The European Commission's Programme for State Aid Modernization
| Published date | 01 March 2013 |
| Date | 01 March 2013 |
| DOI | http://doi.org/10.1177/1023263X1302000103 |
| Subject Matter | Article |
20 MJ 1 (2013) 35
THE EUROPEAN COMMISSION’S PROGRAMME
FOR STATE AID MODERNIZATION
C Q Q.C.*1
ABSTRACT
e European Commission has set out a modernization programme for state aid. is
a ects both substantive state aid law and administrative procedures. On substance, while
the Commission has no power to change the meaning of state aid, which is derived from
Article107 TFEU and is a matter of law ultimately for the CJEU, it intends to issue a
det aile d Noti ce on the n otio n of ai d, i n par ticu lar i n rel ation to scal aid and ap plication of
the market investor principle . More proactively, the Commission is revamping the system
of assessment and exemption , with a plan to reform the general block exemption and the
various guidelines on, for example, environmental protection, research and development
and innovation, risk capital and restr ucturing aid. A more analytical approach, weighing
up the economic e ects, will be carried out in assessing compatibility. On the procedural
side, the main reform is intended to lessen the Commission’s administrative workload
by reducing the number of complaints that require a Commission decision. Whereas, at
present, all complaints must be acted on, regardless of the interest of the complainant, it
is intended that henceforth complainants would have to show that they were interested
parties within the meaning of the Procedural Regulation. Complaints from other persons
would merely be treated as information tools. e Commission also is seeking to int roduce
new powers for gathering market infor mation from sector participants.
Keywords: competition law; moder nization programme; reform; state aid
§1. THE NEED FOR EU STATE AID MODERNIZATION
Despite falling to new low levels in 2011, state aid remains a signi cant feature in the
EU economy. e system of state aid control set out in A rticles107–109 TFEU, whereby
* Conor Quigley Q.C. is a b arrister special izing in EU law at Serle Court, L incoln’s Inn, London, and a
Research Fellow at t he Institute of Europea n and Comparative Law, Universit y of Oxford.
Conor Quigley Q.C.
36 20 MJ 1 (2013)
the European Commission must be noti ed of all aid measures that each Member State
intends to put into e ect and which prohibits aid that has not been authorized by the
Commission, has been relatively e ective over the years in limiting the total amounts
of aid, and in ensuring that permitted aid is, as far as possible, necessary for economic
development.
According to the Commission’s Autumn 2012 State Aid Scoreboard,1 the total
expenditure on state aid (other than aid associated with the nancial crisis) in 2011
amounted to €64.3 billion, or 0.5% of EU GDP. is represented a decrease when
compared to previous years and re ected an overall t rend of lower state aid expenditu re
over the period 2006–2011. Non-crisis state aid expenditure has been on a long-term
downwa rd trend sinc e the 1980s , when it stoo d at approxim ately 2% of EU GDP. It fel l to
about 1% of EU GDP in the 1990s and decreased fu rther to around 0.5% of EU GDP a er
2004, except in 2006. A moderate increase was seen in 2008 and 2009, but in 2010 and
2011 the gure wa s again around 0.5% of EU GDP.
Generally speaking, Member States have continued their e orts to reduce overall
aid levels, although the Commission suspects that a substantial part of the decrease
has probably been due to tougher budget conditions in many Member States. EU GDP
showed very moderate growth below 1% in 2011, overall private and public spending was
still low, and unemployment in the EU was ab ove 10%, with the intensif ying sovereign-
debt crisis also weighing heavily on the EU economy. While it remains to be seen in the
coming years whether the downward trend of state aid expenditure continues or levels
out in the long-term, Member States appear to have maintai ned their state aid discipline
despite the fact that many Member States granted substantial crisis aid amounts to the
nancial sector.2
As in previous years, the three main non-crisis objectives in 2011 for which Member
States granted aid were: regional development, safeguarding the environment including
fostering energy saving and promoting the use of renewable energies, and research,
development and innovation (R&D&I). Aid to small and medium-sized enterprises
(SMEs) and aid for creating employment and promoting training were less used by
Member States. Out of a total of €52.9 billion, or 0.42% of EU GDP, granted to industry
and services, 89.7% of the aid was earmarked for these ‘horizontal’ objectives. Regional
aid amounted to €14 billion, or 0.11% of EU GDP, followed by environmental protection,
including energy sav ing, which stood at €12.4 billion, representing 0.09% of EU GDP, and
R&D&I aid, which amou nted to €10 billion, or 0.08% of EU GDP. ose three objectives
accounted for approximately two-thirds of total aid to industry and services. e trend,
with horizontal aid increasing by approximately 0.2% of EU GDP between the periods
2006–2008, a nd 2009–2011, shows that Member States have evidently been ma king e orts
1 Report from th e Commission on the State a id Scoreboard 2012 Update: Repor t on State aid granted by
the EU Member States , COM (2012) 778 nal.
2 On State aid to the nancial sector, see C ommission Sta Working Paper: e e ects of tempora ry State
aid rules adopte d in the context of the nancial and economic cri sis, SEC (2011) 1126.
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