Brussels, 12/12/2006 (Agence Europe) - According to the latest scoreboard compiled by the European Commission, the total amount of state aid granted by the 25 EU Member States in 2005 came to an estimated €64 billion (0.59 of EU GDP), compared with €65 billion (0.61% of GDP) in 2004. EU-wide, the response to the Council's call for a reduction in state aid has been moderate. However, Member States have reacted positively to the second Council objective of “better targeted aid”, says the Commission: more than half of Member States have now re-directed over 90% of their state aid towards horizontal objectives of common interest, such as the environment and R&D. In-depth analysis of rescue and restructuring aid shows that this type of aid, which is the one most likely to distort competition, amounted to €15.5 billion in the EU15 Member States over the period 2000-2005. While some Member States have frequently awarded this type of aid during the period under review, the majority have clearly not done so. More than 95% of the total aid amount was granted by the five largest Member States (Germany, France, Italy, the United Kingdom and Spain). On Monday, Competition Commissioner Neelie Kroes welcomed the fact that “aid is more focussed on horizontal objectives”, but she was disappointed that “the overall level of aid has hardly changed”. “I remain, moreover, committed to ensuring a level playing field through a strict application of the Rescue and Restructuring Guidelines and to tackling illegal aid with all available means,” she warned.
In absolute terms, Germany granted most aid (€20 billion), followed by France (€10 billion), Italy (€6 billion), the United Kingdom (€5 billion) and Spain (€4 billion). In relative terms, the five biggest aid granters were Malta (3.16% of GDP), Hungary (1.83%), Finland (1.75%), Cyprus (1.43%) and Sweden (1.08%). There is a clear move towards “better targeted aid”, the Commission says, with more than half of Member States awarding more than 90% of their aid to horizontal objectives. Significant progress has also been made by EU10 Member States. The increase in horizontal aid can in part by attributed to a reduction in aid to the coal sector, combined with an increase in tax exemptions for the environment and energy saving, the Commission says.
Expenditure on ad hoc rescue and restructuring in the EU15 amounted to €15.5 billion over the period 2000-2005. Five Member States accounted for over 95% of this figure: Germany, France, Spain, the United Kingdom and Italy. Belgium and Greece also spent relatively high amounts. The Netherlands, Austria and Portugal awarded relatively small amounts of this kind of aid, and five Member States - Denmark, Ireland, Luxemburg, Finland and Sweden - did not grant any aid of this type at all. The overall volume of rescue and restructuring aid tended to be driven by a limited number of cases such as Bankgesellschaft AG in Germany, Alstom and Bull in France, British Energy in the United Kingdom, Alitalia in Italy and the Spanish shipyards.
More than half of the ad hoc rescue and restructuring decisions taken over the period 2000-2005 related to new aid put into effect before approval by the Commission. Such aid is illegal, and granting it constitutes a breach of EC Treaty state aid rules. Illegal aid occurs particularly in the largest cases in the larger Member States and is more prevalent in restructuring cases than in rescue. The latest scoreboard is available on http: //ec.europa/comm/competition/state_aid/studies_reports/studies_reports.html (ol)