WRITTEN QUESTION P-2841/00

by Nelly Maes (Verts/ALE) to the Commission

(4 September 2000)

Subject: Designating regional support areas

In the context of reform of the European structural funds, the Flemish government submitted a proposal in late December 1999 on designating development areas for the period 2000-2006. In these areas, which adjoin target areas, the Flemish government can give increased aid to businesses.

What is the logic of Europe's policy in designating development zones?

Is the administrative boundary of a region a factor in this logic?

Does the Flemish government's proposal to the Commission on designating regional support areas respect all objective criteria?

Do these criteria take account of the coherence of the region?

Answer given by Mr Monti on behalf of the Commission

(9 October 2000)

The notification by the Flemish authorities to which the Honourable Member refers does not concern the Structural Funds but the regional aid map for Belgium.

On 17 December 1999 the Belgian authorities notified, in accordance with Article 88(3) (former Article 93) of the EC Treaty, a proposal for a regional state aid map for the period 2006-2006.

Pursuant to Article 87(3)(a) and (c) (former Article 92) of the EC Treaty, the Commission may authorise the granting of national regional aid under certain conditions. Regional aid differs from other categories of state aid (e.g. research and development (R&D) aid and aid for small and medium-sized enterprises (SMEs))in that it is reserved for particular regions and has as its specific aim the development of those regions.

The Commission considers that regional aid can contribute effectively to regional development and hence justify the consequent distortions of competition, provided that it is used sparingly and remains concentrated on the most disadvantaged regions. If aid were to become generalised, it would lose all its incentive effect and its economic impact would be nullified. At the same time, it would interfere with the normal interplay of market forces and reduce the efficiency of the Community economy as a whole.

The above provides the basic rationale for the establishment of regional aid maps. The selection of regional aid areas on the basis of objective criteria enables the Commission to ensure that regional aid is concentrated on the regions experiencing the most severe problems and that, as a result, this instrument is effective.

The criteria to be used for the demarcation of regional aid maps are laid down in the guidelines for national regional aid(1). The guidelines provide that Article 87(3)(a) regions are defined on the basis of NUTS level II regions (the provincial level in the case of Belgium). They also provide that Article 87(3)(c) regions should normally conform to NUTS level III regions (arrondissements administratifs in the case of Belgium) or, in justified circumstances, to a different homogeneous geographical unit. In principle, therefore, Member States may propose geographical units other than administrative units for the demarcation of Article 87(3)(c) regions, provided that reliable statistical indicators are available at national level for the units proposed. A number of Member States have exercised this option and defined their map on the basis of geographical units other than NUTS level III regions. In some cases, they have opted for units that do not have an administrative function (e.g. bassins d'emploi in France, sistemi locali del lavoro in Italy and job opportunity zones in the United Kingdom).

In their notification, the Belgian authorities argue that NUTS level III regions can no longer be regarded as appropriate geographical units for the demarcation of the Belgian Article 87(3)(c) map for the period 2000-2006 (no region in Belgium satisfies the criteria for eligibility under Article 87(3)(a)). They propose to use NUTS level V (communes) instead and maintain that it is possible to define a compact regional aid map on this basis. The Commission is currently examining whether the Belgian proposal satisfies all the formal criteria and conditions laid down in the guidelines. It considers that the criteria set out in the guidelines with respect to the definition of the regional aid map should enable Member States to propose coherent regional aid maps. It maintains that, under normal circumstances, NUTS levels II and III constitute appropriate geographical levels for defining Article 87(3)(a) and (c) areas respectively and for implementing a coherent regional policy. In this context, it is also important to bear in mind a number of other considerations. As mentioned above, the guidelines provide for the use of geographical units other than NUTS level III for the definition of Article 87(3)(c) regions. This allows a Member State to use a basic geographical unit which it believes to be better suited for the demarcation of coherent regional policy areas. In line with the subsidiarity principle, it is up to the Member States concerned to take advantage of this possibility.

If a Member State is of the opinion that the present NUTS level II or III classification is no longer appropriate because it no longer reflects current economic spatial structures, it can always request that Eurostat adapt the boundaries of its NUTS level II or III regions. In fact, the NUTS classification for both the United Kingdom and Ireland has been modified in 1999 at the reasoned request of the relevant national authorities.

(1) OJ C 74, 10.3.1998.