Brussels, 27/03/2006 (Agence Europe) - On 27 March, the Commission adopted the last version of the scoreboard on State aid 2002-2004, which examines the situation in future Member States, candidate countries for EU membership and potential candidate countries. In the EU in general, the situation has hardly moved forward since results were given for 2004 in the previous version of the report published in December 2005 (EUROPE 9086). Although aid is increasingly earmarked for across-the-board objectives, the trend in recent years has still been upward. On the other hand, Bulgaria and Romania have made true progress towards a market economy and towards achieving credible results for application of State aid, Neelie Kroes said in a press release, adding, however, that further effort was needed to ensure that aid is used as effectively as possible. The Commissioner for competition especially welcomed the considerable effort made by the national competition authorities to ensure that transparency obligations are upheld, a major commitment to which Bulgaria and Romania signed up during accession talks. In its report on the preparedness of the two countries to join the EU, published in October 2005, the Commission had above all invited Romania to step up its efforts in the competition policy field, especially for State aid (EUROPE 9056). We recall that the final Commission report on these two countries is expected in May. For the countries that appear to be the furthest away from accession, results on progress made at legislative and political level is very mixed.
Between 2002 and 2004, comparison with the average of EU States is very flattering for Bulgaria. Sofia records a State aid ratio of GDP 0.39% as opposed to 0.49% for the EU25 and 1.35% in the ten countries that were part of the last enlargement. The level reached in Romania is, on the other hand, far higher, with State aid amounting to 1.86% of GDP, but the Commission sees this as largely due to reforms with a view to reaching a market economy, as well as to privatisation and to the restructuring of businesses in difficulty. In absolute value, Bulgaria allocated €65 million in aid over the same period and Romania 981 million.
The breakdown of aid by sector shows, however, that a relatively high share of aid has a potentially very marked distortionary effect, such as sectoral aid (in particular aid to the rescue and restructuring of business), the report notes. According to the Commission, 87% of aid granted in Romania and 55% of aid in Bulgaria present competition risks. In sectoral terms, 25% of Bulgarian aid was granted to companies in the manufacturing sector and 25% to companies dealing in heating, for example, or to the mining industry. The latter receives the most public funding in Romania also (with 21% of total aid), followed by steel (14%) and the coal industry (11%). In the EU25, 24% of aid had been paid during the period in question to specific sectors.
For the other candidate countries, and for those that are potential candidates, the situation is more diverse, especially in terms of progress made on reforms. Although Croatia and the Former Yugoslav Republic of Macedonia (FYROM) have adopted national legislation on State aid and set up authorities responsible for monitoring aid, Turkey has done neither, with its existing control authority not operating independently, the report recalls. In the same way, Serbia and Montenegro and Albania have established control structures (although they could still not be considered independent) but for now there is no authority responsible for monitoring aid in Bosnia-Herzegovina.
The scoreboard on State aid, which does not include subsidies for agriculture, fisheries and transport, is available on the Commission's website: http://www.europa.eu.int/comm/competition/state_aid/scoreboard/index_en.html