concerns and said he was willing to be more flexible. He also announced that the text could enter into force before the end of this year.

The head of the European Parliament's Committee on Regional Development (REGI), Danuta Hübner (EPP, Poland), sparked the debate and “opened fire” by saying that it was “neither politically, economically or socially opportune” to be considering taking a harder line on granting aid aimed at compensating for the disparities between European regions. Hübner feels, along with many other REGI committee members who took the floor in the debate, that “these restrictions are likely to have detrimental side effects”. Almunia answered that he had upheld – contrary to his initial position – the current level of the population covered by the aid, which is 45%. Almunia also said the decreasing aid intensity was a corollary of shrinking regional disparities. He stressed that aid should compensate for the divergences between budget capacities.

“By keeping the same aid intensity we risk increasing these divergences, rather than helping these regions,” he said.

AID FOR BIG COMPANIES

The first of MEPs' concerns was the ban on aid to big companies in so-called C zones, where the GDP per inhabitant ranges between 75% and 90% of the EU average. MEPs felt that this was not in keeping with the aims of cohesion policy. Lambert van Nisterooij (EPP, Netherlands) feels that this creates a conflict of interests since “it contravenes incentives for big companies to settle in these intermediate regions creating economic dynamism; there is a mismatch with the beneficiary regions”.

The commissioner feels that these two policies have different aims and it is normal that there should be differences when drawing up the maps of eligible zones. He noted, however, that he aimed to “open the door for aid to big companies in C zone regions, under very strict conditions […] as soon as it has been demonstrated that aid would create real incentives for growth and employment”. Almunia also considered the possibility of making it mandatory for big companies to respect social and environmental criteria.

The Greens welcomed the ban on aid to big companies in these areas but also asked for those companies that continued to receive aid to be forced to keep their activity in the region they received aid from for at least ten years (instead of five years in the proposal) – failing which they would have to pay back the aid received. This is to avoid relocation, which would make it possible for companies to then benefit from subsidies in other regions. “This aid should promote job creation, not job destruction,” said French MEP Karima Delli.

Younous Omajee (GUE-NGL, France) and Pat Gallagher (ALDE, Ireland) highlighted treatment of the outermost regions, which would be less advantageous in the new proposal. “This runs counter to the Commission's promises,” said Nuno Teixeira (EPP, Portugal). Almunia replied that, on the contrary, the situation of the outermost regions would be improved.

The question of disparities between cross-border areas is also a source of concern to MEPs, some of whom would like to see a cap of a 15% difference in aid levels. The commissioner pointed out that his proposal contained this ceiling and that it was for member states to include these regions in their national mapping as aid beneficiaries.

Oldrich Vlasak (ECR, Czech Republic) will draft an own-initiative report on this type of aid, which will be put to the vote in REGI in late May. The Committee of the Regions and the Economic and Social Committee have put out very critical opinions on the Commission's approach (see Europolitics 4577, 4578 and 4616).