Commission calls on Belgium to amend state aid scheme for R&D
The European Commission has called on Belgium to amend its state aid scheme for research and development (R&D) in the aeronautical sector so that it falls in line with EU rules. The request follows on from a formal investigation launched by the Commission in June 2006, which found that the scheme had been implemented in Belgium before receiving authorisation, as required according to the Community state aid rules. Between 2002 and 2006, the Belgian scheme provided aid totalling €82.5 million for the R&D activities of 10 companies in the aeronautical sector. Of this sum, a total of €41 million went to TechSpace Aero, which the Commission said, had exceeded the thresholds laid down in the EU state aid framework for R&D. The Commission also found that the grant repayment system in the Belgian scheme was not in keeping with standard EU practice. Normally, if an R&D project is successful, the grant recipient is expected to pay back the loan with interest. However, under the Belgium scheme, repayments ceased once the grant had been refunded. No interest was payable to the state. Neelie Kroes, Commissioner for Competition, said that the scheme had created an unfair advantage for Belgian companies which had to be redressed. 'The state aid granted to Belgian companies in the aeronautical sector must not be more generous than that granted to their European partners and competitors, otherwise there is a risk of competition within the common market being distorted. The Belgian authorities have agreed to amend the aid awarded under this scheme by 31 December. In particular, it will have to reduce the aid awarded to Techspace Aero to €32 million from €41.3 million.
Countries
Belgium