OfficialJournaloftheEuropeanCommunities 57
4.11.71 OfficialJournaloftheEuropeanCommunities No111/1
FIRSTRESOLUTION
of20October1971
oftheRepresentatives oftheGovernmentsoftheMemberStates,meetingwithintheCouncil,
ongeneralsystemsofregionalaid
Thisceiling,initiallyfixedat20asanetsubsidy­
equivalent,shallenterintoforceon1January1972.
Itshallapplytoallregionalaidgrantedforaparti­
cularinvestmentproject.Attheendof1973,the
levelofthisceilingwillbereviewed,takingaccount
ofexperiencegainedandofadaptationsofexisting
systemsofaidtomakethemmoretransparent,and
inrelationtotheproblemofcumulationofregional
aidandsectorialaid;theMemberStatesrecordthe
importancetheyattachtotheexamination ,between
nowandthen,oftherelationshipbetweenthelevel
ofaidgrantedandthenumberofjobscreated.
Derogationsfromthisceilingmaybepermittedon
priorcommunication oftherelevantgroundsaccord­
ingtotheprocedurelaiddowninArticle93ofthe
TreatyestablishingtheEuropeanEconomicCommu­
nity.TheCommissionshallinformtheCouncilper­
iodicallyofthesederogationsfromtheceiling.
4.Anessentialconditionforensuringthecoordination
andassessmentofgeneralsystemsofaidisthetran­
sparencyoftheaidandthesystems.
ThisinvolvestheMemberStatesinthefollowing
obligations :
(a)achievementoftransparencyofaidandsystems
duringthetransitionalperiod:
-ceasingtointroducefurtheropaqueaids;
-adaptingtheexistingsystemstowardsrealtran­
sparencywhenamendingorrenewingthese
systems;
-eliminationofaidstheopacityofwhichcannot
betosomeextentremediedbeforetheendofthe
transitionalperiod;
(b)actualapplication,from1January1972,ofthe
ceilingtoallaidgrantedtoaninvestorforagiven
investment .
5.Asfarasregionalspecificityisconcerned,thefollow­
ingprinciplesmusteffectivelybeobserved:
-Regionalaidsmustnotcoverthewholeofthe
nationalterritory(withtheexceptionofthe
GrandDuchyofLuxembourg ,whichisconsidered
asasingleregion),thatistosay,generalaidsshallTHEREPRESENTATIVES OFTHEGOVERNMENTS OF
THEMEMBERSTATES,MEETINGINTHECOUNCIL ,
Consideringthatregionalaid,whenitisadequateand
judiciouslyapplied,formsoneoftheessentialinstru­
mentsofregionaldevelopmentandenablestheMember
Statestofollowregionalpoliciesaimedatamorebal­
ancedgrowthbetweenthevariousregionsofthesame
countryandoftheCommunity ;
Awarethattherisksofoutbiddingwhichexistsinres­
pectofregionalaidrequirethatafirstseriesofcoordi­
natingmeasuresintendedtolimitthoserisksbeevolved
withoutdelay: -
HavingnotedtheCommunication of23June1971
fromtheCommissiononthecoordinationofgeneralsys­
temsofregionalaid;
Undertakeinconsequencetocomplywiththefollowing
principlesinrespectofsystemsofregionalaid,accord­
ingtotheprocedureforapplicationannexedtothis
Resolution :
1.Coordinationshallbecarriedoutgradually.
Itshallbeimplementedfirstofallinthemosthighly
industrialized regionsoftheCommunity(the'central
regions');appropriatesolutions,whichwillbebased
ontheprinciplessetoutinthisResolutionandwhich
willtakeaccountofthespecificproblemsoccurringin
eachoftheperipheralregionswillbepreparedfor
theseregionswithoutdelay.
Furthermore ,inthecentralregions,implementation of
alltherequiredconditionsshalltakeplacegradually
overaone-yeartransitionalperiodbeginning1Janu­
ary1972.
2.Coordination isconstitutedbyfourprincipalaspects
formingawhole:asingleceilingforaidintensity;
transparency ;regionalspecificity;andthesectorial
repercussionsofregionalaid.
3.Thesingleceilingforaidintensityshallbefixedasa
netsubsidy-equivalent calculatedaccordingtothe
commonmethodofaidassessment(describedinpoint
5oftheprocedureofapplication);thetendency
shouldbe,asfaraspossible,tolowerthelevelofaid
inthecentralregions.

58 OfficialJournaloftheEuropeanCommunities
notbegrantedundertheheadingofaidforregional
development ;
-Thegeneralsystemsofaidmustclearlydefine
eithergeographically orbyquantitativecriteria,
theboundariesoftheregionsor,withinthelatter,
theboundariesoftheareasbenefitingfromaid;
-Exceptinthecaseofpolesofdevelopment ,regional
aidsmustnotbegrantedinapinpointmanner,i.e.
toisolatedgeographicalpointshavingpractically
noinfluenceonthedevelopmentofaregion;
-Whereproblemsofvaryingnature,intensityand-
urgencyoccur,theintensityofaidmustbevaried
accordingly ;
-Thegraduationandvariationofratesofaidac­
cordingtothedifferentareasandregionsmustbe
clearlyshown.
6.Thelackofsectorialspecificityingeneralsystemsof
regionalaidmakesitdifficulttoassessthembecause
oftheproblemsthatthesectorialrepercussionsofthisaidmayraiseatCommunitylevel.Consequently ,the
MemberStatestogetherwiththeCommission will
evolveaproceduretoenableassessmentofthesec­
torialeffectsofregionalaids.
Independently ofthedevelopmentofthisprocedure,
thedoublecumulationofaids,i.e.applyingsimulta­
neouslytoasectorialorregionalproblemregional
aidsandsectorialaidswhichoverlap,isforbidden.
7.TheCommissionshallsupervisetheapplicationofthe
principlesofcoordinationofgeneralsystemsofre­
gionalaidbymeansofthepostfactonotification
whichitwillreceiveofsignificantcasesofapplica­
tion.accordingtoaprocedureensuringbusinessse­
crecy.
8.Theresultsofapplicationwillbeexaminedperiod­
icallywiththeseniornationalofficialsresponsiblefor
aid.TheCommissionwillmakeanannualreportto
theCouncilandtotheotherCommunityauthorities
concerned .
ANNEX
Procedureforapplicationoftheprinciplesofcoordinationofgeneralsystemsofregionalaid
1.Gradualimplementation Theterritoriesreferredtoasthe'Mezzogiorno'arethose
namedinArticle 1oftheConsolidated LawsontheMezzo­
giorno(DecreeofthePresidentoftheRepublicNo1523of30
June1967,ItalianOfficialGazetteNo159of24June1968).
3.AspectscoveredbycoordinationGradualimplementation concernsinthefirstplacetheterrito­
rialfieldofapplication .Sinceoneoftheobjectivesofthecoor­
dinationandadaptationofgeneralsystemsofregionalaidisto
pur.anendtotheoutbiddingbetweenMemberStatesinorder
toattractinvestmentstotheirrespectiveterritories,thesolution
advocatedwillfirstofallhavetobeappliedintheregions
wheretheeffectsofthisoutbiddingaremostfelt,inparticular
oncompetitionandtrade,thatistosayintheindustrialized
regionsandintheregionsoneithersideofthefrontiersofthe
MemberStates.Theseregionsarehereinafterreferredtoas
'centralregions'oftheCommunity .
Fortheotherregions,referredtoas'peripheralregions',an
appropriatesolutionbasedonthesameprincipleswillbe
wo~kedoutintheverynearfuture,takingaccountofthespeci­
ficproblemsarisingineachoftheseperipheralregions.
Moreover,eveninthecentralregions,theimplementation ofall
thenecessaryconditionscanonlybegradual.Provisionhas
thereforebeenmadeforatransitionalperiod.Thisperiodshall
runforoneyearfromthedateofimplementation ofthecoordi­
nation,thatistosay,from1January1972.Coordination andadaptationofthegeneralsystemsofaid
shallhavefourbasicaspects:asingleceilingfortheintensity
ofaid;thetransparencyofaid;regionalspecificity;andsec­
torialrepercussions .
Thesefouraspectsaresocloselyrelatedthattheyforma
whole.Anagreementinprinciplehasbeenreachedonallthese
aspects,althoughtheimplementation ofallthenecessarycon­
ditionscantakeplaceonlygradually.
Asregardssomeoftheseconditions-reducingtheopacityof
certainformsofaidandthesectorialrepercussions ofaid—
technicalworkisstillinprogress.Nevertheless ,theresultsob­
tainedsofarmakeitpossibletobegintoapplytheprinciplesof
coordinationfrom1January1972;theremainingconditions
willhavetobefulfilledassoonaspossiblethereafterandatthe
latestbytheendoftheone-yeartransitionalperiod.
2.Demarcationofthecentralregions
ThecentralregionscomprisethewholeoftheCommunityex­
cludingBerlinandthe'Zonenrandgebiet ',thepartofthe
Frenchterritoryatpresentreceivingdevelopmentsubsidiesand
the'Mezzogiorno'.
The'Zonenrandgebiet 'isdefinedbytheAnnextoparagraph9
oftheGermanlawonthedevelopmentofthe'Zonenrandge­
biet'('GesetzzurForderungdesZonenrandgebiets of5August
1971,Bundesgesetzblatt I,p.1237).
TheIndustrialDevelopmentSubsidy(PDI)areainFranceis
definedbyDecreeNo69-285of21March1969andtheOrder
of21March1969(JORFof30March1969),supplementedby
DecreeNo70-386of27April1970(JORFof10May1970).4.Thesingleceilingforaidintensity
Theaimofthesingleceilingfortheintensityofaidwhich
MemberStatesagreetorespectwhengivingregionalaidsbene­
fitingasingleinvestorinrespectofanygiveninvestmentinthe
centralregions'definedinparagraph2istoputanendtoout­
biddinginthematterofaids.
Thissingleceilingwhich,duringthefirststage,doesnotneces­
sarilyinvolveanychangesinthegeneralsystemsofaid,shall
takeaccountofallregionalaidsreceived.Similarly,itmustnot
leadthoseMemberStateswhosepresentaidsystemsdonot
reachthisceilingtoincreasepresentaids.
Inviewoftheresultsoftheapplicationofthecommonassess­
mentmethodtotheprincipalsystemsofaidinforceinthecen­
tralregions,theleveloftheceilingshallbefixedinitiallyat

OfficialJournaloftheEuropeanCommunities 59
TheoutlinepresentationofthemethodofassessingStateaid,
workedoutinthecourseofseveralmultilateralmeetingswith
nationalexpertsandapprovedon18December1970bythe
Headsofthenationalauthorities,doesnomorethanindicate
thebasicdefinitionsandthesimplificationconventionsdecided
uponatatechnicallevel,withoutconsideringindetailthe
problemswhichhavehadtobeanalysedinordertoarriveat
theseresults.
Thebasicdefinitionsandtheconventionsareasfollows:
(a)Thesinglemeasurementcriterionistherelationshipbet­
weentheamountofaidandtheamountofinvestment,ex­
pressedasapercentage.
(b)Transparentor'measurable'aidisaidwhichisbasedon
investmentandforwhichtherelationshiptotheamountof
thatinvestmentmaybeexpressedasapercentage.
(c)Thestandardbasisforgrantingaidinvolvesthreecatego­
riesofcapitalexpenditure;land,buildingsandplant1.
Theapplicationofthismethodthusinvolvesadjustments
ofthestandardbasisdependingonwhetheraidisgranted
onlyforapartofthesecategoriesorforadditionalexpendi­
ture.Inthelattercase,thetransparencyoftheaiddepends
onknowingitssizeinrelationtothestandardbasis.
(d)Breakdownofthestandardbasisforaid:
thenationalexpertshaveadoptedthefollowingbreakdown 2:20%innetsubsidy-equivalent ,calculatedaccordingtothe
commonmethodofassessingaid.
Thislevelcannotbefixedonceandforall.Thetendency
shouldbeasfaraspossibletoreducethelevelofaidinthecen­
tralregions.Moreover,caremustbetakentoensurethatthe
ceilingchoseneffectivelycorrespondstotheneedsandprob­
lemsoftheareasreceivingaidinthosecentralregions.Thus,
whiletheintroductionofasingleceilingfortheintensityofaid
constitutesaprinciple,thechoiceofthelevelofthatceiling
mustremainaproceduraldetailfortheapplicationofthat
principle.Thiswillprovidethenecessaryflexibilitywithwhich
towork.
Thefixingofasingleceilingdoesnot,however,meanthatthe
grantingofaidisjustifiedinallareasofthecentralregions.
Aidmayonlybegrantedtoregions-or,withintheregions,to
clearlydefinedareas-wherethesocio-economic situationjus­
tifiesit.Belowthisceiling,whichconstitutesanupperlimit,the
MemberStateswillcontinuetovarytheintensityoftheirre­
gionalaidinlinewiththesocio-economic featuresofthere­
gionsconcerned(see'Regionalspecificity'underparagraph7)
and,whereappropriate,withthesituationinthevarioussec­
tors.Derogationfromthisceilingmaybepermittedonprior
communication oftherelevantgroundstotheCommission .On
thebasisofthatcommunication ,whichmaydealeitherwith
individualcasesorwithparticularorurgentproblemsarising
inanarea,theCommissionshalltakeadecision.TheCommis­
sionshallperiodicallyinformtheCouncilofthesederogations
fromtheceiling.
S.ThecommonmethodofassessingaidLandBuildings Plant
Germany 5 30 65
Belgium 5 40 55
France 5 50 45
Italy 5 30 65
Luxembourg 5 50 45
Netherlands 5 40 55Theworkdonehasmadeitpossibletodrawupacommon
methodforassessingandcomparingaid.
Itshouldbestressed,however,thatthisisamethodofcompa­
risonandnotofaccounting.Itfacilitatesthecomparisonof
aidswithinthesamesystemandbetweenthedifferentsystems
ofaidoftheMemberStates,takingintoconsideration the
theoreticalmaximumwhichmaybegrantedThetheoretical
maximummaybeverydifferentfromtheactualamountofaid
grantedinagivencase.
Themethodisbasedonasinglemeasurementcriterion,namely
.therelativesizeoftheaidinrelationtotheamountofthein­
vestment,thissizebeingexpressedasapercentage.This
methodmakesitpossibletoclassifytheprincipalformsand
methodsofaidintothreecategories:transparentormeasurable
aid;aidwhichissemi-transparent orassessable(heretheas­
sessmentinvolvesassumptionswhichsometimesintroduceinto
thecalculationsaverywidemarginofuncertainty);and
opaqueaidtowhichthemethodisnotapplicable.Inthelast
categoryafurtherdistinctionmustbemadebetweenopaque
aidwhichcantosomeextentbemadetransparentandthose
whichcannotbe.
Thesecalculationsarebasedonaidaltertax,thatistosay,the
beneficiary'snetsubsidy-equivalent afterpaymentoftaxeson
profits,assumingthatinitsfirstyearofoperationtheunder­
takingmakessuchprofitsthatthemaximumtaxischargeable.
Thismeansthatthelevelsofintensityofaidresultingfromthe
applicationofthismethodfallwellbelowthefigureshitherto
usuallyquotedinthecontextofregionalaid.
Theapplicationofthecommonassessmentmethodtotheprin­
cipalgeneralsystemsofregionalaidgrantedinthecentralre­
gionsofthecommonmarketgivesthefollowingtheoretical
maximumintensitiesfortransparentandsemi-transparent aid
alone:(e)Thedateofpaymentisthesameforallkindsofaid3.No
accountistakenofthedifferencebetweenthedateordates
ofpaymentandthedatewhenthedecisiontograntitwas
.taken.Loansatreducedratesorwithrebatesofinterestare
alignedonthedateofsubsidiesbymeansofacalculation
adjustingthemtocurrentvalues.
(0Therateofadjustmenttocurrentvaluesusedforthecalcu­
lationshasbeenfixedat8%.
(g)Theproblemofdifferenttaxarrangementsappliedtoaid
withinthesamegeneralsystem,accordingtothedifferent
formsofaid,andbetweendifferentgeneralsystemsofre­
gionalaidoftheMemberStates,forthesameformofaid,
shallbesolvedbyadoptingtheformulaofthenetresult
aftertax,expressedassubsidy-equivalent ,ofaidactually
remainingtothebeneficiary.Thisassumes4thatthe
undertakingmakesaprofitfromtheoutsetandthatatthe
endofthefirstfinancialyeartheprofitsaresufficientto
paythemaximumtaxesleviedontheaid.
(h)Factorsinthecalculationasappliedtoloansatreduced
ratesorwithrebatesofinterestareasfollows:
—Theproportion:percentageofthecapitalexpenditure ,
takingaccountofthestandardbasis,coveredbythe
loan.
—Thetermoftheloan.
—Thetermoftherepaymentfreeperiod.
—Theextentoftheinterestraterebate.
1Thisconventioninvolvesagreaterorlessermarginofapproximation accord­
ingtowhichitemsareincludedinthethreecategoriesofexpenditure .
2Thesebreakdownsareonlyveryroughaverages .Onthispointthereforethe
methoddepartsfromtheprincipleofconsideringonlythetheoreticalmaxi­
mumofaids.
1Thissimplificationalsointroducesamarginofapproximation ,butwithaten
dencytoincreasetheintensity.
4This-assumptionreducestheintensityofaidinrealtermssinceinpracticeit
wouldhardlyeverbetrue.Anupdertakingmakingalossorbreakingevendur­
ingtheinitialyearswouldretainaconsiderablylargerproportionoftheaid.Germany 18-1%
Belgium 16-5%
France 24-7%
Italy 26-7%
Luxembourg 17-3%
Netherlands 19-8%

60 OfficialJournaloftheEuropeanCommunities
Thetextsoflaws,Regulationsoradministrative provisions
submittedtotheCommissionmustcontainthisinforma­
tionforthesystemofaidtobetransparent.
(i)Thereferencerateisthereferencerateusedbythepublic
authoritiesforthepaymentofsubsidiestothecreditinsti­
tutions.Ifthereisnosuchrate,theaveragerateofinterest
inthemarketconcernedistakenintoconsideration .When
aidofthistypeisincreasedunderdepressedeconomiccon­
ditions,aratewhichcorrespondstosuchconditionsis
chosen.
0")Transparentfiscalaidisthatwhichfulfilsthefollowing
conditions :
-Thetaxleviedaccordingtoastandardoramaximum
ratemustbebasedonanamountinvestedintheregion.
-Inaddition,theaidmustbedeterminablebyapropor­
tionoftherateoftaxandbegrantedforaspecified
term.
However,allfiscalaidmaybemadetransparentbyfixing
aceilingexpressedasapercentageoftheinvestment.
6.Thetransparencyofaidisoftengrantedtoallindustrialsectorswithoutdistinction.
Nevertheless ,itisinthegoodsandservicessectorsthattheef­
fectsofaidoncompetitionandtradearefelt.Itishoweverdif­
ficulttoassesstheseeffectsintheabsenceofanysectorialspe­
cificityinregionalaid.
BecauseoftheproblemstheymightcauseatCommunitylevel
andtosolvethisdifficulty,aproceduremustbeworkedoutto
enabletheseeffectsonvarioussectorstobegrasped.
Expertsareatpresentworkingonthismatterandvarioussolu­
tionsarebeingexamined.Itishoweverrecognizedthatcoordi­
nationofregionalaidcanbegintobeappliedwithoutwaiting
fortheresultsofthiswork,onconditionthatthebanondouble
cumulation(seepoint6ofthe'Principlesofcoordination')is
observed,sincetheCommissioncanusetheprocedurelaid
downinArticle93(2)oftheTreatyestablishingtheEuropean
EconomicCommunityshouldtheneedarise,particularly
wheretheapplicationofgeneralsystemsofaidgivesriseto
well-foundedcomplaintsfromaMemberState.
Independently ofthiswork,maximumattentionshouldbe
devotedtothesectorialaspectsoftheinformationonaidtobe
suppliedtotheCommissionbytheMemberStates.Inthisres­
pect,itshouldberecalledthat:
-provisionsormeasurestodirectregionalaidtowardscertain
sectorsmust,sincetheyareconstituentelementsofthesys­
temsofaid,bethesubject,inthesamewayastheother
provisions,ofthepriornotificationwhich,inaccordance
withArticle93(3)oftheTreaty,mustbemadeingoodtime
totheCommission :itisimmaterialwhetherthenecessary
informationistakendirectlyfromthegeneralsystemofaid
orwhetherreferenceismadeonlytonationalorregional
developmentplans;thelegalform(statutoryprovisionsor
administrative circulars)andthelegalcharacter(binding
provisionsormerelyguidelines)ofsuchprovisionsarealso
irrelevant;
-whereasystemofregionalaidhasmixedobjectives,both
regionalandsectorial,itisessentialthatthesystembenoti­
fiedassuchtotheCommission ,pursuanttoArticle93(3)
oftheTreaty,sothatitmaybeassessedfromboththere­
gionalandthesectorialangles;^
-'SectorizecFstatisticalinformationontheapplicationof
generalsystemsofregionalaidshall,likeanyotherinfor­
mationonthesesystems,formpartoftheinformationtobe
communicated regularlybytheMemberStatestothe
Commissioninorderthatitmay,togetherwiththoseStates,
keepunderconstantreviewthesystemsofaidasprovidedin
Article93(1)oftheTreaty.
Atechniqueiscurrentlybeingworkedouttodealwiththepost
factostatisticalexaminationoftherepercussionsofregional
aidonthevarioussectors(homogeneityofdata,intervalsat
whichitistobecollected).
9.Sincetheimplementation ofthecoordinationandadapta­
tionofsystemsofregionalaidisgradual,somesupervisionis
requirednotonlytoensurethatitisgradualbutalsotobeable
toassesstheeffectiveresultsofthiscoordinationand,ifap­
propriate,toroundofforsupplementtheprocedureofappli­
cation.
ThissupervisionshallbeexercisedbytheCommissionby
meansofthepostfactonotificationwhichitwillreceiveofsig­
nificantcasesofapplication,underaprocedureensuringbusi­
nesssecrecy,whichwillbedrawnupwiththecooperationof
expertsfromtheMemberStates.
Theresultsoftheapplicationoftheprinciplesofcoordination
willbeexaminedperiodicallywiththeseniornationalofficials
responsibleforaid.TheCommissionwillmakeanannualre­
porttotheCouncil.Therequirementthataidbetransparentconstitutesanessential
conditionforthecoordinationandassessmentofthesystemsof
aid.Inrelationtothecommonmethodofassessment,thecon­
ceptoftransparencyisdefinedasfollows:
-Aidistransparentor'measurable'whenthecommon
methodofassessmentofaidcanbeappliedtoit.
-Asystemofaidistransparentwhen,foreveryformofaid
whichitprovidesfor,itcontainsalltheinformationneeded
toapplythecommonmethodofassessmenttoeachformof
aid;andwhenthecriteriaforvaryingtheamountofaidand
theconditionsconcerningcumulationofaidareclearlyspe­
cified.
Thegeneralsystemsofaidatpresentinforce.donotyetfulfil
theseconditions.Acertainperiodoftimewillberequiredfor
this.Expertsareatpresentworkingontheproblemofopaque
aid.
Itishoweverrecognizedthataidcanbegraduallycoordinated
withoutwaitingfortheoutcomeofthiswork,onconditionthat
tieMemberStatesundertaketheobligationssetoutinpoint4
ofthe'Principlesofcoordination'.
7.Regionalspecificity
Thisisthevariationofaidintensityaccordingtothenature,
intensityandurgencyoftheproblemsofregionaldevelopment
whichthepublicauthoritiesintendtosolve.
Sincetheconceptofregionalspecificityisdirectlylinkedwith
theestablishment ofaCommunityregionalpolicy,norule
morespecificthantheprovisionsoftheTreatycan,inthepre­
sentcircumstances ,determinethoseCommunityregionswhere
thegrantingofaidisjustifiedinvaryingdegreesandthose
whereitisnot
Theworktobecarriedoutontheparticularaspectsofeach
regionbytheRegionalDevelopmentCommitteewillfacilitate
thisassessment .
PursuanttotheTreaty,theCommissionshallensurethatthe
principlessetoutinpoint5ofthe'Principlesofcoordination'
areeffectivelyandgraduallyobserved.
8.Repercussions ondifferentsectors
Thelackofsectorialspecificityisabasicfeatureofmostofthe
generalsystemsofregionalaid,duetothefactthatregionalaid