
PAGE 52 EC COMPETITION POLICY NEWSLETTER Vol. 1, N° 2, Summer 1994
leads to an increase in the production capacity, will normally
not be authorized by the Commission. However, in
exceptional cases, such as the investment aid to the Hualon
Corporation in Northern Ireland, where the aid is granted
under an authorized regional aid scheme and contributes
significantly to the economic development of very
disadvantaged region of the Community, these regional
benefits may be weighed off with the potential negative
effects on overall production capacity and competition in the
sector and lead the Commission to authorize the aid.
Horizontal aid schemes
Research & development. The Commission continues on the
basis of the framework for state aid to research &
development to adopt a favourable approach to state aid in
this field, which is confirmed by a number of positive
decisions on R&D schemes in Germany, France, the
Netherlands and Luxembourg. Sometimes these schemes
involve considerable amounts of aid, like the R&D aid to the
French company S.G.S.-Thomson Microelectronics of 321
million ECU over a three-year period approved in July, but
are authorized in view of the important contribution they
make to the development of European industry.
The Commission considered that a Dutch scheme under
which companies are exempted from paying the income tax
for its employees does not constitute an operating aid for
these companies as the tax exemption is linked to the
carrying out of concrete research & development projects.
The scheme was therefore examined under the R&D
Framework and approved.
Small
and medium-sized enterprises. The Commission
recognizes the importance of SMEs in the economy, in
particular in the field of job creation and innovation, and the
particular problems these firms are faced with, in particular
in raising capital. The Commission therefore continues to
take a favourable approach to different kinds of aid to
promote the development of SMEs by improving the
financial facilities available to them. This policy was once
again confirmed by the Commission's decision in May to
authorize a Danish guarantee scheme for venture capital
companies providing equity capital to innovative SMEs.
Under the SME Aid Guidelines aid for investment is limited
to a fixed percentage of fixed assets. If aid granted in
connection with the setting-up of a SME also covers first
stocks, it may be authorized if its intensity does not exceed
this fixed percentage. The German scheme offering equity
loans to SMEs ("Eigenkapitalhilfe-Programm") met that
condition.
The Commission believes that further effort must be put into
training, consultancy and other business support services
meeting "one-off" requirements for up-to-date knowledge in
firms, in particular SMEs. The Commission therefore has a
positive view on state aid to SMEs for these activities,
commonly termed "soft aid", and under the SME Aid
Guidelines allows Member States to grant aid covering up to
50% of the eligible costs for such activities. The
Commission authorized an Italian SME aid scheme, which
among other things offers aid of up to 50% for external
consultancy services for innovation.
Aid
for the protection of the environment. The Commission
has since 1 January 1994 applied the new Community
Guidelines on State aid for environmental protection for the
assessment of state aid in the field of environment, energy
conservation measures and renewable energy. The
Commission has during this period examined a considerable
number of environmental aid schemes nearly all of which
were in line with the new Guidelines and, thus, approved.
Under the new Guidelines the eligible costs for investment
aid must be strictly confined to the extra investment costs
necessary to meet environmental objectives. General
investment costs not attributable to environmental protection
must be excluded. Therefore the Commission decided to
open the Article 93(2) procedure concerning an
environmental aid to the Italian paper manufacturer "Cartiere
del Garda", as part of the proposed aid was to cover
replacement costs and another part of the aid seemed simply
to reduce the firm's operating costs.
The new Guidelines do not cover state aid for the relocation
of firms for environmental reasons. Each aid proposal for the
relocation of firms under an Italian environmental aid
scheme for the Province of Trento will therefore be notified
individually.
The Commission does not normally approve operating aid
which relieves firms of costs related to the pollution they
cause. However, under the Guidelines the Commission may
in exceptional cases and under certain conditions make an
exception to this principle, in particular in the field of relief
from environmental taxes. On the basis of this exception the
Commission authorized a Danish aid scheme offering a
temporary grant to combined district heating and power
plants to compensate for an increase in the energy and
environmental tax on the consumption of coal with a view
to promote the use of district heating instead of individual
heating in certain regions.
Rescue
and restructuring aid. The Commission approved
Guidelines which codify its policy towards state aid to
rescuing firms in difficulty and helping them to restructure.
Detailed account of these will be included in the next issue
of the Newsletter.
The positive decision of the Commission towards social aid
given in the context of the restructuring of Kimberly Clark
in Sotteville-les-Rouen already illustrates the favourable
treatment reserved for that type of aid.
C. Procedures
If the Commission finds that aid illegally granted to an
enterprise is also incompatible with the common market, it
will ask the Member State concerned to recover the aid from
the beneficiary. The Commission may at a later stage
authorize additional compatible state aid to the same
company(ies), but will require the Member State concerned
to suspend the payment of this aid, or at least an amount
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