10 STATE AID
(26170)
15279/04
COM(04) 750
| Commission Report: State Aid Scoreboard — Autumn 2004 update
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| Legal base | —
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| Document originated | 16 November 2004
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| Deposited in Parliament |
30 November 2004 |
| Department | Trade and Industry
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| Basis of consideration |
EM of 31 December 2004 |
| Previous Committee Report |
None; but see (25591) 8922/04: HC 42-xxii (2003-04), para 21 (9 June 2004)
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| To be discussed in Council
| Not known |
| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
10.1 The Commission reports twice-yearly on state aid and state
aid issues. The last report ("scoreboard") gave an
overview of the state aid situation in the then fifteen Member
States and examined the extent to which Member States are reducing
their state aid relative to Gross Domestic Product (GDP), the
relative success of Member States in redirecting aid from specific
sectors to horizontal objectives (with special attention to state
aid for employment creation and promotion of training in order
to fulfil the Lisbon Strategy), and state aid control procedures,
recovery, ongoing work to modernise state aid control and preparing
for enlargement. This final section contained only a brief summary
of the performance of the then Accession States.[37]
The document
10.2 This scoreboard is the Autumn update and its main aim is
to provide an overview of the state aid situation in the ten new
Member States over a four-year period prior to accession. It gives
an insight into the overall state aid situation in each of the
new Member States at accession. The scoreboard is in three parts.
The first part:
- sets the economic context, including the transition from state-planned
to market-oriented economies of eight of the new Member States;
- discusses the enlargement process, including
assessment of aid measures carried out initially by the national
monitoring authorities and then by the Commission in the context
of approving existing aid measures for the post-accession period;
- attempts to compare the new Member States with
one another and with the average of the EU15 Member States. It
looks at the overall level of aid, the sectors to which aid is
directed and the use of various aid instruments; and
- annexes a country-specific profile outlining
the state aid situation for each new Member State.
10.3 The second part considers action by both the
Commission and Member States to follow up various Council conclusions
on state aid reached at different times since the adoption of
the Lisbon Strategy in 2000. The third part of the scoreboard
summarises ongoing work to modernise state aid control, including
efforts to support aid for innovation.
10.4 The scoreboard shows that total state aid granted
by the new Member States during the four-year period prior to
accession was estimated at an average of €5.7 billion a year
— the comparable EU15 figure in 2002 was €34 billion.
The level of state aid increased each year from €4 billion
in 2000 to €7.8 billion in 2003. For the new Members States
as a whole state aid amounted to 1.42% of GDP over the period
2000-2003. This is significantly higher than the EU15 average
of 0.4% in 2002. But if measures in the process of being phased
out are excluded, the average drops to 0.67%.
10.5 For the new Member States the scoreboard indicates
that, prior to accession, aid granted for horizontal (rather than
sectoral) objectives accounted for around 22% of total aid, a
low share in comparison with 73% in the EU15 Member States in
2002. For the EU15 the scoreboard reports that Member States are
responding positively to calls for less and better aid through
explicit policy efforts. Belgium, Denmark, Sweden and the United
Kingdom are cited as having placed greater emphasis on improving
the general business environment, streamlining and rationalising
business support schemes and directing support away from state
aid towards general measures.
10.6 The scoreboard re-emphasises the Commission's
commitment to refocus state aid policy so as to eliminate the
most distortive aid whilst allowing Member States more scope to
support the Lisbon Strategy objectives. The Commission says the
large number of existing legislative acts and guidelines due for
renewal during 2005-2006, together with the beginning of a new
programming period for Structural Funds in 2007, gives a window
of opportunity for a comprehensive review of the horizontal state
aid rules, particularly in the light of Lisbon Strategy objectives
and of any new cohesion policy, and for consolidation and simplification
of state aid rules.
The Government's view
10.7 The Minister of State for Trade, Investment
and Foreign Affairs, Department of Trade and Industry (Mr Douglas
Alexander) says, in words identical to those used by the Government
in relation to the last scoreboard:
"There are no direct policy implications
from this document, which is intended to increase transparency
and to emphasise the need for Member States to continue their
efforts in reducing the overall level of State aid as a percentage
of GDP and to redirect aid towards horizontal objectives of common
interest including economic and social cohesion and target it
to identified market failures. The European Commission is continuing
to review its State aid guidelines and to develop and modernise
procedures in order to evaluate and monitor the effectiveness
of State aid schemes."
Conclusion
10.8 We report this document, like previous scoreboards,
because it is a useful summary of the situation as regards state
aid in the European Union. We clear the document.
37 See headnote. Back
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