WRITTEN QUESTION E-1714/02

by Michl Ebner (PPE-DE) to the Commission

(13 June 2002)

Subject: State aids procedural deadlines

Article 88 (formerly Article 93) of the Treaty assigns to the European Commission specific competence to decide on the the compatibility of State aids with the common market. Projects aimed at introducing new aids or modifying existing systems are notified to the Commission and cannot be carried out until the Commission itself has authorised them.

Procedural deadlines are currently, however, very long, and the only definite deadline for the conclusion of the procedure on the part of the Commission is 20 months. These long deadlines entail insecurity and instability for businesses.

Does the Commission not consider that there is a need for streamlining, shorter procedural deadlines and simplified procedures for the purposes of a more competitive and stronger economy?

Does the Commission therefore not consider that it would be useful:

- to establish a definite maximum deadline (not the excessive one of 20 months)? Could it not be specified in Article 4(5), that the Commission may make no more than three requests for further information, by inserting after the third sentence a phrase saying something like However, the Commission may not make more than three requests for further information (since two initial requests plus a final one would be sufficient: such a procedure would mean that the examination of notifications is completed in no more than three stages, ensuring that the Commission itself is given a period of eight months for examination, two initially plus three requests with two-month deadlines)?

Or would it be even better to:

- specify in Article 7 (6) a precise deadline for the completion, by the Commission, of the examination procedure, by replacing, in the second sentence, the deadline of 18 months with one of 12 months, without changing the option of its being extended by agreement between the parties concerned in exceptional or justified cases? Or finally:

- devise and insert in Council Regulation (EC) 659/1999(1) some other provision establishing a suitable deadline, but a specific and shorter one than at present, for the conclusion of the procedure by the Commission?

If the whole reason is that the Commission does not have sufficient human resources to complete the procedures within shorter deadlines, why does it not consider increasing the number of human resources in the relevant directorate-general?

(1) OJ L 83, 27.3.1999, p. 1.

Answer given by Mr Monti on behalf of the Commission

(29 July 2002)

Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 (now Article 88) of the EC Treaty effectively provides a global indicative time limit of 20 months for the examination of notified aid. However, it is important to note that this time limit is broken down into two parts, a time limit of two months for the preliminary examination of the notified aid measure (Article 4) and an indicative time limit of 18 months for the conduct of a formal investigation (Article 7). Moreover, the Regulation does not establish any time limit for the examination of illegal aid, which has been paid without prior notification to and decision by the Commission, although the case law of the Community Courts indicates that such an examination should be completed within a reasonable time frame.

The initial time limit of two months is suspended if the Commission finds it necessary to request additional information from the Member State and a new two months time limit runs from the receipt of the information requested. This question and answer dialogue may continue for several times although the Member State may at any stage request the Commission to take a decision on the basis of the information available (Article 5(3)).

The information available shows that about 80 % of notified aids are approved by the Commission during the preliminary examination phase, about 15 % are withdrawn by the Member State concerned, and only about 5 % proceed to the formal investigation phase.

In an internal survey of a random sample of 100 State aid cases handled by General Directorate Competition, where the Commission decided not to raise objections to a notified aid without opening the formal investigation procedure, it was found that the average time necessary to prepare the decision was approximately four months from the notification, which is consistent with the time necessary for the initial assessment of the notification and the time necessary for one round of questions and answers with the Member State. In the 16 % of cases which took longer than six months to reach a decision, the primary contributing factors appear to have been the complexity of the issues raised, the poor quality of the original notification and delays in Member States responding to requests for information from the Commission.

On the other hand it must be recognised that substantial delays do sometimes arise in those cases where it is necessary to open the formal investigation procedure in accordance with Article 88.2 of the EC Treaty, although the indicative time limit of 18 months is respected in most cases. Inevitably these are the most complex cases, which often raise complex questions of assessment. In some cases the Commission may also find it necessary to have recourse to outside expertise. However, there are also sometimes substantial delays on the part of the Member States in providing the necessary information, or only incomplete information is provided. In extreme cases, Member States provide additional relevant information only after learning that the Commission is preparing a negative decision on the case.

The Commission is currently exploring means to improve the speed and efficiency of its State aid procedures, and it hopes to be in a position to launch a dialogue with Member States in the Autumn. It is not yet able to take a position on the possibility of proposing amendments to the Regulation, which in any case sets out maximum time limits and is not an obstacle to more rapid procedures. However, the Commission must also expect Member States to provide answers to its questions in a complete and timely manner, which is unfortunately not always the case. For this reason, the Commission would not favour the establishment of a legal limit on the number of sets of questions it can ask Member States.