Brussels, 25/07/2005 (Agence Europe) - The recent proposals on regional State aid made by the competition services of the European Commission constitute "a positive step forward", states the Conference of Peripheral Maritime Regions of Europe (CPMR), which has many reasons for satisfaction. "In terms of eligibility and of the ceilings of aid alike, the CPMR notes with satisfaction considerable progress in taking peripheral regions into account" which, it feels, the previous consultation had neglected, favouring instead "the centre of Europe at the expense of the less developed territories", states a press release. Generally, under this proposal, 42% of the population of the EU will live in an eligible region, compared to 42.3% under the current regime. A security net, allowing each Member State to keep at least 50% of its population currently covered under articles 87 § 3.a and 87 §3.c combined, will increase the total cover of the population of the EU of 25 to 43.1%, and that of the EU of 27 to 46.7%. According to the CPMR, however, there are two particularly disappointing aspects in the text which has been submitted for consultation by the Member States.
Firstly, the CPMR regrets the "calculation of new aid thresholds proposed on the basis of the equivalent gross subsidy" and secondly, the fact that "the problems of island regions suffering from the statistical effect have not sufficiently been taken on board". Aid is currently expressed in equivalent net subsidy (ENS), whereas the two successive proposals by the competition services were formulated in equivalent gross subsidy (EGS), which makes comparison difficult and "may lead to sizeable differences, given that corporate rates of taxation vary in the EU of 25 between about 10% to in the region of 40%", the CPMR observes. Furthermore, although the documents sent to the Member States take account of previous requirements, the islands are not automatically eligible and the distribution key used (variations in GDP or unemployment rate at national level) are not appropriate, in the view of the CPMR. The GDP/inhabitant indicator is, in effect, not applicable to the smallest islands, which are statistically integrated into larger Continental areas which are very often more prosperous, and that of the unemployment rate is inappropriate for isolated territories, because it often hides phenomena of depopulation, the CPMR notes.
On the regions which will be eligible for the competitiveness and employment objectives as of 2007, this latest draft provides for more entities to be eligible under article 87 §3.c, depending on their GDP per head of population (which should be below Community average) or their rate of unemployment (which should be more than 115% of the national average). In this way, to the "phasing in" regions (economic development) and the territories of low demographic density (fewer than 12.5 inhabitants per square kilometre), will be added, amongst others: (a) NUTS 2 (nomenclature of territorial units for statistics) or NUTS 3 regions with more than 100,000 inhabitants; (b) NUTS 3 regions with fewer than 100,000 inhabitants; (c) Islands or other regions characterised by similar levels of isolation; (d) NUTS 3 regions which share a boarder with a country which is not part of the European Economic Area. The Member States will also be able to take account of specific problems with regional development in regions with more than 20,000 inhabitants. Moreover, regions hit by the statistical effect, which will record a GDP above the 75% of Community average due to the effects of enlargement, will be classed as less-developed regions (article 87 §3.a). The regions hit by the statistical effect will have progressive thresholds, which will be more favourable than if they had been eligible on the basis of article 87 §3.c, as was the case under the regime which was proposed last December. In 2009, however, their case will be revised, depending on their level of GDP per head of population, and the statistical effect will no longer be taken into account. If, as should be the case for the majority of them, their GDP exceeds 75% of the Community average, it will be "paid back" into the common pot for the regions eligible under article 87 § 3.c.
This latest proposal, the intensity of aid granted also changes, for the convergence regions (article 87 §3.a), depending on whether they have a GDP which is less than 45% of the Community average (from 50% of aid for large companies to 70% for small companies), between 45% in 60% of Community average (from 40% to 55% of aid), or between 60% and 75% of the average (from 30% to 50%). The phasing-out regions for the statistical effects will benefit from aid ceilings between 20% and 40%. For the regions which are eligible under article 87 §3.c, aid intensity will go from 10% to a maximum of 35% in regions which are not eligible, the ceilings remain unchanged compared to those of the previous proposal. They still authorise no aid at all to large companies, whereas small and medium-sized enterprises can be granted aid to levels of 20% and 10% respectively. The Member States have until 16 September to respond to the Commission, which is to adopt new guidelines by the end of the year.