DG State Aid – Control and Regeneraton of Deprived Urban ... - REVIT

integration, will also normally not favour certain undertakings or the production of
certain goods and will hence not fall under Article 87(1) EC Treaty 13 .
Finally, even measures designed to promote economic activities in deprived urban
areas need not constitute state aid in the meaning of Article 87(1) EC Treaty. In line
with the former Guidelines on state aid for undertakings in deprived urban areas, aid
to individual shops and enterprises in such areas that carry on a purely local activity
will normally 14 not affect trade between Member States. Further, where the activity of
the beneficiaries is the subject of intra-Community trade, and therefore competition
with other enterprises might be distorted by state aid, aid up to a maximum of EUR
100,000 over a three-year period may nevertheless be granted without prior
Commission approval (the ‘de minimis’ rule). The de minimis rule is set out in
Commission Regulation (EC) N° 69/2001 on the application of Articles 87 and 88 of
the EC Treaty to de minimis aid 15 . If all the conditions on the application of the de
minims rule specified in the above-mentioned Regulation are met, such aid does not
fulfil the requirements in terms of effects on competition and trade and hence does
not fall under Article 87(1) EC Treaty 16 .
4.3 Regeneration measures which involve compatible state aid
Exemption regulations, guidelines and frameworks lay down the policy the
Commission has adopted regarding various types of aid. Many of these will be
relevant for a holistic regeneration strategy that integrates and reconciliates diverse
sectoral policies.
The Commission’s notice on the expiry of the guidelines on state aid for undertakings
in deprived urban areas 17 emphasises that the non-prolongation of the guidelines
does not imply that state aid for deprived urban areas is no longer possible. Such aid
may be found compatible under the existing rules applicable to state aid, or,
depending on the circumstances, directly under Article 87(3)(c) of the EC Treaty.
Article 87(3)(c) states that aid to facilitate the development of certain economic
activities or of certain economic areas can be considered to be compatible with the
common market, provided that such aid does not adversely affect trading
conditions to an extent contrary to the common interest. When examining whether
aid is compatible directly under Article 87(3)(c) the Commission, firstly, will take into
account the Community’s objectives (which may also include regeneration of
deprived urban areas) and, secondly, will analyse whether the proposed aid
measure is appropriate and proportionate to its targeted objectives and does not
have disproportionate effects on competition and trade. In other words, the
compatibility of state aid depends on balancing its negative effects with its positive
effects. In this regard it is up to the Member State to demonstrate the existence of
clearly defined market failures 18 or of the situations when markets do not lead to
13 Commission Regulation (EC) No. 2204/2002 on the application of Articles 87 and 88 of the EC Treaty to state
aid for employment, OJ L 337, 13.12.2002, p. 3-14, recital 6.
14 The exception would be an enterprise located sufficiently close to the border that clients might be tempted to
cross the border for their purchases or for the services provided.
15 OJ L 10, 13.1.2001, p. 30-32.
16
Note that this Regulation is not applicable to the transport sector or activities linked to the production,
processing or marketing of products listed in Annex I to the EC Treaty. For the latter sector Commission
Regulation (EC) No. 1860/2004 of 6 October 2004 on the application of Articles 87 and 88 of the EC treaty to
"de minimis" aid in the agricultural and fisheries sectors (OJ L 325 of 28.10.2004) applies.
17 OJ C 119, 22.5.2002, p. 21.
18 For example, market failures in land and property development, enterprise development, etc.
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