
Vol. 1, N° 2, Summer 1994 EC COMPETITION POLICY NEWSLETTER PAGE 49
Member states and industry welcome the clarification of
policy which enhances transparency and predictability Aid
codes exist for motor vehicles, steel, shipbuilding, synthetic
fibres and coal, as well as in agriculture and fisheries.
Regional aid is controlled in accordance with detailed criteria
of long standing. Guidelines have been issued for aid to
SMEs and for environmental protection. Aid for Research
and Development is dealt with under the detailed rules laid
down in the 1986 R&D Aid Framework. This text is being
updated to take account of developments since then, the
White Paper on Growth, Competitiveness and Employment
and the new GATT rules. It is also important to improve
coherence between state aid policy on R&D and Community
funding of R&D projects.
The single market requires rigorous control of state aid in
order to prevent the reestablishment by Member States of
measures to favour or protect companies operating in their
territory. The EU's policies in favour of social, economic and
regional cohesion and its interventions through the structural
funds also need a solid check on national spending if they
are to be effective. Since this is
par excellence an area in
which the Commission has and must have exclusive
competence (it is hard to imagine Member States controlling
their own subsidies!), state aid will remain an important
Commission responsibility.
The great debate of the 1980s about the application of state
aid rules to the public sector has died down. It is now widely
accepted that the rules apply without discrimination to public
and private sector alike and that states grant state aid when
they provide capital to companies they own on terms or in
circumstances in which a private investor would not have
done so are granting state aid.
The Commission has set about clarifying the state aid rules
in a series of explanatory guidelines. In some specific areas
there are binding rules with which the Member States must
comply. Among the challenges before us are:
- The drafting of guidelines on employment aid schemes by
which the Member States encourage employment. These
guidelines are wanted by the Member States, since they
need clarification of our policies regarding schemes which
they have introduced or plan to introduce. It is important
to distinguish between measures which fall under the state
aid rules and those which do not. If general measures are
adopted throughout a state's territory to give financial
assistance to all companies taking on certain types of
worker, the state aid rules do not apply. If, on the other
hand, the assistance targets certain companies or
categories of company, state aid will be involved since
those companies will receive a competitive advantage
over those which are not aided. We wish to encourage
Member States wishing to target their employment aid to
concentrate on the categories of unemployed proving most
difficult to insert or reinsert on the labour market and to
provide assistance for training. This work is under way
with DG V and is a priority matter.
- The procedures applied by the Commission in state aid
cases are complex and have important consequences for
Governments and companies. They are laid down in a
bewildering variety of Court judgments and Commission
statements. We propose to bring them together in a Guide
to Procedures which it is hoped to publish in 1994. There
will no doubt be regular developments necessitating
updates. The Commission's internal procedures for state
aid cases also require attention and some decentralisation
is necessary if we are to meet the challenges of the
coming years.
- Work is under way on a set of rules for the analysis of
aid for capital-intensive investments. National aid
programmes tending to favour capital over labour are
being re-examined and our analytical tools require
adjustment too. It may be possible to adopt a general
horizontal method of analysis in place of the complex
rules which exist at present in the automobile and
synthetic fibres industries.
- In general, the strict enforcement of state aid disciplines
in the EC must be maintained and stepped up where
necessary. It is still the case that more aid is granted in
the richer central regions of the Community than in the
poorer peripheral areas. This runs counter to our cohesion
policy and undermines the structural fund interventions.
State aid control is also necessary to prevent bidding
"wars" between regions and states for mobile investment.
- Other priority areas include the implementation of the
GATT Uruguay Round on subsidies and the ongoing work
in the new WTO in this area. State aid discipline must be
extended to Eastern and Central Europe and the
Commission must remain active in international
organisations dealing with this issue.
- Finally, the new member states joining the EU must
respect fully the state aid disciplines set out in the
Treaties. It is essential that industry and the general public
maintain their confidence in the Commission as a fair
and impartial enforcer of the competition rules which
enable companies to thrive on the basis of their own
independent efforts. The Commission will therefore have
to devote considerable effort to bringing the new member
states into line with all the state aid rules.
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