DG COMP Staff meeting Priorities and Resources

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The General Block Exemption Regulation (GBER)

2
Context State aid action Plan

• "State Aid Action Plan" (2005)
• A modernised state aid policy Lisbon strategy
  SBA (2008)
• Reform package based on
• Less and better targeted state aid
• A refined economic approach
• More effective procedures, better enforcement,
  higher predictability and enhanced transparency
• A shared responsibility between the Commission
  and Member States
• These features are also present in GBER
• SAAP Changing all instruments together gt
  coherence
• Purpose incentivise MST to use aid budgets for
  Lisbon aid

3
GBER - Guidelines

Automatic compatibility through BLOCK EXEMPTIONS
Quick view through SECTORAL GUIDELINES /
CHECK-LISTS
Detailed assessment through CASE-BY-CASE
ANALYSIS
4
Structure of GBER

• Chapter I Horizontal provisions
• Standardised conditions and definitions
• Harmonisation simplification
• Chapter II Different exempted aid types
• Chapter III Transitional provisions
• Annexes
• - Definition of SME (cfr Commission
  Recommendation 2003)
• - Summary information sheets for RD and large
  regional projects
• - Summary information sheets for all other types
  of aid

5

• Chapter I

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Chapter I Article 1 Scope

• Overview of aid covered by GBER (art 1.1.)
• a) regional aid investment aid newly created
  enterprises
• b) SME investment and employment aid
• c) aid for creation of entreprises by female
  entrepreneurs
• d) aid for environmental protection
• e) aid for consultancy and participation in
  fairs (SMEs)
• f) aid in the form of risk capital
• g) aid for research, development and innovation
• h) training aid
• i) aid for disadvantaged or disabled workers

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Chapter I Article 1 Scope

• Exclusion of export aid (WTO) (art 1.2)
• Self-standing sectoral exclusions (art 1.3)
• Exclusion of all ad hoc aid to large enterprises
  (art 1.5)
• Exclusion of all undertaking in difficulty (art
  1.6)
• Simplified definition in of undertakings in
  difficulty (art 2.31)
• Young SMEs incorporated since less than 3 years
  (recital 15)

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Chapter I Article 2 Definitions

• General definitions (art 2)
• Specific definitions (art 17-28-30-38)
• wage costs (art 2.15) include child care and
  parent care costs
• severely disadvantaged worker (art 2.19)
• Enterprise newly created by female
  entrepreneurs (art 2.28)
• Steel sector (art 2.29) definition based on
  annex I ECSC treaty
• Undertaking in difficulty (art 2.31)
• See point 10 RR guidelines (not point 11 !)
  

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Chapter I Articles 3 4

• Article 3 conditions for exemption
• Express reference to relevant provision of
  chapter II
• Article 4 calculation of aid intensities
• Gross grant equivalent
• Discounting when several instalments
• Evidence of eligible costs should be kept

10
Chapter I Article 5 transparent aid

• GBER only applies to Transparent aid
• Inspired by BER 1628/2006 and De minimis BER
• Ex ante calculation without need to undertake a
  risk assessment
• Loans new reference rate methodology
• Guarantees
• Notified methodologies (cfr 1628/2006)
• Safe harbour premiums of Guarantee Notice
• Capital injections excluded
• Risk capital only under the specific covered aid
  measure
• Fiscal measures cap to be imposed
• Repayable advances on the full amount

11

12
Chapter I Article 6 Notification ceilings

• Ceilings raised and clarified
• Training aid increase from 1 M / project to 2
  M / project
• Social aid (art 40 42) increase from 5 m /
  year to 10 M / year
• SME aid /- 2 M (25 M 50 15) to 7.5 M
• Only applies to aid under art 15, not to
  regional aid under art 13 see definition of art
  2.16
• Environmental aid
• - Ceiling of 7.5 M for environmental investment
  aid
• - No ceiling for environmental tax reductions
  (art 25)

13
Chapter I Article 7 cumulation

• Three main scenarios envisaged
• Cumulation SA SA possible with ? clear eligible
  costs.
• Respective ceilings apply (art 7.2 GBER)
• Cumulation SA SA or SA DM on same clear
  eligible costs possible up to highest applicable
  ceiling
• (e.g. regional aid SME investment aid up to
  ceiling provided in art 13)
• Cumulation of SA with clearly identifiable
  eligible costs SA without clearly identifiable
  eligible costs (risk capital only) specific
  rule of art 7.5
• Not supposed to apply to cumulation of SA not
  under GBER with SA under GBER. (Cfr art 7.3 GBER
  and recital 27)

14
Chapter I Article 8 Incentive effect

• Key feature of refined economic analysis
• Substantial modifications to distinguish
  underlying principles/ practical conditions
• Clarification that art 8.2 applies to all aid to
  SMEs
• Clarification that art 8.3 applies to all aid to
  large companies
• No in depth assessment like, for instance, in
  notified RDI cases (Neoval)
• Art 8.3 e) clarification of the condition with
  respect to regional aid
• Art 8.4 special provisions for
• Fiscal measures (including special provision on
  successor schemes)
• Social aid
• Environmental tax reductions (art 25)
• Risk capital (art 29)

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Chapter I Article 9 Transparency

• Ex ante ID number replaced by ex post provision
  of summary information sheet
• Precise reference to chapter II of GBER (except
  fiscal measures)
• Obligation to maintain active web-link with legal
  text
• Special provisions for RD aid and large regional
  aid projects (art 2.12) ? (Annex II GBER)

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Chapter I Articles 10 -11

• Commission monitors application GBER (art 10.1)
• Information may be asked when monitoring (art
  10.2)
• Withdrawal of benefit of GBER
• Clarification with respect to possibility for
  the Commission to withdraw benefit of GBER cfr
  recital 6
• Withdrawal only concerns the future
• Withdrawal may concern only parts of the GBER
  (specific provisions of chapter II of GBER)

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Chapter I Article 12 Investment aid

• Applies to regional investment aid, SME
  investment aid and environmental investment aid
  (cfr definition in art 2.17)
• Restrictions with regard to capital assets waived
  for business succession of small enterprises
  family former employees (art 12.1.b)
• Restrictions with regard to intangible assets
• Distinction between SME investment aid (assets
  can be used within entire undertaking) and
  regional investment aid (assets should be used in
  establishment in assisted region concerned) (art
  12.2.a art 12.2.d))

18

• Chapter II

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Chapter II Articles 13 - 16

• Regional investment employment aid (art 13)
  Identical to BER 1628/2006
• - Continuity for existing schemes covered by
  1628/2006 see art 44.3
• - Modified condition of incentive effect
• Aid for newly created small enterprises (art 14)
  cfr section 6 of the RAG guidelines (2006)
• SME investment aid employment aid (article 15)
• Increased intensities
• 7,5 to 10 for medium
• 15 to 20 for small
• No more regional bonus
• Aid for small enterprises created by female
  entrepreneurs (art 16)

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Chapter II Art. 17 - 25 Environmental aid

• New area under a BER provisions aligned on new
  environmental guidelines (2008)
• Definitions in line with environmental guidelines
  (art 17)
• Two possibilities for calculating eligible cost
  basis
• Easily identifiable costs basis (cfr footnote 48
  of environmental guidelines)
• Counterfactual analysis
• Simplified analysis of eligible costs of
  environmental investment aid
• - cfr recitals 49 to 51
• - See two alternatives in article 21 on energy
  savings
• - Operational benefits and costs may be
  disregarded !
• Larger eligible cost basis ? reduced aid
  intensities in genera guidelines 15

21
Chapter II Art 28-29Risk capital

• New area under BER !
• Inspired by Risk capital guidelines 2006 (section
  4)
• Tranches shall not exceed 1.5 Million / year
  (art 29.3)
• Only traditional types of RC public
  participation into investment funds (art 29.2)

22
Chapter II Art 30 37RDI aid

• Inspired by section 5 of RDI Framework (2006) and
  RD BER 364/2004
• RD aid also for large undertakings
• New Innovation measures included
• - aid for young innovative enterprises
• - aid for innovation advisory services
• - aid for loan of highly qualified personnel

23
Chapter II Art 38 42social aid

• Training aid see BER 68/2001 but with
  notification ceiling at 2 M (art 39)
• Recruitment of disadvantaged workers wage
  subsidies for 1 / 2 years (art 40)
• Employment of disabled workers life-long wage
  subsidies with increased aid intensity 75 (art
  41)
• Aid for additional costs for hiring disabled
  workers (art 42)

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Aid for feasibility studies (20 M)
Aid for RD projects (20 M)
Consultancy aid
Training aid (2M)
Innovation advisory
SME revenue
Environmental aid
Aid for fairs
Aid IP rights (5 M)
Aid for qualified personnel
De Minimis (200,000 )
SME investment aid (7,5 M)
Regional inv. aid (up to 37,5 M)
Risk capital aid (1.5 M)
De Minimis for guarantees (1.5 M)
Aid to young innovative enterprises
(1 M)
Pre-seed phase
Start-up phase
Emerging growth
Development
Seed phase
SME development stages aid possibilities
25

• The GBER is available at
• http//ec.europa.eu/comm/competition/state_aid/re
  form/reform.cfm
• Thank you for your attention !