Parliament committee supports Commission's plan to refocus state aid
MEPs in the European Parliament's committee on economic and monetary affairs have adopted a report backing the Commission's plans to refocus state aid in support of research and innovation. The Commission published its action plan on 7 June 2005 under the motif 'less and better-targeted state aid'. The document sets out the Commission's plans for reforming and streamlining EU state aid rules, encouraging Member States to focus support on competitiveness-enhancing areas such as research and development (R&D), innovation, and risk capital for small and medium sized enterprises (SMEs). On 25 January, a report supporting the broad approach proposed in the action plan was adopted unopposed by members of the economic and monetary affairs committee, with one abstention. The document, drafted by Swedish MEP Gunnar Hökmark, is also designed to provide Parliament's input into the action plan. MEPs agreed that state aid should only be used as a final resort in the case of a genuine market failure, and should be 'of a temporary nature'. Particularly, they would like to see aid targeted towards start-up companies and young innovative small firms. 'We can see very few examples where new inventions have had broad political support. More often the political interest has been focused on already existing industries,' said Mr Hökmark, who believes that such an approach has hampered growth in the past. The committee also urges that Member States be required to publish a list of the recipients of state aid, and that companies be obliged to publish details of support received, in order to 'enable shareholders to better evaluate the real performance of the company'. According to MEPs, the total amount of state aid granted each year in the EU is equivalent to around 50 per cent of the annual EU budget, 'even by the most conservative of estimates'.