Ian Rodgers

1
Globalisation, financial crisis, innovation and
climate change challenges for a modern State aid
policy
Ian Rodgers Chairman, BUSINESSEUROPE State Aid
Working Group Director, UK Steel
2
State aid general principles

• Minimise state interference in markets, allowing
  the most competitive firms to thrive.
• Requires consistency of approach across the whole
  of the EU.
• But rules must be clear and predictable for
  companies
• And transparent in their application.

3
State aid and globalisation - 1

• Europe should not attempt to use aid to compete
  with low cost economies, apart from
• Rescue restructuring aid
• Regional investment aid
• Focus on skills base and innovation.

4
State aid and globalisation - 2

• The EU should make full use of WTO rules to
  discipline overseas subsidies and other
  market-distorting practices.
• DDA should have been an opportunity to improve
  their application.
• Write additional disciplines into future FTAs.

5
The financial crisis

• A return to worldwide subsidisation and
  protectionism would prolong the crisis.
• The EU has an opportunity to lead by example.
• Communication on aid to financial institutions
  strikes the right balance
• Art. 87(3)(b) invocation is justified
• Impacts on competitors are minimised
• Rapidity of response applauded.

6
State aid and innovation

• 2006 Framework is an improvement.
• But serious concerns that some aspects will deter
  RD funding, particularly
• Detailed assessment, and requirement for
  counter-factual incentive effect analysis.
• Rigid categorisation of types of RD.
• Shortcomings perpetuated in block exemption
  Regulation.

7
State aid and climate change

• New guidelines expand the scope for encouraging
  investment in, and operation of, carbon-efficient
  technologies
• Negative incentive test is repeated.
• Positive distortions of competition through
  energy savings are prevented.
• CCS correctly to be considered later.

8
State aid and the EU Emissions Trading Scheme
post-2012

• The draft Directive as published by the
  Commission could drive energy-intensive
  manufacturing out of the EU.
• Amendments to correct this are opposed by DG
  Competition because of their perceived
  relationship with competition/state aid policy.
• However, neither articles 81 to 86 nor articles
  87 to 89 are applicable.

9
Conclusion

• The EUs unique state aid rules are a vital
  component of a vigorous and enterprise-oriented
  single market.
• We welcome
• The process of continuous appraisal and
  improvement
• The Commissions openness to input from
  stakeholders.