Brussels, 07/07/2004 (Agence Europe) - On Wednesday new guidelines were set out by the Commission for saving companies in difficulty. These horizontal guidelines clarify a series of point s in the aid system for all areas except coal and steel. The 1999 guidelines will be replaced on 9 October by guidelines that "reflect an increasing focus on large enterprises that trade across the EU. .. we have introduced stricter rules on the efforts that these big beneficiaries have to make to finance their own survival. Big companies in the future should carry around 50% of the restructuring cost,” the Competition Commissioner Monti commented.
The first development compels companies that benefit from restructuring aid to contribute to the overall cost of the operation. The new guidelines quantify a minimum percentage threshold of the restructuring cost that the aid beneficiary has to carry with its own means. For large undertakings the threshold of this own contribution should be around 50% of the overall restructuring cost. For medium-sized undertakings whose activities do not distort competition within the Union in the same way, the thresholds is fixed at 40% while SMEs only have to carry around 25% of their restructuring cost. The spokesperson for competition Tilman Lueder admitted that it was difficult to assess exactly what it had been up till now but explained that with the indications in the guidelines in the Lisbon Strategy they were moving towards the future. the communication explained that self-funding should be exempt from public aid.
The new guidelines define a safeguard period for receiving state aid at 6 months at the end of which the aid should be reimbursed. Given the urgency of the case, it is also possible to receive aid through simplified procedures but the aid cannot exceed EUR 10 million. The Commission will work towards reaching a decision on the matter within a month, explained the communication.
For the two types of aid, the communication explains that any company is considered new for a period of three years during which it is not eligible for safeguard or restructuring aid. The guidelines also strengthen the “one time last time principle” which states that aid for long-term restructuring should only be granted once every ten years. The guidelines did not envisage that short-term rescue loans would be awarded during the 10-year standstill period. The new guidelines will therefore introduce a uniform period of ten years that should elapse after the award of safeguard (short term) and restructuring (long term) aid . Until then, the 1999 provisions allow for short term aid, which the Commission now wants to end. In agricultural matters the “one time last time principle” applies but is reduced to five years.