VADEMECUM COMMUNITY RULES ON STATE AID - Interact

1. INTRODUCTION
The European Commission has launched in June 2005 a comprehensive reform of state aid
rules and procedures under the title of State Aid Action Plan 1 (hereinafter only the “Plan”).
The Commission announced that it would aim in particular to ensure that EC Treaty’s state
aid rules are better suited to encourage Member States to contribute to the Lisbon Strategy by
focussing aid on improving the competitiveness of EU industry and creating sustainable jobs
(for example aid for R & D, innovation and risk capital for small firms), on ensuring social
and regional cohesion and improving public services. Since the adoption of the Plan, a
number of new regulatory texts have been adopted (such as the new regional aid guidelines)
and others are currently under revision. The process should largely be completed by 2009.
The Commission encourages Member States and regions to prioritize action to strengthen the
competitiveness of the regional economy. Measures providing State aid to individual
companies obviously play an important part in this respect. However, such measures also
distort competition as they discriminate between companies that receive assistance and others
that do not. As such, they could present a threat to the operation of the internal market.
The authors of the Treaty establishing the European Community (hereinafter only the
“Treaty”) had recognized this risk. Still, they did not impose a total ban on State aid. Instead,
they set up a system which while it is centered on the principle that State aid is incompatible
with the common market, nevertheless accepts that the granting of such aid can be justified in
exceptional circumstances.
The basic rules of the system are outlined in Articles 87-88 of the Treaty. These rules have
been amplified over the years by secondary legislation and court rulings.
This Vademecum intends to provide a concise overview of the basic EU rules regarding State
aid. It does not aim to provide an exhaustive description of these rules. Instead, it focuses on
the issues that are most relevant for people involved in Structural Fund programmes.
The Vademecum considers the following subjects:
• Types of measures that are covered by EU State aid rules;
• State aid measures that are acceptable under European legislation;
• Notification and authorisation procedures;
• State aid in Structural Fund programmes;
• Fact-sheets on State aid issues that are most relevant for the Structural Funds.
1 SEC(2005) 795- COM(2005) 107 final.
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