Revising regional aid

Margrethe Vestager

The Commission launched last Thursday a public consultation inviting all interested parties to comment on draft revised EU guidelines on regional state aid, the EU press service reported. The consultation will be open and running until 30 September.

“The Regional Aid Guidelines aim to promote the economic development of disadvantaged regions in the EU, while ensuring a level playing field between Member States. Regional aid is an important instrument used by Member States to enhance regional development. Today, we invite stakeholders to comment on our draft revised Guidelines which, besides the objective of regional development, will also support the twin transition to a green and digital economy,” Executive VP Margrethe Vestager, in charge of competition policy, said.

The Regional Aid Guidelines aim to promote the economic development of disadvantaged regions in the EU, while ensuring a level playing field between Member States. Regional aid is an important instrument used by Member States to enhance regional development. The current Regional Aid Guidelines are under revision in the context of the Commission's “fitness check” of the 2012 State aid modernisation package, which aims to evaluate if the current rules are still fit for purpose.

The draft revised Guidelines take into account the preliminary results of the fitness check exercise. These preliminary results show that the current guidelines have worked well in principle. At the same time, the Commission is proposing a number of targeted adjustments to simplify and reflect experience gained from the application of the current rules.

Furthermore, the draft revised guidelines reflect new policy priorities related to the European Green Deal and the European Industrial and Digital Strategy. For example, given the large investment needs for the twin transition, and to enable regions to bounce back from the economic effects of the coronavirus outbreak, the Commission is proposing to increase maximum aid intensities by enabling additional incentives for private investments in the most disadvantaged regions, while ensuring a level playing field between Member States. The Commission is also proposing additional procedural simplifications for State aid to Just Transition Areas that Member States are in the process of defining.

As part of its ongoing review of State aid rules, the Commission continues to reflect on additional measures in State aid enforcement that can contribute to the achievement of the Green Deal objectives, which must be based on clear and objective criteria. As part of today's consultation on the draft revised Regional Aid Guidelines, the Commission is also inviting stakeholders for views on this issue.

The current Guidelines, which were due to expire at the end of this year, have been prolonged until the end of 2021 in order to provide predictability and legal certainty during the revision process. In addition to the stakeholder consultation, the proposed text of the Regional Aid Guidelines will also be discussed in a meeting between the Commission and Member States that will take place towards the end of the consultation period.

This process will ensure that Member States and stakeholders have sufficient opportunities to comment on the draft Commission proposal. The adoption of the new Guidelines is envisaged for the beginning of 2021 to provide Member States sufficient time for the preparation and notification of their regional aid maps that will enter into force in 2022.

Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. In the Regional Aid Guidelines, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market.

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