Commission Simplifies Rules for Aid Combined with EU Support and Introduces New Possibilities



The European Commission adopted on 23 July 2021 an extension of the scope of the General Block Exemption Regulation (GBER), which will allow Member States to implement certain aid measures without prior Commission scrutiny. The revised rules concern: (i) aid granted by national authorities for projects funded via certain EU centrally managed programmes under the new Multiannual Financial Framework; and (ii) certain State aid measures that to support the green and digital transition and are, at the same time, relevant for the recovery from the economic effects of the coronavirus pandemic.


Exempting such aid from prior notification is a major simplification, which facilitates a quick implementation of such measures by Member States, where conditions limiting the distortion of competition in the Single Market are met.


Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “ Today, the Commission is streamlining the State aid rules applicable to national funding that fall under the scope of certain EU programmes. This will improve further the interplay between EU funding rules and EU State aid rules under the new Multiannual Financial Framework. We are also introducing more possibilities for Member States to provide State aid to support the twin transition to a green and digital economy without the need of a prior notification procedure, while at the same time not causing undue distortions of competition in the Single Market. The new rules will also make it easier for Member States to quickly provide much needed funding in support of a sustainable and resilient recovery from the economic effects of the coronavirus pandemic."


With the aim of improving the interplay between EU funding rules and EU State aid rules under the new Multiannual Financial Framework, the Commission streamlines the State aid rules applicable to national funding of projects or financial products, which fall under the scope of certain recently adopted EU programmes. With the amendments introduced today to the GBER, the rules on EU funding and State aid rules applicable to these types of funding have been aligned to avoid unnecessary complexities, while at the same time preserving competition in the EU Single market.


The concerned national funds are those relating to:

  1. Financing and investment operations supported by the InvestEU Fund;

  2. Research, Development and Innovation (RD&I) projects having received a “Seal of Excellence” under Horizon 2020 or Horizon Europe, as well as co-funded research and development projects or Teaming actions under Horizon 2020 or Horizon Europe;

  3. European Territorial Cooperation (ETC) projects, also known as Interreg.


The European Commission is in charge of ensuring that State aid granted by Member States complies with EU rules. At the heart of this responsibility lies the notification procedure, under which Member States have to notify any planned aid measures to the Commission before putting them into effect. ECOPNET (European Cooperation and Partnership Network) reiterates that with the amendment of the GBER, the Commission creates further possibilities for Member States to provide aid needed for the twin transition in a way that will also allow them to rapidly support companies in need for funding to combat the economic effects of the coronavirus pandemic.


Background


Article 108(3) of the Treaty on the Functioning of the European Union (TFEU) requires Member States to notify all State aid to the European Commission and to implement it only after the Commission's approval. The EU State aid Enabling Regulation allows the Commission to declare that certain categories of State aid are compatible with the Single Market and exempted from the notification obligation provided for in the Treaty.


The GBER declares specific categories of State aid compatible with the Treaty, provided that they fulfil clear conditions, and exempts these categories from the requirement of prior notification to and approval from the Commission. This allows Member States to implement such measures directly, with full legal certainty. The 2014 General Block Exemption Regulation enabled Member States to implement a wide range of State aid measures without prior Commission approval, as they are unlikely to distort competition. As a result, since 2015, more than 96% of new State aid measures for which expenditure was reported for the first time did not require notification to the Commission. This is in line with the Commission's approach to focus on delivering more and faster, while focusing less where the added value is perceived to be more limited.




Source: European Commission Press Corner