# C_2013011EN.01004901.xml

| 15.1.2013 | EN | Official Journal of the European Union | C 11/49 |
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15.1.2013

EN

Official Journal of the European Union

C 11/49

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Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU State Aid Modernisation (SAM)’

COM(2012) 209 final

2013/C 11/11

Rapporteur: Ms BUTAUD-STUBBS

Ms BUTAUD-STUBBS

On 8 May 2012, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU State Aid Modernisation (SAM)

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU State Aid Modernisation (SAM)

COM(2012) 209 final.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 October 2012.

At its 484th plenary session, held on 14 and 15 November 2012 (meeting of 14 November 2012), the European Economic and Social Committee adopted the following opinion by 128 votes to none with five abstentions.

1.   Conclusion and recommendations

Conclusion and recommendations

| 1.1 | European state aid policy is of strategic importance for the EU in a highly competitive globalised economy. |
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1.1

European state aid policy is of strategic importance for the EU in a highly competitive globalised economy.

| 1.2 | The EESC considers that the reform proposed in the Commission's communication should be supported in view of the objectives of that reform, which are:






  — | to make European state aid policy contribute to the 2020 strategy; |
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1.2

The EESC considers that the reform proposed in the Commission's communication should be supported in view of the objectives of that reform, which are:

—

to make European state aid policy contribute to the 2020 strategy;

| — | to establish a new, more efficient division of responsibilities between the Commission and the Member States; and |
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to establish a new, more efficient division of responsibilities between the Commission and the Member States; and

| — | to make a number of procedural improvements. |
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—

to make a number of procedural improvements.

| 1.3 | The EESC shares the Commission's vision of strengthening the positive connection between effective state aid and the objective of sustainable and inclusive growth. A targeted state aid policy will make it possible to stimulate innovation (including social innovation), the use of green technologies and the development of human capital while avoiding environmental damage. A dynamic, well-targeted state aid policy can make an active contribution to achieving high levels of employment and social cohesion. |
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1.3

The EESC shares the Commission's vision of strengthening the positive connection between effective state aid and the objective of sustainable and inclusive growth. A targeted state aid policy will make it possible to stimulate innovation (including social innovation), the use of green technologies and the development of human capital while avoiding environmental damage. A dynamic, well-targeted state aid policy can make an active contribution to achieving high levels of employment and social cohesion.

| 1.4 | However, this reform, with its ambitious goals, methods and timetable, needs clarification in certain respects. |
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1.4

However, this reform, with its ambitious goals, methods and timetable, needs clarification in certain respects.

| 1.5 | The EESC calls on the Commission to clarify certain concepts used in the communication:






  1.5.1 | It also seems to be worth giving a more precise definition of the key concept of "market failures" as applied by the Commission, since its meaning varies depending on the context – access to credit, financing of broadband networks, commercial property development, access to innovation, training, development of female entrepreneurship etc. Market failures can also be linked to various causes, such as negative externalities, imperfect information, coordination problems, market power etc. |
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1.5

The EESC calls on the Commission to clarify certain concepts used in the communication:

1.5.1

It also seems to be worth giving a more precise definition of the key concept of "market failures" as applied by the Commission, since its meaning varies depending on the context – access to credit, financing of broadband networks, commercial property development, access to innovation, training, development of female entrepreneurship etc. Market failures can also be linked to various causes, such as negative externalities, imperfect information, coordination problems, market power etc.

| 1.6 | The EESC has certain queries to raise in relation to the planned reforms:






  1.6.1 | The Commission's proposed reform would give the Member States greater responsibility in relation to the granting and control of state aid. What legal and practical means does the Commission have in mind to convince Member States to cooperate fully in enforcing state aid law? |
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1.6

The EESC has certain queries to raise in relation to the planned reforms:

1.6.1

The Commission's proposed reform would give the Member States greater responsibility in relation to the granting and control of state aid. What legal and practical means does the Commission have in mind to convince Member States to cooperate fully in enforcing state aid law?

| 1.6.2 | Giving more responsibility for state aid control to Member States risks leading to subjective application of the rules by Member States, unfair behaviour by states and the return of a certain economic nationalism that would end up increasing legal uncertainty for firms. |
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1.6.2

Giving more responsibility for state aid control to Member States risks leading to subjective application of the rules by Member States, unfair behaviour by states and the return of a certain economic nationalism that would end up increasing legal uncertainty for firms.

| 1.6.3 | On the basis of a WTO report, the Commission concludes that our main global competitors provide comparable amounts of state aid. However, European state aid policy provides a more transparent framework than the existing systems in the United States, India, Korea or Brazil. These data are obsolete, and should be updated to give the Commission a complete and precise picture of the current situation. |
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1.6.3

On the basis of a WTO report, the Commission concludes that our main global competitors provide comparable amounts of state aid. However, European state aid policy provides a more transparent framework than the existing systems in the United States, India, Korea or Brazil. These data are obsolete, and should be updated to give the Commission a complete and precise picture of the current situation.

| 1.6.4 | The Commission considers how the features of the EU state aid control system compare with the other existing systems, but does not draw any particular conclusion. Why does the Commission not take this opportunity to reiterate the need for an economic approach aimed at a level playing field globally, so as to allow aid to be granted in a balanced way? The EESC emphasises that the specific consequences of illegal foreign subsidies which threaten the competitiveness of European firms in relation to their global competitors must be corrected effectively. |
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1.6.4

The Commission considers how the features of the EU state aid control system compare with the other existing systems, but does not draw any particular conclusion. Why does the Commission not take this opportunity to reiterate the need for an economic approach aimed at a level playing field globally, so as to allow aid to be granted in a balanced way? The EESC emphasises that the specific consequences of illegal foreign subsidies which threaten the competitiveness of European firms in relation to their global competitors must be corrected effectively.

| 1.7 | Finally, the EESC proposes certain changes which it considers necessary due to the need, recognised by the Commission and the Council, to support SMEs, particularly at a time when they are facing competitive pressures from third country firms that benefit from direct and indirect state aid that is both greater in amount and allocated in a less transparent way. |
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1.7

Finally, the EESC proposes certain changes which it considers necessary due to the need, recognised by the Commission and the Council, to support SMEs, particularly at a time when they are facing competitive pressures from third country firms that benefit from direct and indirect state aid that is both greater in amount and allocated in a less transparent way.

| 1.7.1 | The EESC proposes that the ceiling for de minimis aid (which is applied to each firm on the basis of a rolling period of three consecutive years) should, in view of its small amount, its benefits for SMEs and very small enterprises and its limited impact on the internal market, be permanently increased from EUR 200 000 to EUR 500 000, as was recently decided in relation to services of general economic interest. |
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1.7.1

The EESC proposes that the ceiling for de minimis aid (which is applied to each firm on the basis of a rolling period of three consecutive years) should, in view of its small amount, its benefits for SMEs and very small enterprises and its limited impact on the internal market, be permanently increased from EUR 200 000 to EUR 500 000, as was recently decided in relation to services of general economic interest.

de minimis

| 1.7.2 | Considering the need to help European SMEs develop international markets, the EESC proposes an amendment to Article 27(3) of the General Block Exemption Regulation providing for the compatibility with the common market of aid to SMEs for participation in fairs and exhibitions for a period not exceeding three consecutive years. |
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1.7.2

Considering the need to help European SMEs develop international markets, the EESC proposes an amendment to Article 27(3) of the General Block Exemption Regulation providing for the compatibility with the common market of aid to SMEs for participation in fairs and exhibitions for a period not exceeding three consecutive years.

| 1.8 | The EESC has three practical recommendations for the Commission based on its own experience:






  1.8.1 | A practical layman's guide should be produced, setting out definitions, prohibitions and procedures and available in all the official languages of the EU, so as to improve understanding and proper use of state aid by firms, courts and public authorities. |
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1.8

The EESC has three practical recommendations for the Commission based on its own experience:

1.8.1

A practical layman's guide should be produced, setting out definitions, prohibitions and procedures and available in all the official languages of the EU, so as to improve understanding and proper use of state aid by firms, courts and public authorities.

| 1.8.2 | Additional training seminars should be organised for the responsible authorities in the Member States, to ensure that EU state aid law is applied as uniformly as possible in all Member States. |
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1.8.2

Additional training seminars should be organised for the responsible authorities in the Member States, to ensure that EU state aid law is applied as uniformly as possible in all Member States.

| 1.8.3 | Given the scale of the changes that are envisaged, the EESC requests that it be consulted on the review of the de minimis regulation, the enabling regulation and the General Block Exemption Regulation. |
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1.8.3

Given the scale of the changes that are envisaged, the EESC requests that it be consulted on the review of the de minimis regulation, the enabling regulation and the General Block Exemption Regulation.

de minimis

2.   Content of the communication

Content of the communication

| 2.1 | The Commission intends to reform European state aid policy along three main lines:






  a) | fostering smart, sustainable and inclusive growth in a competitive internal market, in line with the Europe 2020 strategy; |
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2.1

The Commission intends to reform European state aid policy along three main lines:

a)

fostering smart, sustainable and inclusive growth in a competitive internal market, in line with the Europe 2020 strategy;

| b) | focusing the Commission's ex ante scrutiny on the most significant cases with a major impact on the internal market; and |
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b)

focusing the Commission's ex ante scrutiny on the most significant cases with a major impact on the internal market; and

| c) | simplifying the procedural rules and speeding up the decision-making process. |
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c)

simplifying the procedural rules and speeding up the decision-making process.

| 2.2 | The reform is based on a mixed assessment of the current policy:






  — | the current rules are difficult to understand, apply and monitor. As Commissioner Almunia himself told the EESC on 23 February 2012, there are 37 different acts (regulations, communications and guidelines) in place; |
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2.2

The reform is based on a mixed assessment of the current policy:

—

the current rules are difficult to understand, apply and monitor. As Commissioner Almunia himself told the EESC on 23 February 2012, there are 37 different acts (regulations, communications and guidelines) in place;

| — | the current results of monitoring of the implementation of block exempted measures reveal a certain lack of compliance with state aid rules; |
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the current results of monitoring of the implementation of block exempted measures reveal a certain lack of compliance with state aid rules;

| — | the Commission does not have rules that would allow it to set clear priorities for complaints handling; |
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the Commission does not have rules that would allow it to set clear priorities for complaints handling;

| — | contacts between the Member States and the Commission could work better as regards exchange of information and cooperation during the notification procedure. |
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contacts between the Member States and the Commission could work better as regards exchange of information and cooperation during the notification procedure.

| 2.3 | To address this situation, in a context in which full advantage must be taken of the potential of the single market (for example in energy, transport and digital technologies), the Commission is proposing a reform with ambitious goals, methods and timetable. |
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2.3

To address this situation, in a context in which full advantage must be taken of the potential of the single market (for example in energy, transport and digital technologies), the Commission is proposing a reform with ambitious goals, methods and timetable.

| 2.4 | The proposed reform has ambitious goals in that it involves, on the one hand, making one of the oldest and best integrated EU policies support growth in Europe, and on the other hand achieving rather radical procedural improvements, although those improvements are neither set out in detail nor quantified in the communication. |
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2.4

The proposed reform has ambitious goals in that it involves, on the one hand, making one of the oldest and best integrated EU policies support growth in Europe, and on the other hand achieving rather radical procedural improvements, although those improvements are neither set out in detail nor quantified in the communication.

| 2.5 | The proposed reform is ambitious as to its methods in that the Commission proposes to make a coherent set of changes all at once, within the framework of an "integrated strategy", involving:






  — | revision of the de minimis regulation; |
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2.5

The proposed reform is ambitious as to its methods in that the Commission proposes to make a coherent set of changes all at once, within the framework of an "integrated strategy", involving:

—

revision of the de minimis regulation;

de minimis

| — | changes to the Council enabling regulation concerning the definition of certain categories of aid that are deemed to be compatible with the internal market and are therefore exempt from notification; |
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changes to the Council enabling regulation concerning the definition of certain categories of aid that are deemed to be compatible with the internal market and are therefore exempt from notification;

| — | revision of the General Block Exemption Regulation in relation to the categories of aid covered by the enabling regulation in force; |
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revision of the General Block Exemption Regulation in relation to the categories of aid covered by the enabling regulation in force;

| — | legal clarification of the notion of state aid; and |
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legal clarification of the notion of state aid; and

| — | modernisation of the state aid procedural regulation. |
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modernisation of the state aid procedural regulation.

| 2.6 | The timetable of the proposed reform is ambitious in that the Commission aims to adopt the proposals for revision of the procedural regulation and the enabling regulation in Autumn 2012, and the other elements of the "package" by the end of 2013 – in other words, before the financial perspectives for the 2014-2020 period come into force. |
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2.6

The timetable of the proposed reform is ambitious in that the Commission aims to adopt the proposals for revision of the procedural regulation and the enabling regulation in Autumn 2012, and the other elements of the "package" by the end of 2013 – in other words, before the financial perspectives for the 2014-2020 period come into force.

3.   General comments

General comments

3.1   State aid control in the broader context of European competition law

State aid control in the broader context of European competition law

| 3.1.1 | The EESC supports the goals announced in the Commission's communication, which aims to "facilitate the treatment of aid which is well-designed, targeted at identified market failures and objectives of common interest", by focusing enforcement on cases with the biggest impact on the internal market, by streamlining the rules and taking faster decisions.
  This approach is part of a more general development in competition law, concerning both antitrust law (i.e. restrictive agreements and abuse of dominant position) and merger control. |
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3.1.1

The EESC supports the goals announced in the Commission's communication, which aims to "facilitate the treatment of aid which is well-designed, targeted at identified market failures and objectives of common interest", by focusing enforcement on cases with the biggest impact on the internal market, by streamlining the rules and taking faster decisions.

This approach is part of a more general development in competition law, concerning both antitrust law (i.e. restrictive agreements and abuse of dominant position) and merger control.

| 3.1.2 | In relation to antitrust law, the "modernisation of competition law" put in place by Regulation 1/2003 (1) and its accompanying texts began the decentralisation of competition law enforcement by ending the prior notification system. That has allowed the Commission to focus its activity on tackling the most serious restrictions and abuses, particularly cartels. This modernisation was accompanied by strengthened cooperation between the network of national competition authorities on one side and the Commission on the other. |
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3.1.2

In relation to antitrust law, the "modernisation of competition law" put in place by Regulation 1/2003 (1) and its accompanying texts began the decentralisation of competition law enforcement by ending the prior notification system. That has allowed the Commission to focus its activity on tackling the most serious restrictions and abuses, particularly cartels. This modernisation was accompanied by strengthened cooperation between the network of national competition authorities on one side and the Commission on the other.

1

| 3.1.3 | In relation to merger control, Commissioner Almunia recently announced a possible forthcoming reform of the European merger control system with the aim, in particular, of allowing the Commission to focus on those mergers that are most likely to affect the market (2). In the short term, that would involve streamlining the handling of the least problematic cases by improving the "simplified procedure" and reviewing the pre-notification procedure. In the longer term, the merger control regime could be revised, by scrutinising acquisitions of non-controlling minority stakes and through better interaction between the national and European systems in relation to thresholds and referrals. |
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3.1.3

In relation to merger control, Commissioner Almunia recently announced a possible forthcoming reform of the European merger control system with the aim, in particular, of allowing the Commission to focus on those mergers that are most likely to affect the market (2). In the short term, that would involve streamlining the handling of the least problematic cases by improving the "simplified procedure" and reviewing the pre-notification procedure. In the longer term, the merger control regime could be revised, by scrutinising acquisitions of non-controlling minority stakes and through better interaction between the national and European systems in relation to thresholds and referrals.

2

3.2   Guiding principles for a general state aid framework

Guiding principles for a general state aid framework

| 3.2.1 | The EESC reiterates its support for a general state aid framework based on the following principles (3):






  — | targeting and selectivity of aid; |
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3.2.1

The EESC reiterates its support for a general state aid framework based on the following principles (3):

3

—

targeting and selectivity of aid;

| — | consistency with the strategies for completion of the single market; |
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—

consistency with the strategies for completion of the single market;

| — | simplification, transparency and legal certainty of procedures and rules; |
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—

simplification, transparency and legal certainty of procedures and rules;

| — | improved dialogue with Member States in the decision-making and implementation processes, and at the stage of evaluation and monitoring of effectiveness; |
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—

improved dialogue with Member States in the decision-making and implementation processes, and at the stage of evaluation and monitoring of effectiveness;

| — | better information for firms on state aid rules and procedures; |
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better information for firms on state aid rules and procedures;

| — | sharing of responsibility, through the creation of national coordination bodies; and |
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—

sharing of responsibility, through the creation of national coordination bodies; and

| — | adapting European state aid rules to the aid strategies pursued by our main trading partners, to ensure a level playing field vis-à-vis the rest of the world (4). |
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adapting European state aid rules to the aid strategies pursued by our main trading partners, to ensure a level playing field vis-à-vis the rest of the world (4).

vis-à-vis

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3.3   Increasing the responsibilities of the Member States in enforcing the state aid rules

Increasing the responsibilities of the Member States in enforcing the state aid rules

| 3.3.1 | The EESC's understanding is that focusing enforcement by the Commission on the most problematic cases would in particular depend on broadening the range of aid measures which are exempt from the notification obligation. That would necessarily be linked to greater responsibility for the Member States. The EESC notes, however, that the specific features of state aid law would need to be taken into account. The state and, more broadly, all state and public entities that may grant aid would, in a sense, be judge in their own cause. |
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3.3.1

The EESC's understanding is that focusing enforcement by the Commission on the most problematic cases would in particular depend on broadening the range of aid measures which are exempt from the notification obligation. That would necessarily be linked to greater responsibility for the Member States. The EESC notes, however, that the specific features of state aid law would need to be taken into account. The state and, more broadly, all state and public entities that may grant aid would, in a sense, be judge in their own cause.

| 3.3.2 | Giving more responsibility for state aid control to Member States risks leading to subjective application of the rules by Member States, unfair behaviour by states and the return of a certain economic nationalism that would end up increasing legal uncertainty for firms. |
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3.3.2

Giving more responsibility for state aid control to Member States risks leading to subjective application of the rules by Member States, unfair behaviour by states and the return of a certain economic nationalism that would end up increasing legal uncertainty for firms.

| 3.3.3 | Several approaches could be considered in order to limit this type of risk to the minimum:






  — | strengthening transparency by way of reporting obligations on the Member States. An annual summary report on the application of the de minimis regulation and the General Block Exemption Regulation could be published and made available on the Commission website; |
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3.3.3

Several approaches could be considered in order to limit this type of risk to the minimum:

—

strengthening transparency by way of reporting obligations on the Member States. An annual summary report on the application of the de minimis regulation and the General Block Exemption Regulation could be published and made available on the Commission website;

de minimis

| — | the financial risk of illegality or incompatibility is borne by the aid beneficiary alone, which is obliged to repay the amount concerned together with interest. The financial liability of the Member States could therefore be increased, for example by imposing a fine on the "public authority" that granted the aid in question; |
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—

the financial risk of illegality or incompatibility is borne by the aid beneficiary alone, which is obliged to repay the amount concerned together with interest. The financial liability of the Member States could therefore be increased, for example by imposing a fine on the "public authority" that granted the aid in question;

| — | the creation of independent national agencies responsible for state aid policy could be considered. Those agencies would act as a contact point both for the Commission and for firms; |
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—

the creation of independent national agencies responsible for state aid policy could be considered. Those agencies would act as a contact point both for the Commission and for firms;

| — | the Commission should conduct more effective ex post monitoring and should actively promote best practices. |
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—

the Commission should conduct more effective ex post monitoring and should actively promote best practices.

3.4   Simplification and transparency of procedures

Simplification and transparency of procedures

| 3.4.1 | The Commission and the Member States showed their ability to respond to the economic and financial crisis by adopting a series of specific texts between 2008 and 2011 (5). Due in particular to greater cooperation on the part of the Member States and a major mobilisation by the Commission services, decisions were taken in very short timescales, to the satisfaction of Member States and firms. |
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3.4.1

The Commission and the Member States showed their ability to respond to the economic and financial crisis by adopting a series of specific texts between 2008 and 2011 (5). Due in particular to greater cooperation on the part of the Member States and a major mobilisation by the Commission services, decisions were taken in very short timescales, to the satisfaction of Member States and firms.

5

| 3.4.2 | Generally speaking, however, stakeholders still find that the procedures are too long and complex. The EESC therefore supports the Commission's intention to tackle the long timescales for handling cases by improving administrative practices and by calling on the Member States to take responsibility in order to ensure transparency and efficiency. The timescales must, to the extent possible, match the rhythm of economic activities. |
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3.4.2

Generally speaking, however, stakeholders still find that the procedures are too long and complex. The EESC therefore supports the Commission's intention to tackle the long timescales for handling cases by improving administrative practices and by calling on the Member States to take responsibility in order to ensure transparency and efficiency. The timescales must, to the extent possible, match the rhythm of economic activities.

| 3.4.3 | In this respect, the "simplified procedure" for dealing with certain types of aid (6) could be extended, while remaining circumscribed. Under this procedure, the Commission simply checks whether the aid measure complies with the existing rules and practices. |
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3.4.3

In this respect, the "simplified procedure" for dealing with certain types of aid (6) could be extended, while remaining circumscribed. Under this procedure, the Commission simply checks whether the aid measure complies with the existing rules and practices.

6

3.5   Better enforcement

Better enforcement

| 3.5.1 | Effective implementation of state aid law is essential. However, the EESC notes that national courts are often not in a position to ensure that state aid law is enforced efficiently, particularly in relation to protecting the rights of firms that suffer as a result of the grant of illegal aid measures to their competitors. Several reasons for this could be mentioned, including the fact that judges lack expertise in European competition law and the procedural restrictions which are an inherent part of litigation. |
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3.5.1

Effective implementation of state aid law is essential. However, the EESC notes that national courts are often not in a position to ensure that state aid law is enforced efficiently, particularly in relation to protecting the rights of firms that suffer as a result of the grant of illegal aid measures to their competitors. Several reasons for this could be mentioned, including the fact that judges lack expertise in European competition law and the procedural restrictions which are an inherent part of litigation.

| 3.5.2 | Solutions should be developed to allow better enforcement of state aid law in practice. Both firms and national courts should have more effective tools and procedures at their disposal. |
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3.5.2

Solutions should be developed to allow better enforcement of state aid law in practice. Both firms and national courts should have more effective tools and procedures at their disposal.

4.   Specific comments

Specific comments

4.1   Clarifying the concept of "market failure"

Clarifying the concept of "market failure"

| 4.1.1 | The EESC supports the aim of approving only those aid measures that (i) contribute to supporting growth by seeking to remedy a market failure (a grant of state aid should complement, not replace, private expenditure) and (ii) have an incentive effect, that is to say that they induce the beneficiary to undertake activities that it would not have carried out in the absence of aid. |
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4.1.1

The EESC supports the aim of approving only those aid measures that (i) contribute to supporting growth by seeking to remedy a market failure (a grant of state aid should complement, not replace, private expenditure) and (ii) have an incentive effect, that is to say that they induce the beneficiary to undertake activities that it would not have carried out in the absence of aid.

| 4.1.2 | In this context, it is essential for the concept of "market failure" to be clarified and illustrated with examples from different fields, based in particular on the existing European case law, to help firms as well as public authorities to understand the concept in a consistent way and apply it to state aid measures at the design stage. |
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4.1.2

In this context, it is essential for the concept of "market failure" to be clarified and illustrated with examples from different fields, based in particular on the existing European case law, to help firms as well as public authorities to understand the concept in a consistent way and apply it to state aid measures at the design stage.

4.2   Developing and updating international comparisons in the state aid field

Developing and updating international comparisons in the state aid field

| 4.2.1 | Paragraphs 16 and 17 of the communication refer to third countries' competition policies. The Commission concludes that, while the EU has a more transparent framework, it allows comparable levels of aid. That statement is based on a comparative analysis carried out by the WTO in 2006. The EESC calls on the Commission to have the WTO undertake a more up-to-date study, since many non-EU WTO member countries have provided massive subsidies in the context of the crisis, particularly for manufacturing industry. The competition policy that will come into effect from 2013 should be based on a detailed, recent picture of the situation in, for example, the United States, China, India and Brazil (including aid granted by the federal states) in a context where economic competition has been sharpened by the global crisis. |
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4.2.1

Paragraphs 16 and 17 of the communication refer to third countries' competition policies. The Commission concludes that, while the EU has a more transparent framework, it allows comparable levels of aid. That statement is based on a comparative analysis carried out by the WTO in 2006. The EESC calls on the Commission to have the WTO undertake a more up-to-date study, since many non-EU WTO member countries have provided massive subsidies in the context of the crisis, particularly for manufacturing industry. The competition policy that will come into effect from 2013 should be based on a detailed, recent picture of the situation in, for example, the United States, China, India and Brazil (including aid granted by the federal states) in a context where economic competition has been sharpened by the global crisis.

| 4.2.2 | The state aid rules should be implemented in such a way as to allow the strengthening of firms' competitiveness, both in the internal market and internationally. However, European firms face competition from companies based in third countries, whose legislation sometimes contains no restrictions on state aid. That can lead to serious competition distortions, to the detriment of European firms, as the Commission notes in the communication (7). |
| --- | --- |

4.2.2

The state aid rules should be implemented in such a way as to allow the strengthening of firms' competitiveness, both in the internal market and internationally. However, European firms face competition from companies based in third countries, whose legislation sometimes contains no restrictions on state aid. That can lead to serious competition distortions, to the detriment of European firms, as the Commission notes in the communication (7).

7

| 4.2.3 | Within the scope of its powers, the Commission undertakes initiatives aimed at establishing a global level playing field, based around the concept of fair competition. Any reform of state aid law must therefore be coordinated with the action that the Commission is taking elsewhere, using trade policy instruments such as WTO rules and bilateral free-trade agreements. |
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4.2.3

Within the scope of its powers, the Commission undertakes initiatives aimed at establishing a global level playing field, based around the concept of fair competition. Any reform of state aid law must therefore be coordinated with the action that the Commission is taking elsewhere, using trade policy instruments such as WTO rules and bilateral free-trade agreements.

4.3   Reviewing the approach to export aid

Reviewing the approach to export aid

| 4.3.1 | In its proposal for a regulation establishing a programme for the competitiveness of enterprises and small and medium-sized enterprises 2014–2020 (COM(2011) 834 final), the Commission recognises the need to find a springboard for growth by helping SMEs export within the EU and globally. Assistance and support services to SMEs with growth prospects are to be provided through the Enterprise Europe Network. |
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4.3.1

In its proposal for a regulation establishing a programme for the competitiveness of enterprises and small and medium-sized enterprises 2014–2020 (COM(2011) 834 final), the Commission recognises the need to find a springboard for growth by helping SMEs export within the EU and globally. Assistance and support services to SMEs with growth prospects are to be provided through the Enterprise Europe Network.

| 4.3.2 | At the same time, however, the Commission's approach seems too restrictive, since, for example, there are several cumulative conditions set out in Article 27 of Regulation 800/2008 of 6 August 2008 in relation to the participation of SMEs in trade fairs and exhibitions: the aid must not exceed 50 % of the eligible costs, can only be granted to firms which fall within the EU definition of SMEs, and may only be granted for their first participation at a fair or exhibition. |
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4.3.2

At the same time, however, the Commission's approach seems too restrictive, since, for example, there are several cumulative conditions set out in Article 27 of Regulation 800/2008 of 6 August 2008 in relation to the participation of SMEs in trade fairs and exhibitions: the aid must not exceed 50 % of the eligible costs, can only be granted to firms which fall within the EU definition of SMEs, and may only be granted for their first participation at a fair or exhibition.

| 4.3.3 | We consider this "first participation" requirement to be inappropriate in relation to an international development strategy, which requires a presence of at least three years on a given market before the development strategy (agency, establishment or distribution) can be chosen. The EESC therefore proposes replacing the "first participation" requirement in Article 27(3) with a requirement of "participation in a fair or exhibition for not more than three consecutive years", while leaving the other two requirements unchanged. |
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4.3.3

We consider this "first participation" requirement to be inappropriate in relation to an international development strategy, which requires a presence of at least three years on a given market before the development strategy (agency, establishment or distribution) can be chosen. The EESC therefore proposes replacing the "first participation" requirement in Article 27(3) with a requirement of "participation in a fair or exhibition for not more than three consecutive years", while leaving the other two requirements unchanged.

4.4   Ensuring that state aid contributes to sustainable and inclusive growth

Ensuring that state aid contributes to sustainable and inclusive growth

| 4.4.1 | The EU should ensure that state aid stimulates innovation – including innovation in the social field, where the Innovation Union has already recognised the need for aid for social innovation – the use of green technologies and the development of human capital as part of a sustainable development model. The EESC welcomes the growing recognition of aid for social innovation as being compatible with the internal market (8) and hopes that this trend will strengthen in future in the context of the state aid modernisation process. |
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4.4.1

The EU should ensure that state aid stimulates innovation – including innovation in the social field, where the Innovation Union has already recognised the need for aid for social innovation – the use of green technologies and the development of human capital as part of a sustainable development model. The EESC welcomes the growing recognition of aid for social innovation as being compatible with the internal market (8) and hopes that this trend will strengthen in future in the context of the state aid modernisation process.

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| 4.4.2 | The EESC also supports a notion of state aid for research and development that covers the design, production and marketing of products, programmes and services that are accessible to vulnerable groups in society, particularly disabled people (9). |
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4.4.2

The EESC also supports a notion of state aid for research and development that covers the design, production and marketing of products, programmes and services that are accessible to vulnerable groups in society, particularly disabled people (9).

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Brussels, 14 November 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  OJ L 1, 4.1.2003, p. 1.

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(2)  http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/12/453&format=HTML&aged=0&language=EN.

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(3)  OJ C 65, 17.3.2006, p. 1, point 3.1.

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(4)  http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/132797.pdf.

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(5)  See State aid temporary rules established in response to the economic and financial crisis.

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(6)  OJ C 136, 16.6.2009, p. 3.

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(7)  See paragraph 17 of the communication.

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(8)  COM(2010) 546 final; COM(2011) 609 final; OJ L 7, 11.1.2012, p. 3.

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(9)  OJ C 24, 28.1.2012, p. 1.

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