ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)21
Vol.1979/0009

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)21 final .
Brussels .1February 1979
LIST OFDEROGATIONS FROM THE CEILINGS SPECIFIED
INTHE PRINCIPLES OFCOORDINATION
OFGENERAL REGIONAL AID SYSTEMS
Communication ofthe Commission tothe Council
COM(79 )21finad .

List ofderogations from theceilings specified inthe
Principles ofCoordination ofGeneral Regional AidSystems
(Communication oftheCommission totheCouncil )
Introduction
Inthecommunication oftheCommission totheCouncil of26February 1975
(COK(75)77 final )onGeneral Regional AidSystems ,ceilings fortheintensity
ofaids that could begiven intheregions oftheCommunity were setout in
point 3ofthePrinciples ofCoordination .Atthesame time itwasstated
that derogations from theintensity ceilings expressed innetgrant equivalent
ofinvestment could beaccepted bytheCommission provided that thenecessary
justification wascommunicated inadvance inaccoz^dance with theprocedure
provided for atarticle 93oftheTreaty establishing theEuropean Economic
Community .TheCommission undertook tosupply theCouncil with alist ofany
derogations .
Sixsuch derogations have been made bytheCommission upto31December 1978 .
Thelist given below will describe these derogations andgive briefly the
reasons fortheir being granted .
List ofthedérogations
1.Byletter of20Kay1975 (S/75/O25435 )theCommission informed theUnited
Kingdom ofitsdecision nottooppose theapplication oftheaid schcir .e
operated bytheHighlands andIslands Development Board (HIDB ).The
ceiling forthearea assisted bytheHIDB was3Cifonetgrant .equivalent
ofinvestment .Thescheme operated bytheHIDB isthat additional aid
canbegiven ontopoftheRegional Development Grant available in
Development Areas intheform ofspecial grants ,interest relief grants ,
loans etc.Where these supplementary aids aregiven ,further Selective
Financial Assistance from other sources isnotavailable .Thespecial
grant plus loan cannot exceed £200.000 (300.000 EUA)foranyoneinvest­
ment .Thespecial grant cannot exceed 20$&offixed investment except in
cases where thisresults ingrant ofless than£20.000 (30.000 EUA)in
which case thegrant canreach 5(#offixed investment .

Inmakingthedecisiontogiveaderogation,theCommissiontookinto
accountseveralfactors.Thesocio-economic situationoftheregion
assistedbytheHIDBwascharacterized byadeclineoveralongperiod
oftotalpopulationandaneconomicoverdependence ontheprimaryand
tertiarysectors.Theregionhadaverylowproportionofindustrial
employment.FurthermoretheaidgrantedbytheHIDBwassmallinabsolute
termsandlimitedtorelativelysmall-scaleprojects.However,because
thisareawouldbenefitfavourablyfromtheeffectsoftheexploitation
ofoilfieldsintheNorthSea,theCommission ,feltitshouldbeinformed
oftheaidpolicypursuedwithregardtothedevelopment oftheregion.
Thiswastobeprovidedforbyanannualreport.
/
Byaletterof19April1978(SG(78)4793)theCommissionagreedto
furtherchangestotheaidschemeoperatedbytheHIDB.Thesechanges
meantthatthetotalamountofspecialgrantandloancouldgoupto
£400.000(600.000.EUA)andthespecialgrantitselfto£30.000(45*000
EQA).Thesoftloan(orinterestreliefgrantequivalent)couldnowbe-
upto3yearsinterestfreeinsteadof2yearsasformerly,withthe
remaining4yearsat3%pointsreductionremainingunchanged.These
changesmeantthatthethresholdmaximumforfemallinvestments remained
almostunchangedat78$ngebuttheaidformedium-sizedprojectswas
increasedappreciably.
Onreexaminingthesocio-economic situation,itwasshownthatunemployment
wasstillhighwithlargesectoralvariationsandtheeconomywasstill
overdependent onprimaryandtertiarysectors(mostlyagricultureand
tourism)withmanufacturing only16%ofthetotalemployment.However,
eventhoughtheregionwasstillamongstoneoftheworstofthe2>Ofo
zonesintheCommunity,ithadimprovedrelativelyinrelationtoboth
ScotlandandtheUK.NeverthelessthisWasnotauniformposition
throughouttheregionsincetherelativeimprovement wasseenmostin
theareasbenefitingfromNorthSeaoilactivity.

Becauseofthisrelativeimprovement andthedevelopmentpotential
ofNorthSeaoil,itwasdecidedtofixtheceilingatthemaximum
intensityavailable'of 78%foremailprojectsandtoaskforprior
notification ofprojectsofmorethan600.000EDAinvestmentwhere
the30ioceilingwouldbe.broken*Thisnotification shouldcontain
theappropriate socio-economic justification andtheannualreport
shouldcontinuetobeprovided.,
3.Byletterof28July1976(SG/76/D/8063)theCommissioninformed
Italyofitsdecisionnottoopposetheapplication ofchargesto
theaidschemeinSicily,Thechangesforindustriesinthesulphursubsidy -
miningareasconcernedanadditional/amountingto2Ofoofthose
investmentgrantsalreadyaccordedinthecontextofthespecial
legislationappliedtothewholeoftheHezzogiorno.Inadditiona
premiumamountingtoLit.200.000ayearforeaohregularjob
occupiedwastobegrantedoverthreeyears.
Theincreaseinintensityforthethenmeasurableaidshadthe
effectofincreasingthemaximumattainablebymeasurableaidfrom
90^to99foL\withthecondition,however,thatinordertoobtain
thissubsidyanentrepreneur musthaveashisowncapitalatlfeast
304>ofthefixedinvestment.
•/..
Thismaximumcouldonlybereachedwhenallthefollowingconditions
werefulfilled:thecreationofanentrepriseand,inanycase,for
investmentlessthanI.500mlire(1,5mEQA);locationinazoneof
depopulation ;theequipmentandmachineryboughtfromproducersin
theMezzogiorno;softloangivenonworkingcapitalwhichamountsto30$fixedinvestment.Thisisbasedonthejointapplicationofnational
aidlawsandthoseoftneregionofSicily.
Theseconditionshavesubsequentlybeenchangedbythenewaidsystem
^PP^icableintheMezzogiornowhichprovidesnotablyforareduction
inthemaximumintensityavailableforregionalaidsinItaly.

-4-
Inmakingthedecisiontogiveaderogation (subjecttocertainfrom
conditions)/theCommunityceilingestablishedby.the1975principles <
ofcoordinationforthisregion"^,theCommissiontookintoaccount
severalfactors.'Hiesocio-economic situation,intermsofincomeper
head,outwardmigration,thechangeinpopulationovertime,unemployment
andproportionofthepopulationinactiveemployment ,wasmuchworse
■«, , \
inSicilythanboththerestofItalyandtheCommunity.Theseindicators,
whereavailable,alsoshowedthesoeio–economicpositioninthesulphur 1
miningareatobeevenworsethantherestofSicily.Inadditionthe•
sulphurminingsectorwasexperiencing considerabledifficulties and
had.lostemploymentinthepast.Finally,thisadditionalaidwaslimited
tosmallandmedium-sized enterprises , ,
Itshouldbenoted,however,thatupto31December1978,these
supplementary measuresforSiqilyhadnotbeenputintoapplication
(informationsuppliedbytheItalianadministration).
4.Byletterof10June1977(SG(77)d/6325)theCommissioninformedthe
UnitedKingdomofitsdecisionnottoopposetheapplication ofchanges
proposedinrespectoftheareasoftheUnitedKingdomthatweretobe■
upgradedfromIntermediate AreastoDevelopmentAreas(theShotton .
traveltoworkarea,theHulltraveltoworkareaandtheGrimsby
2)EmploymentExchange).Theseareaswereformerlycoveredbyaceiling
ofintensityof20$,buttheaidsavailableinDevelopmentAreascan
exceed20$butrespecttheceilingof30$'(valuesexpressedinnet
grantequivalent).
Inmakingthedecisiontogiveaderogationandincreasetheceiling
to30$intheseareas,theCommissiontookintoaccountthatthe
./.
'TheseprinciplesfixedtheceilingsfortheMezzogiornoatthemaximum
intensityof-measurableaids(principallygrantsandsoftloans)available
•fromregionalaidsinapplicationon1January1975(COM(75)77final,point3)*
2/ti–.1nJnj._J-_i_i__L_«_. ,. . _"
I*fcshouldbenotedthatatthesametimecertainareasweredowngraded
fromDevelopment Area3toIntermediate Areas.

unemploymentrateintheregionsconcerned ,hadrisenabovethe
levelofotherIntermediate Areasaridwascomparabletothatof
otherDevelopmentAreas.Furthermorethesituationwasaggravated
bythelikelihoodoffutureredundanciesintheseareas.In
decidingnottoopposetheapplicationofthechanges,theCommission
madethereservethattheappraisaloftheseaidswouldbeputin
theframeworkofthefullexamination oftheUnitedKingdomaid
schemeunderArticle93(l)ESC#
Byletterof3October1977(SG(77)D/l010l)theCommission
informedtheUnitedKingdomofitsdecisionnottoopposethe
application ofchangestotheaidschemeinNorthernIreland.
Thesechangesconcernedanincreaseincapitalgrants,anincrease
inintensityofsubsidizedloans,morefavourabletermsforrent­
inggovernmentfactoriesandanincreaseinagrantrelatedtojob
creation.Theincreaseinintensityforthethenmeasurableaids
hadtheeffectofincreasingthemaximumattainablebymeasurable
aidsfrom45ia"to53fonetgrantequivalent.
Inmakingthisdecisiontogiveaderogationandraisetheceiling
to53$formeasurableaids-subjecttothereservethatthe
appraisaloftheseaidswouldbeputintheframeworkofthefull
examinationoftheUnitedKingdomaidschemetinderArticle93(l)
EEC-theCommissiontookintoaccountthatabriefanalysisof
thesocio-economic situationintermsof.unemployment andvalue
addedperheadofpopulation showedNorthernIrelandtobeina
comparablepositiontoIrelandandtheMezzogiorno.Inthesetwo
regionstheceilingofmeasurableaidswasabovethatforNorthern
Ireland,andevenwiththeincreaseinNorthernIrelandtheintensity
formeasurableaidsv?ouldstillbelowerthanthatinIrelandand
theMezzogiorno.

6.Byletterof18March1978(SG(78)D/3552)theCommissioninformed,the
IriehGovernmentofitsdecision .nottoopposetheimplementation of
proposalstoclassify,foraperiodofoneyear,theCityofLimerick
andsomesurroundingareasas"designatedareas",theareasconcerned
havinghaduntilthenthestatusofnon-designated regions.The
IndustrialDevelopmentAct19^9dividesIrelandintotwocategories
I
ofaidzones-designatedandnon–designatedregions.Intheformer,
enterprisescouldbenefitfromcapitalaidswithamaximumintensity
of56%and36%innetgrantequivalentfornewenterprisesand
reconversion ofexistingenterprisesrespectively .Bymeansofother .
lawstheenterprisesinthedesignatedregionsalso"benefitfromtwo
additionalformsofaid:asupplementary depreciation allowanceof20%
forallplantandmachineryandareductionfor10yearsof2/3rdsin
%taxespayabletolocalauthorities onnewindustrialbuildings.Inthe
non-designated regionstheintensityoftheabovementionedcapitalaids
•wererespectively 37%21%innetgrantequivalent-thesupplementary
depreciation andreductioninlocaltaxesarenotavailableinthese
regions.
Theproposedclassification thereforewouldhavetheeffectofincreasing
therateofregionalaidinthezonesinquestion,thusexceedingthe
ceilingsfixedbytheprinciplesofcoordination ofregionalaidsinl)1975•Th®Commissiondecidedtogiveaderogationfromtheceiling
subjecttothegeneraldecisionitwillhavetomakeunderArticle93(l)
EEContheIrish'regionalaidsystem.Inreachingitsdecisionthe
Commissiontookintoaccountofthefactthatunemployment intheregion
wasatthelevelof18%comparedwithaCommunityaverageof4,3%.
TheseprinciplesfixedtheceilingsformeasurableaidsinIrelandatthe
leveloftheirmaximumintensityineaohregionat1January1975(C0M(75)77final,point3)»