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

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nature. In these schemes the Commission allows Member States to cover all additional heritage related costs in regeneration projects by aid. To promote social integration and employment, adequate training is of utmost importance. Commission Regulation (EC) No. 68/2001 on the application of Articles 87 and 88 of the EC Treaty to training aid 28 provides for a block exemption of such aid given to undertakings. This means that training aid, both for general and specific training, which meets the conditions of the Regulation, does not need to be notified to the Commission (subject to the need to submit summary information). Similarly, Commission Regulation (EC) No. 2204/2002 on the application of Articles 87 and 88 of the EC Treaty to state aid for employment 29 provides for a block exemption for the creation of employment by small and medium-sized enterprises (SMEs), and by larger firms in an assisted area within the meaning of the regional aid map 2000-2006 (see below). This means that aid for the creation of employment, which meets the conditions of the Regulation, does not need to be notified to the Commission (subject to the need to submit summary information). A number of aid measures to promote economic activities in deprived urban areas may also be considered compatible with the common market. This is the case with aid to small and medium-sized enterprises which fulfils the conditions of Commission Regulation 70/2001 for aid to SMEs. Such aid does not have to be notified to the Commission (again subject to the need to submit summary information). Aid for initial investment carried out by larger companies may also be considered compatible with the common market, if the investment takes place in an assisted area within the meaning of the regional aid map 2000-2006, the aid respects the limits approved by the Commission for this period and complies with the provisions laid down in the Guidelines on national regional aid 30 . A number of urban regeneration schemes have been approved upon this basis. Regarding aid for SMES, the new Commission Regional aid guidelines for the period 2007-2013 31 foresee additional flexibility which will help to tackle the most pressing needs of urban and local pockets of deprivation, below the NUTS-III level, provided they have a minimum population of 20,000. Regional aid will be allowed in these areas for SMEs only 32 . In addition, the Guidelines on national regional aid 2007-2013 also introduce a new form of aid in order to provide incentives to support business start-ups and the early stage development of small enterprises in the assisted areas 33 . The Commission’s Communication on state aid and risk capital 34 sets out the criteria applied by the Commission to assess the compatibility of measures to provide risk 28 OJ L 10, 13.1.2001, p. 20-29, as amended by Commission Regulation (EC) No 363/2004 OJ L 63, 28.2.2004, p. 20. 29 OJ L 337, 13.12.2002, p. 3-14. 30 OJ C 74, 10.3.1998, p. 9-31, as modified by OJ C 285, 9.9.2000, p. 5. 31 The new Regional aid guidelines 2007-2013 were adopted by the Commission on 21 December 2005. The provisional text of these guidelines can be found at: http://www.europa.eu.int/comm/competition/state_aid/regional/rag_en.pdf The final text will be published in the Official Journal of the EU after translation into all official languages. 32 Pursuant to the new Regional aid guidelines 2007-2013, because of the potential distortion of competition resulting from the spill-over effect into the more prosperous surrounding regions, the Commission will not approve aids for investments by large companies in these areas or aids for investments with eligible expenses exceeding EUR 25 million. 33 According to the new Regional aid guidelines 2007-2013, this new form of aid should be limited to small enterprises, should be limited in amount and degressive and shall not be cumulated with other public support (including de minimis support) in order to circumvent the maximum aid intensities or amounts laid down. 34 OJ C 235, 21.8.2001, p. 3-11. 7
capital or to promote venture capital funds. Without public intervention the capital market will be particularly reluctant to invest in start-up enterprises in deprived urban areas. It will hence be possible to demonstrate market failure as set out in the Communication. Venture capital fund schemes that have the broad aim of urban regeneration 35 have been approved by the Commission. Aid exceeding the limits of the regulations, frameworks, communications and guidelines referred to above will raise doubts regarding its compatibility with the common market. Such aid must in any case be notified to the Commission pursuant to Article 88(3) EC Treaty and a full examination pursuant to Article 88(2) EC Treaty may have to take place. 4.4 Public-Private Partnerships: Regeneration measures that might or might not involve state aid In order to engage the private sector to participate in regeneration activities, Member States and the Commission recognise the importance of public-privatepartnerships (PPPs). In assessing state aid implications in PPPs, the Commission generally considers the following to be essential: – The arrangements for financing the PPP may or may not result in a transfer of state aid to one or more of the private partners. State aid could be involved if there is over-compensation of the costs of the private partners. – For all types of PPPs, private partners must be chosen in accordance with EC rules on public procurement, where these rules apply. A properly conducted tender procedure will provide reasonable assurance that private partners will be remunerated in line with market conditions. In the absence of a tender procedure, the Commission will look at the detailed arrangements of the PPP and the safeguards put in place to avoid overcompensation in order to determine if state aid is involved. – The contractual arrangements between the parties must be compatible with Community anti-trust rules (i.e. conditions in a PPP as regards the prices to be charged to consumers). 4.5 Compensation for services of general economic interest (‘SGEIs’) According to Article 16 of the EC Treaty, services of general economic interest play a significant role in promoting social and territorial cohesion within the European Union. The Community and Member States, each within their respective powers and within the scope of application of the Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions. Member States have a wide margin of discretion regarding the nature of services that could be classified as being services of general economic interest. In the absence of Community legislation governing the matter, the Commission’s task is to ensure that these provisions are applied with no manifest error. 35 Community Investment Tax Credit and Community Development Venture Fund -see Annex 1 below. 8
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DG State Aid – Control and Regeneraton of Deprived Urban ... - REVIT

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