11.5.90 Official Journal of the European Communities NoC 116/5 
STATE AID 
No C 19/89 (ex NN 109 and 110/88) 
(Federal Republic of Germany) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 116/04) 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties regarding aid which the Federal Republic of 
Germany has decided to grant to the schemes 
'Programm Zukunftstechnologien' and 'Technologie-
programm Wirtschaft'. 
In the following letter, the Commission informed the 
German Government of its decision to close the 
procedure initiated on 14 June 1989 (x). 
By letter dated 14 October 1988 the German 
Government notified to the Commission two R&D 
programmes of the Land Nordrhein-Westfalen: 
— Technologieprogramm Wirtschaft, 
— Programm Zukunftstechnologien. 
As these programmes had been implemented before their 
notification, they had to be qualified as non-notified, i.e. 
illegal aid schemes. 
The Commission's evaluation of the case led to the 
conclusion that the notification was partially incomplete 
because the German Government did not define the size 
of small and medium-sized enterprises. Furthermore, it 
was doubtful, whether the schemes could be regarded as 
being in line with the Community framework for State 
aids on R&D because they forecasted aid intensity rates 
between 20 and 30 % for investments concerning the 
construction of production facilities. 
The Commission had therefore asked for further infor­
mation on these aspects. 
As the German authorities had not submitted this infor­
mation and since a final decision could not be taken 
without it, the Commission decided on 14 June 1989 to 
initiate the procedure laid down in Article 93 (2) of the 
EEC Treaty. 
The German Government was informed of this decision 
by letter SG(89)D/8399 of 26 June 1989. The other 
Member States were informed by letter SG(89)D13311 
dated 23 October 1989. Third parties were informed by 
means of a publication in the Official Journal of the 
European Communities No C 272 of 25 October 1989, 
page 5. 
(') OJ No C 272, 25. 10. 1989, p. 5. By verbal notes dated 11 September, 26 September, 9 
November and 8 December 1989, the German 
Government submitted the required supplementary infor­
mation on the schemes. 
Other Member States or other parties concerned did not 
submit any comments within the deadlines. 
The schemes at issue aim at encouraging R&D activities 
in the following industrial sectors: 
— manufacturing industry, 
— construction sector, 
— trade and commerce, 
— services (without transport), 
— liberal professions. 
Whilst 'Technologieprogramm Wirtschaft' supports 
R&D projects of high technological and financial risks, 
which might reach a commercially exploitable stage in 
the medium term, the programme 'Zukunftstechno­
logien' is more orientated to the solution of basic or 
fundamental scientific questions. 
The budget appropriated for 'Technologieprogramm 
Wirtschaft' amounts to ECU 26 500 000 in 1989 and to 
ECU 25 300 000 in 1990. 'Programm Zukunftstechno­
logien' carries a budget of ECU 28 million in 1989 and 
ECU 24 600 000 in 1990. 
Under both programmes, which are regulated by the 
same guidelines, aid will be given in the form of direct 
grants. 
When notifying the first version, the guidelines of the 
scheme provided for aid intensity rates varying between 
20 and 50 % of the gross project costs. A clear differen­
tiation between applied and basic research — as defined 
in the Community framework on State aids — was not 
given by the guidelines of the schemes. For example, the 
guidelines forecasted intensity rates of up to 40 % for 
R&D projects executed in small and medium-sized firms 
without clearly defining either the stage of research or 
the size of the enterprise. Furthermore they gave the 
possibility to grant aid intensity rates between 20 and 
30 % for investments concerning the contruction of 
production facilities (point 5.4.2 of the guidelines). 
No C 116/6 Official Journal of the European Communities 11. 5. 90 
By verbal note dated 26 September 1989, the German 
Government informed the Commission that the 
Government of the Land Nordrhein-Westfalen had 
modified the conditions of the schemes at issue. R&D 
projects which have to be qualified as applied research 
will now be aided at a level of 25 % whilst basic 
industrial research will be supported at intensity rates of 
50 %. The German authorities have also made clear that 
aid intensity rates of up to 40 % of the gross project 
costs for applied R&D activities will only be accorded to 
firms in which the yearly average number of employees 
will not exceed 150 persons, and there would be no more 
aid for the construction of production facilities. 
In cases where aided firms are located in assisted areas, 
the German authorities proposed to raise the aid 
intensity rate granted by the present schemes by up to 5 
or 10 %. They also undertook to limit the budget means 
reserved for this purpose to at most 5 % of the whole 
budget. 
As the abovementioned R&D activities are designed for 
application by industry and commerce, the Commission 
has examined the schemes with regard to the provisions 
of Article 92 of the EEC Treaty and in particular on the 
basis of the criteria laid down in the Community 
framework for State aids for R&D. 
The Commission takes the view that, in line with the 
Community framework, the present programmes aim at 
inducing firms to make investments in R&D projects 
which otherwise, because of the costs and the risks 
involved, would not take place. 
As to the intensity of the aid, it appears that the level of 
50 % for basic industrial research and a level of 25 % 
for applied research is acceptable in terms of intra-EEC 
competition. 
Aid intensity levels higher than 25 % for applied 
industrial R&D can only by granted in cases where 
particular projects are recognized to be 'of special 
economic importance, linked to relevant Community 
projects or programmes, located in the least-favoured 
areas of the Community, related to specific welfare 
services or which imply a very high specific risk. Special 
allowances can also be made for aids directed genuinely 
at smaller and medium-sized enterprises.' (R&D 
guidelines, point 5.4.) 
Having regard to the fact that the present schemes aim 
at encouraging R&D activities which imply high 
financial and technological risks and taking into 
consideration that only firms in which the yearly average 
number of employees does not exceed 150 persons can 
apply for extra support, an intensity level of up to 40 % 
for applied research can also be accepted by the 
Commission. Following the abovementioned criteria, it is also 
acceptable that enterprises which are situated in assisted 
areas may apply for a supplementary support. This 
support, which cannot be cumulated with the abovemen­
tioned possibilities, would be up to 5 % in the Land's 
assisted areas and up to 10 % gross in the Joint Task 
areas and would be applied to a basic level of 20 %, so 
that the effective aid intensity rate should normally be up 
to 25 % and would in any case not exceed 30 % of the 
cost of the subsidized projects. Further cumulation is 
excluded in these areas. The budget allocated to this 
particular support would be between 3 and 5 % of the 
entire budget of the scheme. 
Taking into consideration these elements, the 
Commission takes the view that the modified versions of 
the R&D schemes of the Land Nordrhein-Westfalen do 
not adversely affect trading conditions between Member 
States to an extent contrary to the common interest. It 
has therefore established that the conditions laid down in 
Article 92 (3) (c) of the EEC Treaty are fulfilled. 
The Commission has therefore decided to close the 
procedure pursuant to Article 93 (2) of the EEC Treaty 
in respect of the abovementioned schemes. 
Nevertheless, the Commission requests the German 
Government to submit annual reports on the application 
of the schemes. These reports should include information 
about all cases in which small and medium-sized enter­
prises are supported and in which regional aspects have 
led to a raise of the basic intensity level. As needed, the 
Commission could then propose appropriate measures to 
the German Government in application of Article 93 (1) 
of the EEC Treaty. The Commission also requests the 
German Government to submit a sample of the 
guidelines of the schemes including the modifications 
announced in the verbal note of 26 September 1989, 
when putting them into application. 
Furthermore, the Commission would remind the German 
Government of its obligation to notify all individual 
projects under the schemes where the total cost exceeds 
ECU 20 million. 
Finally the Commission would remind the German 
Government that the aid scheme was not notified in 
accordance with the provisions of Article 93 (3) of the 
EEC Treaty and would request that appropriate 
measures be taken in order to avoid such infringements 
of procedural rules in future. 
The other Member- States and other parties concerned 
will be informed of this decision by publication of this 
letter in the Official Journal of the European Communities.