Proposed state aid rules to facilitate R&D
Large enterprises conducting research and development (R&D) may find it easier to apply for state aid in the future, if new draft rules proposed by the European Commission are successfully introduced. Published on 25 April, the so-called 'block exemption' regulation foresees making R&D aid in favour of large companies exempt from the notification obligation laid down in the EC Treaty on state aid rules. Other areas which will become exempt include environmental aid and aid in the form of risk capital. The draft regulation, which forms part of the Commission's 2005 State Aid Action Plan, also aims to simplify by consolidating into one text five existing block exemptions. These are for aid to small and medium-sized enterprises (SMEs), aid to SMEs conducting R&D, aid for employment, training aid, and regional aid. 'The state aid reform package is well under way. This latest draft Regulation will make a significant contribution to the Commission's better regulation and simplification agenda. Once adopted, it will facilitate proper compliance with state aid rules while minimising bureaucracy for both Member States and the Commission,' commented Competition Commissioner Neelie Kroes. For each of the types of aid covered by the draft rules, Member States would no longer have to notify their aid measures to the Commission and await its approval before they could start granting aid, and so could implement such measures without delay. For instance, they would be allowed to grant aid of up to 50% of project costs to companies carrying out industrial research. However, as with existing exempted aid, state aid measures exceeding an indicated funding ceiling would still have to be notified to the Commission. The aim of the new rules is to ensure that the Commission focuses its attention on big state aid cases, which contain a greater risk of distortion of competition and trade. At the same time, the rules are expected to reduce the procedural burden for a high number of comparatively small cases, where the overall balance of the effects of the aid is considered positive for the Community. The draft regulation will now be sent to the Member States in advance of a meeting scheduled for the coming months. Following comments from Member States, the draft will be published in the EU's Official Journal to allow stakeholders to provide their feedback. The draft will then again be discussed with Member States in early 2008, with a view to the Commission adopting the final version of this regulation before summer 2008.