# EUR-Lex - 52012DC0778 - EN

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# 52012DC0778

**REPORT FROM THE COMMISSION State aid Scoreboard 2012 Update Report on State aid granted by the EU Member States - 2012 Update – /* COM/2012/0778 final */**

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REPORT FROM THE COMMISSION

State aid Scoreboard 2012 Update
Report on State aid granted by the EU Member States
- 2012 Update –

TABLE OF CONTENTS

Summary of the Report’s conclusions. 4

State aid in the current economic context 5

1........... State aid in 2011. 6

1.1........ Non-crisis aid. 6

1.2........ Crisis aid. 6

2........... Trends and patterns of
expenditure on non-crisis State aid in the Member States. 8

2.1........ State aid to industry and
services. 8

2.2........ State aid for horizontal
objectives of common interest 9

3........... State aid granted to
the financial sector and support for the real economy. 10

3.1........ State aid to the
financial sector 10

3.1.1..... Context 10

3.1.2..... Aid amounts approved and
used between 1 October 2008 and 1 October 2012. 10

3.1.3..... Aid amounts approved and
used in 2011. 10

3.2........ State aid to the real
economy. 11

3.2.1..... Context 11

3.2.2..... Amounts approved and used. 11

4........... Trends in State aid
expenditure by type of aid measures. 12

4.1........ Number of aid measures. 12

4.2........ Aid volume ‑ around
32.5% of aid to industry and services is block-exempted. 12

5........... Enforcing the State
aid rules. 12

5.1........ Unlawful aid. 12

5.2........ Recovery of aid. 12

5.3........ Enforcement of State aid
law: Cooperation with national courts. 13

5.4........ Ex-post monitoring. 13

Summary of the Report’s conclusions

Total expenditure
on non-crisis State aid further decreased in the EU in 2011 to € 64.3
billion or 0.5 % of EU GDP, when compared to previous years. While,
generally speaking, Member States continued their efforts to reduce overall aid
levels, a substantial part of the decrease is probably due to tougher budget
conditions in many Member States. That drop in expenditure obviously
contributed to the overall trend of lower State aid expenditure over the period
2006-2011. It remains to be seen in the coming years whether that downward
trend continues or levels out in the long-term.

Aid
earmarked for horizontal objectives of common interest continued to be high,
comprising roughly 90 % of total aid granted to industry and services.
Block-exempted aid increased further to about 32.5 % of total aid granted
to industry and services, compared to previous years, confirming the upward
trend seen since 2006. Overall, aid granted under block exemption and through
notified schemes remained high (roughly 87.5 %) whereas individual aid,
under scrutiny by the Commission, remained low.

Activities
to recover incompatible aid continued and this aid was recovered from
beneficiaries.

In 2011,
fewer new aid measures aimed at supporting the financial sector were authorised
by the Commission. The total amount of aid approved from 2008 until 1 October
2012 was € 5058.9 billion (40.3 % of EU GDP). However, most of the
measures approved since 2008 are still in operation due to continuing market
tensions.

The aid
to the financial sector in 2011, totalling € 714.7 billion
or 5.7 % of EU GDP, was mainly to provide guarantee support and
liquidity support and was concentrated in a few Member States.

With
respect to aid granted under the temporary framework, no new aid measures were
introduced by Member States, except a few for agriculture, while some existing
measures authorised in 2009 and 2010 were prolonged. In 2011, € 4.8
billion in aid was granted under the temporary framework which was less than in
previous years. The total amount of aid used under the temporary framework (€ 37.5
billion), remained well below the total amount of approved aid (€ 82.9
billion).

The 2012 update of the State Aid Scoreboard
provides a synopsis of the information submitted this year by Member States in
their annual reports on State aid expenditure in 2011.

As in previous Scoreboards, aid amounts are
divided into non-crisis aid and crisis aid, for methodological reasons and to
avoid distorting the picture of trends in State aid expenditure due to the
large aid amounts granted to the financial sector[1].

For non-crisis aid, a synopsis is provided
of State aid expenditure in 2011, accompanied by an overview of trends in State
aid granted to industry and services (by comparing expenditure over the periods
2006-2008 and 2009-2011). A distinction is made by type of aid, i.e. block‑
exempted aid, schemes and individual aid (individual aid granted under a scheme
and ad hoc aid).

Crisis aid is presented in the form of an
overview of the aid amounts approved (1 October 2008 until 1 October 2012) and
aid amounts used (1 October 2008 until 31 December 2011), by type of
instrument, i.e. recapitalisation, guarantees, impaired assets and liquidity
measures. Information on aid granted under the Temporary Community Framework
for State aid measures to support access to finance in the current financial
and economic crisis (the temporary framework)[2]
is provided in the form of the approved aid amounts and the aid amounts used.

Finally, an update is provided on what has
been achieved in the enforcement of State aid rules.

It is noted that the EFTA Surveillance
Authority also publishes an annual scoreboard[3]
giving updates on the volume of State aid granted by Iceland, Liechtenstein and
Norway.

The State Aid Scoreboard is composed of a
summary report, adopted by the college of Commissioners, focusing on key facts,
conclusions and trends in State aid granted by Member States and a Staff
Working Document ‘Facts and figures on State aid in the EU Member States’
(SWD), attached to the report to provide factual background.

State aid in the current economic context

EU GDP showed very moderate growth in 2011,
well below 1 % on average. Overall, private and public spending was still
low and had started to rise only slowly. Unemployment in the EU was above 10 %,
and the intensifying sovereign-debt crisis also weighed heavily on the EU
economy.

Since the crisis situation in the financial
sector continued, Member States also had to prolong their bank support in order
to maintain confidence in the sector and in particular to enable banks to
provide credit to the real economy.

Overall, the Commission’s State aid control
policy has again been one of the key factors in ensuring the coordinated
implementation of the unprecedented rescue measures, without creating undue
competition distortion in the internal market.

1.           State aid in 2011

1.1.        Non-crisis aid

Total non-crisis State aid amounted to € 64.3
billion, or 0.5 % of EU[4]
GDP[5], in 2011. Aid to industry and
services amounted to € 52.9 billion, or 0.42 % of EU GDP[6], aid to agriculture accounted
for € 8.7 billion, or 0.07 % of EU GDP, aid to fisheries amounted to
€ 109 million, or 0.001 % of EU GDP, and transport aid stood at € 2.2
billion, or 0.02 % of EU GDP.

The five largest granters of aid to
industry and services represent approximately 60 % of the total, € 39
billion in terms of volume; they are Germany (€ 13.6 billion), France (€ 12.3 billion),
United Kingdom (€ 4.8 billion), Spain (€ 4.5 billion) and Italy (€ 3.8
billion). The ranking is different in terms of % of GDP; in this case, most aid
is granted by Malta (1.6 %), Greece (1.2 %), Finland (1.2 %),
Hungary (1.1 %) and Slovenia (1.1 %).

Notified subsidies to railways[7] in 2011 amounted to € 32.3
billion[8],
or represent 0.25 % of EU GDP.

1.2.        Crisis aid

In respect of crisis-related aid granted to
the financial sector, recapitalisation and impaired asset relief stood at € 31.7
billion, or 0.25 % of EU GDP, and the overall volume of average
outstanding guarantees, including new guarantees, and liquidity measures
amounted to € 682.9 billion, representing 5.4 % of EU GDP. By 1
October 2012, all Member States except Bulgaria, Czech Republic, Estonia,
Malta, and Romania had had financial crisis measures approved by the
Commission.

The aid amount used under the temporary
framework amounted to € 4.8 billion in 2011, or 0.037 % of EU GDP.
All Member States except Cyprus had aid measures approved under the temporary
framework.

2.           Trends and patterns of
expenditure on non-crisis State aid in the Member States

Figure 1[9]:
Total State aid (non-crisis aid) as % of GDP (EU-27; data from 1992 onwards)

Overall, non-crisis State aid expenditure
has been on a long-term downward trend since the 1980s, when it stood at
approximately 2 % of EU
GDP. It fell to about 1 %
of EU GDP in the 1990s and decreased further to around 0.5 % of EU GDP after 2004[10], except in 2006. A moderate
increase was seen in 2008 and 2009, but in 2010 and 2011 the figure was again
around 0.5 % of EU GDP.

Over the short term, non-crisis State aid
expenditure has been roughly stable at a low level for many years, as is also
suggested by the underlying trends, 0.64 % of EU GDP in 2006-2008 to 0.58 % of EU GDP in 2009-2011. On the one hand, Member States appear to
have maintained their State aid discipline and increased non-crisis aid only in
some areas where a response to the financial and economic crisis was needed,
despite the fact that many Member States granted substantial aid amounts to the
financial sector. On the other hand, in 2011 in particular, many Member States
may have been forced to reduce aid volumes as a result of tougher budget
constraints, which does not exclude the possibility that expenditure may be
shifted into coming years or that expired aid measures may be reintroduced at a
later stage.

Due to the particular features of aid to
agriculture, fisheries and transport, the following sections on the levels and
orientation of non-crisis aid (2.1 and 2.2) only deal with aid to industry and
services.

2.1.        State
aid to industry and services

Looking at the trend, i.e. comparing aid
expenditure between the periods 2006-2008 and 2009-2011, a slight increase can
be seen for the period 2009-2011 when the aid volume amounted to € 60.0
billion or 0.48 % of EU GDP, whereas in the preceding period it stood at € 58.6
billion or 0.47 % of EU GDP. In the light of the reasons given above, it
would not be reasonable to conclude that a long-term increase in State aid can
already be observed or that the one‑off effect of 2009 is still
contributing to the overall increase in that period. In any event, it appears
more likely that the trend will reverse due to the lower expenditures in 2010
and 2011.

With regard to the lower aid expenditure on
industry and services in 2011, some Member States have cut back expenditure due
to budget constraints or may well stretch expenditure plans over more years to
maintain strict budget discipline. Lower sectoral aid granted in 2011
contributed to the decrease. Thus, more aid was earmarked for horizontal
objectives, in particular to give support to regional development, promote environmental
protection and continue investing in research and development. Overall, that
development indicates that Member States were able to respond flexibly to
economic constraints but also to changing economic needs.

Block-exempted aid[11] increased substantially in
2011. More generally, Member States continued to grant aid through schemes,
which indicates that they favoured such tools in order to give support to a
large number of enterprises without prior individual notification to the
Commission.

2.2.        State
aid for horizontal objectives of common interest

The concept of horizontal aid, which covers
aid not granted to specific sectors of the economy, derives from the Treaty on
the Functioning of the European Union (TFEU)[12].
It leaves room for the Commission to make policy choices under which State aid
can be considered compatible with the internal market in order to provide
effective support to common policy objectives.

As in previous years, the three main
objectives in 2011 for which Member States granted aid were: regional
development, safeguarding the environment including fostering energy saving and
promoting the use of renewable energies, and research, development and
innovation ('R&D&I'). Aid to SMEs and aid for creating of employment
and promoting training were less used by Member States.

Out of a total of € 52.9 billion, or
0.42 % of EU GDP granted to industry and services, 89.7 % of the aid
was earmarked for horizontal objectives. Regional aid amounted to € 14.0
billion, or 0.11 % of EU GDP, followed by environmental protection,
including energy saving, which stood at € 12.4 billion, representing 0.09 %
of EU GDP, and R&D&I aid, which amounted to € 10 billion, or 0.08 %
of EU GDP. Those three objectives accounted for approximately two-thirds of
total aid to industry and services.

The trend, with horizontal aid increasing
by approximately 0.2 % of EU GDP between the periods 2006-2008 and
2009-2011, shows that Member States have evidently been making efforts to
earmark aid for horizontal objectives over past years. In only a few Member
States has the level of horizontal aid been below 50 %.

Sectoral aid[13], which represented roughly
10.3 % of total aid granted to industry and services, amounting to € 5.5
billion, or 0.04 % of EU GDP, continued to decrease in 2011. Less aid was
granted to the coal sector and the manufacturing and non-manufacturing sectors.

3.           State aid granted to the
financial sector and support for the real economy

3.1.        State aid to the financial sector

3.1.1.     Context

The turmoil in the financial markets, which
continued in 2011, was triggered by the financial crisis in 2008 and called for
massive intervention by European governments to curb the adverse effects of the
shock. State aid to financial institutions was crucial for restoring confidence
in the financial sector and avoiding a systemic crisis.

In view of the worsening of the sovereign
debt crisis in mid 2011, the Member States and the Commission agreed on a
package of measures to strengthen banks' capital and provide guarantees for
their liabilities (the banking package)[14].

3.1.2.     Aid amounts approved and used between 1 October 2008 and
1 October 2012

Between 1 October 2008[15] and 1 October 2012, the
Commission approved aid to the financial sector totalling € 5058.9 billion
(40.3 % of EU GDP). The bulk of the aid was authorised in 2008 when € 3394
billion (27.7 % of EU GDP) was approved, mainly comprising guarantees on
banks’ bonds and deposits. After 2008, the aid approved focused more on
recapitalisation of banks and impaired asset relief rather than on guarantees,
while more recently a new wave of guarantee measures was approved mainly by
those countries experiencing an increase in their sovereign spreads, such as
Spain and Italy.

Between 2008[16] and 2011, the overall amount
of aid used amounted to € 1615.9 billion (12.8 % of EU GDP). Guarantees
accounted for the largest part amounting to roughly € 1084.8 billion
(8.6 % of EU GDP), followed by recapitalisation € 322.1 billion (2.5 %
of EU GDP), impaired assets € 119.9 (0.9 % of EU GDP) and liquidity measures
€ 89 billion (0.7 % of EU GDP).

3.1.3.     Aid amounts approved and used in 2011

In 2011, the Commission approved aid to the
financial sector amounting to € 274.4 billion (2 % of EU GDP). The
new aid approved was concentrated in a few countries and involved guarantees
for € 179.7 billion, liquidity measures for € 50.2 billion,
recapitalisations for € 38.1 billion and impaired asset relief for € 6.4
billion.

The overall volume of aid used in 2011
amounted to € 714.7 billion, or 5.7 % of EU GDP. Outstanding
guarantees stood at € 521.8 billion and new guarantees issues amounted to
€ 110.9 billion. Liquidity interventions amounted to € 43.7 billion
and new liquidity provided in 2011 stood at € 6.5 billion.
Recapitalisation amounted to € 31.7 billion. No aid was granted through
the authorised impaired assets measures.

3.2.        State aid to the real economy

3.2.1.     Context

In response to the tightening of access to
credit faced by companies as a result of the financial crisis, the Commission
adopted the temporary framework on 17 December 2008. The main goals were to
maintain continuity in company access to finance and to prepare the ground for
sustainable long‑term growth by encouraging investment. The temporary
framework introduced a number of new State aid instruments as well as temporary
adaptations of existing State aid frameworks. It was open to all sectors of the
economy. However, it excluded aid to remedy pre-existing structural problems,
so no aid was granted to companies that were in difficulty before the crisis.

The temporary framework was supposed to
expire at the end of 2010. However, in the light of the continuing high
volatility of financial markets, coupled with the uncertain economic outlook,
at the end of 2010 the Commission decided to prolong for one year most of the
measures set out in the temporary framework for one year under stricter
conditions[17],
except the possibility to grant a limited compatible aid amount of € 500 000
per company. The compatible limited amount
of aid (aid up to € 500 000 per company) was limited to beneficiaries that had submitted a complete
application no later than 31 December 2010 under a national aid scheme approved
by the Commission in accordance with the temporary framework and no later than
31 March 2011 for undertakings active in the primary production of agricultural
products.

3.2.2.     Amounts approved and used

In 2011, Member States implemented no new
aid measures (except a few for farmers) but requested the prolongation of some
existing measures[18].

From the entry into force of the temporary
framework until the end of 2011, the total approved volume authorised by the
Commission amounted to € 82.9 billion.

In 2011, the aid amount used under the
temporary framework stood at approximately € 4.8 billion or 0.037% of
EU GDP.

The main tool used by Member States was the
subsidised guarantees (€ 1.9 billion), followed by the maximum aid amount
of € 500 000 per company (€ 0.6 billion).

In total, the amount used by Member States
under the temporary framework amounted to roughly € 37.5 billion,
representing a take-up rate of 45 % in relation to the total approved aid
under the temporary framework.

For more details on aid granted under the
temporary framework, see chapter 3.2 of the SWD.

4.           Trends in State aid expenditure by type of aid measures

4.1.        Number of aid measures

Fewer new aid measures were introduced by
Member States in 2011. However, the proportion of aid granted under block
exemption or schemes and as individual aid remained fairly stable, with a
slight increase in ad hoc aid measures. National budget restrictions
were most likely the reason why Member States were reluctant to implement new
aid measures. The fewer new block-exempted aid measures can be explained by the
fact that Member States phased out measures implemented under the previous
specific block exemptions (SMEs, employment, training and regional aid). Given
that the General Block Exemption Regulation ('GBER')[19], introduced in August 2008,
allows for a wider scope in granting aid, e.g. more aid objectives, wider application
and, in some cases, more lenient conditions (depending on the individual
objective), Member States have needed fewer new block-exempted measures under
the GBER to replace previous block-exempted measures.

4.2.        Aid volume ‑ around 32.5% of aid to
industry and services is block-exempted

Block-exempted aid granted to industry and
services increased by roughly € 5 billion to € 17.2 billion in
2011, or 0.13 % of EU GDP, accounting for 32.5 % of total aid granted
to industry and services. Regional aid, aid to protect the environment and to
save energy and R&D&I aid were the main measures, whereas Member States
earmarked less aid for SMEs, training and employment.

5.           Enforcing the State aid rules

5.1.        Unlawful aid[20]

Between 2000 and 2011, the Commission
adopted 986 decisions on unlawful aid. Negative decisions on aid measures found
to be incompatible with the internal market represented 23 % of the cases[21] and entailed ordering the
Member State concerned to recover the illegally awarded aid. For some 3 %
of unlawful aid[22],
the Commission attached conditions to its decisions. That intervention rate is
roughly nine times higher than the rate of negative and conditional decisions
in notified cases. More than half of the interventions concerned measures
granting aid to industry and services, while less than a quarter were in the agricultural
sector. The remainder concerned fisheries, transport and coal.

5.2.        Recovery of aid

The total number of pending recovery cases
stood at 46 cases on 30 June 2012 (compared to 41 cases at the end of 2010).
The amount of illegal and incompatible aid recovered since 2000 also increased to
€ 13.5 billion by 30 June 2012 (compared to an outstanding amount of € 2.3 billion
still to be recovered). Thus, the percentage of illegal and incompatible aid
still to be recovered rose from 11.1 % in 2010 to around 14.4 % on 30
June 2012. In fisheries, five negative decisions were adopted by the Commission
in 2011, four of which include recovery of the aid. In agriculture, five
recovery decisions were adopted in 2011. Transport had no recovery decisions.

5.3.        Enforcement of State aid law: Cooperation with national
courts

As a follow-up to the Notice on the
Enforcement of State Aid Law by National Courts of 2009[23],
advocacy efforts have intensified: the Commission is actively involved in
financing training programmes for national judges following an annual call for
projects, and also sends trainers to teach at such workshops and conferences.
In February 2012, a dedicated one-day workshop, covering both antitrust and
State aid issues relevant for national courts, was organised by the Commission
in cooperation with the Association of European Competition Law Judges.

5.4.        Ex-post monitoring

Over the years, the architecture of State
aid control has evolved significantly. Today, roughly 88 % of aid granted
to industry and services is not individually examined by the Commission, but is
granted on the basis of previously approved aid schemes or under block
exemption. DG Competition monitors the way in which Member States apply
existing aid schemes. To further improve the effectiveness of that control, in
2011 DG Competition decided to enlarge the scope of the 2011/2012 monitoring
exercise significantly. Although investigation of a number of cases is still
on-going, there seems to be an overall increase in the number of problematic
cases. More than one‑third of the cases
monitored in 2011/2012 have raised problems of varying types and gravity
(non-notified modification of schemes, individual aid exceeding the maximum
thresholds, compatibility conditions not properly reflected in the national
legal basis etc.). Keeping in mind the possible bias introduced by the limited
number of cases monitored so far (compared to the great number of existing aid
schemes), the compliance rate seems to vary across the Member States and the different
types of aid. The Commission will systematically follow up all
irregularities. At the same time, Member States must step up their efforts to
better comply with State aid rules.

Commission Staff Working Document ‘Facts
and figures on State aid in the EU Member States’

[1]               Crisis aid is expressed by (i) the committed amount
of aid and (ii) the used amount of aid. The committed amount (pledged volume of
aid) represents the overall maximum amount of State aid measures adopted by
Member States and approved by the Commission. The used amount expresses the
actual volume of the aid measure implemented by a Member State. The methodology
used for calculating crisis aid is further explained in the Commission’s Staff
Working Paper. Non-crisis aid is normally expressed by the aid element and
total expenditure is expressed accordingly, both in absolute volume and in % of
GDP, in order to present comparable information.

[2]               Consolidated version of the Communication from the
Commission ‑ Temporary Community framework
for State aid measures to support access to finance in the current financial
and economic crisis; OJ
C 83, 7.4.2009, p. 1; as amended by OJ
C 261, 31.10.2009, p. 1, and OJ
C 303, 15.12.2009, p. 6. Prolongation of the temporary framework; OJ
C 6, 11.1.2011, p. 5.

[3]               See http://www.eftasurv.int/press--publications/scoreboards/state-aid-scoreboards/.

[4]               ‘EU’ means all Member States of the European Union.

[5]               Total non-crisis State aid comprises aid granted to
industry and services, coal, agriculture, fisheries and transport, but
excludes, due to lack of comparable data, subsidies to the railway sector and
aid in compensation for services of general economic interest. Amounts refer to
the aid element (or gross grant equivalent in the case of guarantees and loans)
contained in the State aid measure unless stated otherwise. For more details,
see the methodological notes included in the SWD.

[6]               Coal aid, as part of sectoral aid and thus coming
under industry and services, stood at € 2.3 billion, which represents 4.2 %
of total aid to industry and services.

[7]               The information on subsidies to railways differs in
scope and detail from that collected from Member States on aid granted to
industry and services in accordance with Annex III A of Commission Regulation
(EC) No 794/2004 (OJ L 140, 30.4.2004, p.1). Aggregation into a single State
aid total is thus not possible.

[8]               At the time of finalising this report, information on
subsidies to railways had not been submitted by Czech Republic, Italy,
Luxembourg, the Netherlands, Portugal, and Slovakia. Cyprus and Malta have no
railway operators.

[9]               Source: DG Competition; GDP figures: Eurostat.

[10]             See
previous Scoreboards for more about the reasons for the past decline in State
aid expenditure, which can found on DG Competition’s website:
http://ec.europa.eu/competition/state_aid/studies_reports/archive/scoreboard_arch.html.

[11]             For more details, see chapters 2.2.2.1 and 4 in the
SWD.

[12]             For instance, Article 107(3)(a) TFEU with respect to
regional aid, Article 107(3)(b) TFEU on the execution of an important project
of common European interest.

[13]             Rescue and restructuring aid is included in sectoral
aid.

[14]             ECOFIN Council conclusion, 8 November 2011.

[15]             Recapitalisation aid granted to Northern Rock in 2007
is included.

[16]             Recapitalisation aid granted to Northern Rock in 2007
is included.

[17]             Communication of the Commission Temporary Union
Framework for State aid measures to support access to finance in the current
financial and economic crisis; OJ C 6, 11.1.2011, p. 5.

[18]             For more details, see chapter 3.2 of the SWD.

[19]             Commission Regulation (EC) 800/2008; OJ L 214,
9.8.2008, p. 3.

[20]             Article 108(3) TFEU obliges Member States not only to notify
new State aid measures to the Commission prior to implementation but also to
refrain from putting them into effect until a final decision is adopted. When
either of those obligations is not respected, the State aid measure is
considered to be unlawful.

[21]             224 cases.

[22]             28 cases.

[23]             OJ C 85, 9.4.2009, p. 1.