Brussels, 04/02/2005 (Agence Europe) - The reform of EU state aid rules, launched by the then Competition Commissioner Mario Monti in 2003, has entered a more formal consultation phase between the European Commission and Member States. On Tuesday and Wednesday of this week, the atmosphere at the first consultation meeting of experts on regional state aid rules was described by the Commission as 'cooperative'. The consultations will first look at the written replies by Member States to the Commission's document (until the end of February), followed by a second multilateral meeting in June 2005. As the new Competition Commissioner Neelie Kroes told the European Parliament, reforming the state aid system will be one of her major concerns throughout her term of office.
The consultation meeting this week revealed that most Member States support the Commission's idea of cutting the overall level of regional state aid, although some Member States, like Spain, Portugal and Greece, want to keep things exactly as they are. Italy 'more or less' supports the Commission's guidelines but is concerned about the future of its less developed regions. The most solid support at this stage comes from the Netherlands and Scandinavia, which appear to accept the state aid levels suggested for the different categories of region. Ireland, however, wants greater flexibility, and the four Member States that have called for a cut in the aid differential between EU regions and for public aid fro big business to be able to continue even outside specially aided regions (France, Germany, Austria and the UK) are sticking to their guns (see EUROPE of 2 February, p.9).
The reform of the EU state aid system is part of a broader modernisation package revising a series of other EU legislation. For research and development and risk capital, for example (where a separate consultation process has been launched), this will be carried out through the publication of new guidelines at the end of the year. The Commission will adopt a single regulation covering exemptions in the existing categories. The various packages should come into force after 2006 and include a re-assessment of the threshold for 'de minimis' state aid (currently set at EUR 100,000), and a further review of the regulation governing procedures for aid in all sectors.
Speaking to the European Parliament's Economic and Monetary Affairs Committee on Thursday, Commissioner Neelie Kroes outlined the work programme she set out during the hearing to confirm her appointment. The programme includes reforming the state aid rules, efficient implementation of updated legislation, and encouraging competition (see EUROPE of 29 September, p.5). On encouraging competition, Kroes said she was planning to closely monitor recently liberalised industries (like energy, transport, post and telecommunications) and was preparing controls in a limited number of key sectors where competition does not operate as well as it should. Her spokesperson commented later that the exact scope and timing of these controls had not yet been decided.
On reforming the EU's general state aid system, Neelie Kroes said it was unacceptable for companies to try and generate and preserve growth and employment only to find themselves confronted with competitors benefiting from the artificial advantage of state aid. On regional aid, she repeated the line she had outlined to reporters earlier (see EUROPE of 27 January, p.13), stressing the need for aid to go to the regions of countries that need it the most.