Sixth survey on State aid in the European Union in the manufacturing and certain other sectors
Date: 1998-07-01
Institutions: European Commission
Subjects: State aid, aid to undertakings, control of State aid, manufactured goods, report

*1Î**§ÉW«§P 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 01.07.1998 
COM(1998)417  final 

SIXTH SURVEY ON STATE AID IN THE EUROPEAN UNION 
IN THE MANUFACTURING AND CERTAIN OTHER SECTORS 

(presented by the Commission) 

CONTENTS 

INTRODUCTION 
Background 
Conceptual remarks 

PART I - AID TO THE MANUFACTURING  SECTOR 

Volume and trend of aid 
Community totals 
Comparisons between Member States 

Aid to shipbuilding 
Aid to steel industry 
Aid to the motor vehicle industry 
Types of aid instruments 
Objectives  of aid 
State aid given on an ad-hoc basis 
German State aid to the new Lander 

PART II - OVERALL NATIONAL AID IN THE MEMBER  STATES 

Aid to sectors other than the manufacturing  sector 

Aid to agriculture 
Aid to fisheries 
Aid to services 
Aid to the financial  services sector 
Aid to the air transport sector 
Aid to railway transport 
Aid to coal mining 

Volume of overall aid in the Community 
Budgetary  impact of aids 

RESULTS 

CONCLUSIONS 

ANNEX I:  TECHNICAL ANNEX 

ANNEX II:  STATISTICAL ANNEX 

ANNEX III:  COMMUNITY FUNDS AND INSTRUMENTS 

1 
1 
3 

6 
6 
6 
8 
12 
14 
14 
16 
19 
26 
28 

30 
30 
30 
33 
35 
35 
35 
36 
38 
40 
43 

45 

48 

52 

65 

85 

6 

7 

9 

13 

14 

TABLES AND  FIGURES 

Table 1 

State aid to the manufacturing sector in the Community 

- annual values in constant prices  (1995) 

Table 2 

State aid to the manufacturing sector in the Community 

- annual values  1992 to 1996 

Table 3 

State aid to the manufacturing sector in the Community 

Table 4 

Table 5 

Table 6 

Table 7 

- annual averages  1992-1994 and  1994-1996 

Aid to shipbuilding in  1994-1996 in percent of contract values of ships 

Shipbuilding development aid as decided upon by EC 

State  aid  approved  to  the  motor  vehicle  sector  in  the  years  1992-1996 

1 5 

State aid to the manufacturing sector  1994-1996 - breakdown according to 

type of aid 

Table 8 

State aid to the manufacturing sector  1994-1996 - breakdown according to 

sector and function 

Table 9 

State aid to the manufacturing sector  1992-1994 and 1994-1996 

- breakdown to main objectives 

Table 10 

Table 11 

State aid on an ad-hoc basis and Treuhand aid awarded in the manufacturing, 
financial services and air transport sectors in the Member States in the years 
1992 to 1996 

State aid on an ad-hoc basis awarded in the manufacturing, financial services 
and air transport sectors in the Member States - annual averages 1992-1994 
and  1994-1996 

Table 12 

National aid in respect of products  listed in Annex  II of the EEC Treaty. 

Table 13 

State aid to fisheries in per cent of gross valued added in this sector 

Table 14 

Community interventions in the fisheries sector 

Table 15 

State aid to transport (Railways) 

Table 16 

State aid to coal industry 

Table 17 

Overall national aid in the Member States 

Table 18 

Overall national aid in the Member States in per cent of GDP 

Table 19 

Overall national aid in the Member States broken into main sectors 

16 

24 

25 

27 

27 

32 

34 

34 

37 

38 

41 

42 

44 

STATISTICAL  ANNEX 

Table A1 

State aid to the manufacturing sector in current prices 1992-1996 

(National currency) 

Table A2 

State aid to the manufacturing sector in current prices  1992-1996 (ECU 

Table A3 

German State aid to the new Lander - yearly average 1994-1996 

Table A4 

Total State aid - annual average  1994-1996  by Member State 

Table A 

Table B 

Annual  Community Expenditure 

Other Community Instruments 

Table C1 

Community Average Annual Expenditure by Member State 

Table C2 

Community Average Annual Expenditure by Member State 

FIGURES 

Figure  1 

State aid to the manufacturing sector as percentage  of value added 

Figure 2 

State aid to the manufacturing sector: Distribution by tax and budgetary 

expenditure 

Figure A1 

Aid to the manufacturing sector and Community Funds per employee 

66 

67 

68 

70 

95 

96 

97 

98 

10 

18 

69 

m 

INTRODUCTION 

Background 

1. 

The  need  for  an  effective  method  of  systematic  quantification  of  State  aid 

for the purposes  of competition  policy was fully perceived  in  1985, the  year 

which  saw  the  publication  of  the  Commission  White  Paper  on  completing 

the  internal  market.  At  the  end  of  that  year  the  Commission  instructed  its 

departments  to  compile  and  publish  a  fact-based  analytical  survey  on  the 

granting of State aid in the Member States of the Community. 

Since  the  First  Survey,  covering  1981-86,  concluded  that  transparency  in 

the  field  of  State  aid  had  to  be  increased,  it  was  decided  that  updating 

should  be carried  out,  and this was  done  in the  Second, Third,  Fourth  and 
Fifth  Surveys,  covering  the  periods  1987-88,  1988-90,  1990-92  and  1992-
94 respectively1. 

2. 

The  Sixth Survey  updates the existing  data and covers the period  up to  and 

including  1996.  It  thus  covers  for  the  first  time  the  new  Member  States 

Finland, Sweden and Austria and provides  information on the then  prevailing 

structure  of  state  support  to  companies  in the fifteen  Member  States  of  the 

Union. 

3. 

The  publication  of  this  Sixth  Survey  underlines  the  commitment  of  the 

Commission  to  maintain  an  open  policy  on  the  control  of  State  aid.  This 

emphasis  on transparency  is  increasingly  important  given the  environment 

in  which  the  Commission  currently  operates,  both  within  the  Union  itself, 

and in the wider international  context. 

The  completion  of the  internal  market  and  the  approaching  economic  and 

monetary  union  require  an  increasingly  effective  control  of  State  aid  since 

such  aid  can  be  used  to  replace  barriers  to  trade  that  have  been 

dismantled  in the integration process. 

References: 

COM (88) 945 
COM (90)  1021 
COM (92)  1116 
COM (95) 365 
COM (97)  170 

Member  States will willingly contribute to the completion  and future proper 

functioning  of  the  internal  market  only  if  they  are  certain  that  all  other 

Member  States  abide  by  the  same  rules  when  subsidising  their  firms. 

Compiling and publishing data on the aid amounts awarded is one, and not 

the  least  means  by which  the  Commission  demonstrates  to  the  Member 

States  that  it  is constantly  keeping  a  close  watch  on  public  interventions, 

both  on  their  overall  development  and  the  development  in  each  of  the 

Member States. This in turn will allow it to adjust its policies where required 

in order to execute  a fair  and efficient  State  aid  control, and to adapt to a 

changing economic environment. 

4. 

Looking  at  the  international  context,  this  decade  has  witnessed  the 

conclusion of the Europe Agreements with the Central and East  European 

Countries  (CEECs),  and  subsequently  the  opening  of  membership 

negotiations.  The  burdens  of the  past  of these  countries  in transition  are 
particularly heavy requiring considerable public support in some areas. This 

urgently  calls for  increased  transparency  in the  field  of  State  aid  in these 

countries.  Through  the  publication  of  its  own  Surveys  on  State  aid  the 

Commission  and  indeed  the  whole  European  Union  give  a  concrete 

example to these countries of the level of transparency that is expected of 

modern,  competitive  market  economies.  This  will  facilitate  fulfilling  the 

reporting obligation of the CEECs as laid down in the Europe Agreements. 

The  first  surveys  submitted  by  a  number  of  the  CEECs  seem  to  confirm 

this,  demonstrating  as they  do  a  reasonable  level  of sophistication which, 

with  further  development,  should  in  the  near  future  provide  a  basis  for 

meaningful  comparisons  as  far  as  the  granting  of  State  aid  in  the 

Community and the CEECs is concerned. 

Equally  important,  in  the  context  of  the  World  Trade  Organisation  the 

Survey  provides  an  example  of  what  we  should  expect  from  our  trading 

partners  in  terms  of  transparency.  In  this  respect  it  complements  the 

notification  to  the  WTO  of  Community  and  Member  States  subsidies 

pursuant  to  Article  25  of  the  WTO  Agreement  on  Subsidies  and 

Countervailing  Measures.  In  a  similar  fashion  the  Survey  furthermore 

provides an example to our partners in the OECD. 

Conceptual  remarks 

5. 

This  Sixth  Survey  on  State Aid  covers  the  period  1994-1996,  updating  the 

Fifth  Survey  (published  in  1997)  which  covered  the  period  1992-1994. 

Included  in  the  Survey  is  national  aid  given  in  the  Community  of  fifteen 

Member  States  to  the  sectors:  manufacturing,  agriculture, 

fisheries, 

transport  -  railways  and  aviation  -,  financial  services  and  energy  (coal), 

Compared with the previous  Survey,  more detailed  information  on state aid 

in  certain  sectors,  has  been  provided.  General  explanations  of  the 

methodology  used  are  given  in  the  Technical  Annex  (Annex  I).  The 

Statistical  Annex  (Annex  II)  contains  basic  statistical  data  on  aid  to  the 

manufacturing  sector  and on overall  aid. An  overview  of Community  Funds 

and  Instruments  is given in Annex III. 

6.  When  comparing  the  different  Member  States,  the  analysis  of  the  aid 
figures  concentrates  on  the  annual  averages  over  the  three-year-period 

1994-1996.  Where  appropriate,  the  figures  for  the  period  1992-1994  are 

given  by way  of comparison. As  explained  in the  Technical  Annex  (Annex 

I), for the three  new Member  States, who  have  only  been  members for  the 

years  1995 and 1996, the annual average of these two years is used. 

As  in  the  preceding  surveys,  the  periods  compared  overlap  by  one  year. 

For  comparisons  between  Member  States,  the  use  of  overlapping  three-

year  averages  is  the  only  way  of  arriving  at  conclusions  supported  by 

sufficiently  reliable  statistics.  This  is  because  for  some  of  the  figures, 

amounts  are  at  present  only  known  over  longer  than  one-year  periods.  In 

such cases, the amounts have to be arbitrarily assigned to individual years. 

Secondly,  the  amounts  for  the  last  year  reported  on  (1996)  are  to  a  non-

negligible  extent  provisional  and, as was  already  the  case for the  last  year 

of  the  period  reviewed  by  the  previous  Survey  (1994),  will  certainly  be 

modified by the Member States in future. The resulting provisional nature of 

the  data  on  the  last  year  of  the  period  under  review,  particularly  when 

broken  down  for  Member  States  is  statistically  straightened  out  by  using 

overlapping  three-year  averages.  In  order  to  make  the  averages  for  the 

previous  period  comparable  with  those  of  1994-1996,  1992-1994  figures 

are  expressed  in  1995  prices2.  Throughout  the  Survey,  therefore,  figures 
are given in real terms.3 

7. 

For  the  first  time  aid  given  within  the  air  transport  and  financial  services 

sectors, has been highlighted, whereas in the previous surveys the little aid 

given  to  these  two  sectors  was  contained 

in  the  category  of  the 

manufacturing  sector.  Therefore,  comparisons  of  the  development  of 

overall levels of aid between this and previous surveys should be based on 

the  manufacturing  sector  aid  figures  of  the  past  and  the  manufacturing 

sector plus aviation and financial services totals. 

8.  Commission departments  in co-operation with the Member  States drew up 

the figures for  1995  and  1996. Together with the existing figures for  1992-

1994 (for the then EUR  12) they were verified by the Member States and, if 

necessary,  modified. This  procedure  ensures that  a  relatively  high  degree 
of reliance can be placed in the data4. 

As  far  as  Greece  is  concerned,  the  Commission,  when  establishing  the 

Greek  figures for  previous  reports,  used as a  reference  a  study  on  Greek 

State aid and spending undertaken by a consultant. This study then served 

as  a  basis for the  Commission departments' estimates  and extrapolations. 

The  improved  contribution  received  from  the  Greek  authorities  is  to  be 

welcomed  and has permitted  improvement of the Greek data.  However,  as 

a  comprehensive  contribution  from  the  Greek  authorities  has  not  been 

received  to  date  the  figures  still  comprise  a  non-negligible  proportion  of 

estimates,  and  therefore  the  results  for  Greece  should  be  treated  with 

caution. 

As  far  as  Ireland  is  concerned,  the  considerable  step  decrease  in  the 

overall level of aid to the manufacturing sector, when compared with 

For this  reason,  and because  of the -  in some cases considerable  - modifications  by the  Member 
States  of  the  1994 figures mentioned  above, figures for  1992-1994  are  not  the  same  as  those 
published in the Fifth Survey. 
Figures for aid to manufacturing at current exchange rates are given in the Statistical Annex (Annex 
ID-
Certain figures for  1994-1996 were modified particularly in the case of; Belgium where there was a 
marked improvement in data quality; Greece where there was also an improvement in the reliability 
of  data;  France,  where  data  on  aviation  and  banking  aid  are  presented  in  part  ii  of  the  survey; 
Ireland, where co-financing  figures  were removed  (see p.4-5); and Portugal, where data on aid to 
aviation  are  also  presented  in  part  ii  As  a consequence,  figures  in  this  survey  are  not  directly 
comparable with those in the previous survey. 

4 

previous surveys,  is due to the fact that  in the previous reports the figures 

provided  by  the 

Irish  authorities  contained  figures  on  Community 

expenditure. As the  Irish authorities had to resort to estimations  in order to 

delimit  national  expenditure  from  Community  expenditure,  the  results  for 

Ireland should be also treated with caution. 

PART I - AID TO THE MANUFACTURING SECTOR 

Volume and trend of aid 

9. 

In the Community the industrial sector is granted more aid than any of the 
other sectors covered by this Survey; in fact, during the period 1994-1996 
as much as 46% of overall aid went to this sector. The analysis of aid in this 
sector of the economy is, therefore, the centrepiece of this Survey. 

Community totals 

10.  Table 1  shows the annual amounts of aid to the manufacturing sector in the 

Community in the years 1992 to 1996. 

Table 1 

State aid to the manufacturing sector in the Community 1992-1996 
Annual values in constant prices (1995). 

1992 

1993 

1994 

1995 

1996 

Million ECU 

EUR 15 
EUR 12 

39062 

44057 

41198 

38591 
37386 

35163 
34106 

The figures in Table 1 lead to the conclusion that the aid granted in EUR 12 
has  returned to the downward trend observed  in the past. The findings of 
the previous (Fifth) survey, which indicated a halt to this, would thus appear 
to  have  been  an  exception  to  the  general  tendency.  Aid  for  the 
manufacturing sector alone in the EUR 12 in 1994-96 is situated around an 
annual  average  of  some  37,5  billion.  For the  EUR  15 the  corresponding 
figure is 38,3 billion. 

11.  Absolute values, even if aggregated at Community level, are of only limited 
use for reflecting trends in national aid policies over time. Therefore, Table 
2  shows  aid to the  manufacturing  sector  as  a  percentage  of value added, 
per  person  employed  in  this  sector,  and  in  percent  of  intra-Community 
exports of manufactured goods.5 

Table 2 

State aid to the manufacturing sector in the  Community 
Annual values 1992 to 1996 

EUR  12/15 

1992 

1993 

1994 

1995 

1996 

In per cent of 
value added 

In ECU per 
person employed 

In per cent of 
intra-community 
trade* 

3,2 

3,8 

3,4 

2,9 

2,7 

1206 

1436 

1374 

1217 

1123 

5,7 

7,0 

5,7 

4,8 

4,4 

at constant  1995 prices 
* 

intra-Community  trade of industrial products 

Aid  levels  relative to value  added fluctuate  slightly above  3%  for the  EUR 

12 between  1992-94, and dropped below 3% for the EUR  15 in 1995-96. 

The amount of aid per person employed in the manufacturing sector for the 

EUR  12 varies between ECU  1206 in 1992 and ECU  1436 in 1993.  For the 

EUR  15 it drops from ECU 1217 in 1995 to ECU  1123 in 1996. Aid relative 
to  the  value  of  intra-Community  trade6  of  manufactured  goods  -  this  ratio 
can be seen as a good indicator for the potential distortion of competition in 

the  Community -  peaks  in  1993 for the  EUR  12  at 7%,  falling to 4,4% for 

the EUR 15 in 1996. 

Since a small but not exactly  quantifiable  part of the aid amounts has to be attributed to the 
service sector (tourism, consultancy), the figures shown may be slightly overestimated. 
The  big  step-level  decrease  in  the  indicator  relating  aid  to  intra-community  trade  when 
compared  with  the  previous  surveys  can  be  explained  by  a  change  in  the  base  used  for 
calculating the absolute level of intra-community  trade (see Technical Annex). 

7 

The  generally  lower  figures  for  the  EUR  15  in the  years  1995  and  1996, 

compared  with  the  EUR  12  figures  for  1992-1994,  not  only  reflect  the 

decrease  in the  overall trend  of aid  levels  in the  Community,  but  also  the 

generally lower levels of aid prevailing in the three new Member States with 

respect to the EUR  12 average. 

12.  From Tables  1 and 2, it can be seen that the absolute aid amounts and the 

three  indicators  used  to  mirror  the  tendency  of  aid  to  the  manufacturing 

sector at Community  (EUR  12) level largely coincide: they indicate a return 

to  the  downward  trend  observed  in the  past,  which  was  only  momentarily 

halted as shown by the findings of the previous survey. 

Comparisons between Member States 

13.  Table 3 compares the average aid levels in the manufacturing sector for the 
different  Member  States7  for  the  periods  1992-1994  and  1994-19968, 
expressed  in  per  cent  of gross value  added  and  aid  amounts  per  person 
employed  in this sector.  In addition, real term absolute  amounts  of aid  are 
given for information. 

Germany  has  been  divided  into  the  old  and  new  Lander  in  order  to  show  clearly  the  different 
development  in the two German  areas, marked by the unprecedented  adjustment  process  of the  new 
Lander economy to a market  system. 
As  explained  in  point  6  above,  detailed  breakdowns  by  Member  States  can  only  be  compared 
reliably  if overlapping three-year averages are used. For an explanation  of the methodology  used  for 
establishing  the  annual  averages  over  the  three-year-period  1994-1996  for  the  three  new  Member 
States,  who  have  only  been  members  for  the  years  1995  and  1996,  turn  to  the  Technical  Annex 
(Annex I). 

8 

Table 3 

State aid to the manufacturing sector in the Community9 
Annual averages 1992 -1994 and 1994 -1996 

In per cent of value 
added 

In ECU per person 
employed 

In million ECU 

1992-1994 

1994-1996 

1992-1994 

1994-1996 

1992 -1994 

1994-1996 

-

-

-

2,5 

2,5 

4,4 

6,5 

1,8 

2,4 

1.7 
6,4 

2,6 

1,5 

2,5 

0,9 

3,5 

Austria 

Belgium 

Denmark 

Germany 

-Old  Under 

-New Lander 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

United Kingdom 

EUR 12 

EUR 15 

Averages in 1995 prices 

1,3 

3,0 

2,9 

3,8 
: 

i 

6,3 

2,7 

1,6 

1,8 

1,5 

5,8 

2,3 

1,4 

1,9 

0,8 

0,9 

-

1310 

1120 

2091 

527 

10816 

987 

512 

-

-

1174 

818 

2205 

1555 

760 

443 

245 

1339 

626 

1678 

1383 

1888 

455 

8216 

863 

837 

911 

927 

838 

2151 

1375 

788 

371 

406 

263 

-

920 

539 

19851 

4312 

15539 

722 

1311 

-

4931 

198 

10320 

55 

694 

467 

-

448 

1149 

671 

16639 

3192 

13447 

662 

2101 

365 

3740 

215 

9760 

46 

686 

382 

318 

1431 

1513 

41439 

37563 

3,0 

1238 

38318 

The figures  for  1994-1996  in Table  1 do not  correspond  with  the  average  presented  in  Table 3, 
because the totals in Table  1 do not contain  figures  for the three new Member States for  the year 
1994.  The  1994-1996 annual average obtained  from  Table  1 would therefore  be somewhat  lower 
than that  shown  in Table  3, which  has been  obtained  by calculating  the  annual  average  of those 
years for which data is available and using this average for the whole period. 

9 

Figure 1 

State aid to the manufacturing sector 

As percentage of value added (averages 1992 -1994 and 1994 -1996) 

AU* 

B 

DK 

D 

GR 

E 

FIN* 

F 

IRL 

I 

L 

NL 

P 

UK 

EUR 
15 

•  1992 -1994 

B1994-1996 

' during  the period  1992-1994,  these  countries  were  not yet  members  of the  EU 

The  highest  levels  of  aid  to  the  manufacturing  sector  are  to  be  found  in 

Greece and Italy. These countries rank high above Community average. As 

noted above, the continuing  uncertainty  attached to the figures for Greece 

does not yet allow any further detailed comment. 

Germany 

is  also  above  the  Community  average  with  Belgium  on 

Community average, while Denmark and Spain are slightly below. 

The  lowest  aid to the  manufacturing  sector  is given,  in declining  order,  in 
Austria,  the  United  Kingdom  and  Sweden.  In  all these  countries  aid  is far 
below the  Community  average.  Due to lack  of statistics,  aid  in per cent of 

10 

value  added  for  the  two  distinct  parts  of  reunified  Germany  could  not  be 
calculated. 

14.  Aid  per  person  employed  in  Italy  is  the  highest  of  all  Member  States, 

followed  by  Germany.  The  extremely  high  figure  for  the  new  German 

Lander is due both to the high amounts of aid granted and a sharp decline 

in  the  number  of  employees  in  this  part  of  Germany.  The  decrease  as 

compared  with  the  previous  reporting  period  reflects  that  the  peak  of the 

restructuring  process  following  German  reunification  in  1990  was  already 

reached  during  the  previous  review  period.  At  the  same  time,  aid  per 

person employed  in the old Lander has continued to decline and  is among 

the  lowest  in  the  Community.  Belgium,  Denmark  and  Luxembourg  are 

above the Community average. The group of low aid givers now comprises, 

in descending order, Sweden, Portugal and the United Kingdom. 

15.  As a  general  conclusion on the differences  in aid trends between  Member 

States,  it  can  be  established  that  significant  differences  between  the 

individual countries remain. 

A  comparison  of  the  four  big  economies  shows  that  in  Italy  aid  to  the 

manufacturing  sector as a percentage of value added  is more than 6 times 

higher than  in the  United Kingdom, 3 times higher than in France, and  1,5 

times  higher  than  in  Germany.  The  observed  disparity  between  these 

Member  States  can be  partly explained  by their differing  views on the use 

of the State aid instruments. 

When  considering  the  overall  differences  in  the  Community  under  the 
aspect  of  cohesion, the trend  now  appears  to  be  slightly  more  promising 
than  the  one  identified  in the  previous  survey  where  a  direct  comparison 
between  the  four  large  Member  States  and  the  four  cohesion  countries  -
Spain, Ireland, Portugal, and Greece - revealed that the relative importance 
of  state  support  to  the  manufacturing  sector  was  rising  in  the  larger 
Member  States  at the  expense  of the  cohesion  countries.  Table  3  shows 
that the volume of aid in the four cohesion countries has increased from 6,5 
to 8,8%  of total aid to the  manufacturing  sector  in the  Community  of EUR 
12 whilst  the  share  of the four  big  economies  of this  aid,  having  been  at 
around  88%  in  the  period  1992-1994,  has  decreased  to  around  83%  in 
1994-1996.  In  this  context  it  should  also  be  noted  that  in  addition  to 
National State aid, the manufacturing sector benefits from 

11 

Community  interventions  via  the  Structural  Funds  (see  Annex  II,  Figure 

A1).  In relative terms, the largest beneficiaries from this expenditure are the 

four  cohesion  countries, which  see their  relative  aid position  improved  to  a 

level  which  better  reflects  their  weaker  socio-economic  situation.  The 

effectiveness  of these  Community  instruments,  however,  depends  crucially 

on their  not being  outweighed  by an unbalanced development  in the  use  of 

state aid measures. 

16. 

It is evident from Table  3 that behind the decrease  in the figures  on  overall 

aid  to  the  manufacturing  sector  in  the  EUR  12  lies  the  considerable 

decrease  in  aid  expenditure  in  Germany,  both  in the  new  and  old  Lander. 

This decrease  is to some extent offset by an increase in aid to 5 countries 

Aid to  shipbuilding 

17. 

In shipbuilding, a sub-sector of the manufacturing sector, the granting of aid 

is  governed  during  the  reporting  period  by  the  Seventh  Shipbuilding 
Directive10, which applied from the 01/01/1991. 

Table  4  shows  contract  related  operating  aid  covering  new  constructions, 

conversions  and  fishing  vessels,  and  thus  reflects  the  aid  intensities  for 

which  the  Commission  sets  ceilings  when  implementing  the  shipbuilding 

directive.  The  aid  ceilings  under  the  prevailing  Directive  are  4,5%  of 

contract  value  both  for  ships  with  a  contract  value  of  less  than  ECU  10 

million  and  for  conversions,  and  9,0%  of  contract  value  for  ships  with  a 

contract value of more than ECU  10 million. 

In  addition  to  operating  aid,  the  shipbuilding  sector  can  receive  aid  for 

restructuring.  During  the  period  under  review  restructuring  aid  totalling 

about  ECU  1080 million  has been given  in Spain, Belgium and  Portugal. In 

the  new German  Lander  aid for  restructuring  between  1994 and  1996  adds 

up to about  ECU 890 million. 

When  relating total aid given  in the shipbuilding  sector to the sector's  value 

added the  conclusion  can  be drawn that this  is a heavily  supported  sector. 

As was seen earlier from Table 3, aid for the manufacturing  sector  amounts 
to  3,5%  of  the  sector's  value  added; for  the  sub-sector  of  shipbuilding  aid 

covers some 25% of the sector's value added. 

10  OJL  380 of 31.12.1990. 

12 

The  Community  average  for  aid  to  the  shipbuilding  industry  strongly 

declined  from  34%  of  value  added  for  1988-1990  to  24% for  1990-1992, 

thereafter  stabilising around 25% for  1992-1994 and  1994-1996. 

Table 4 

Aid to shipbuilding  in 1994-1996  in per cent of contract values of ships 

1994 

1995 

1996 

Small 
Ships* 

Large 
Ships* 

Total 

Small 
Ships 

Large 
Ships 

Total 

Small 
Ships 

Large 
Ships 

Total 

Austria 

Belgium 

Denmark 

Germany 

France 

Finland 

Spain 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

United Kingdom 

0 

4,31 

4,12 

4,3 

0 

0 

4,5 

-

0 

4,5 

0 

3,3 

0 

0 

4,8 

0 

0 

8,4 

6,1 

9,0 

0 

8,8 

-

0 

9,0 

0 

3,7 

8,8 

0 

0,7 

0 

4,31 

8,0 

5,9 

9,0 

0 

8,4 

-

0 

8,5 

0 

3,6 

8,8 

0 

1,6 

0 

0 

4,2 

4,0 

0,0 

0 

4,3 

-

0 

4,5 

0 

2,9 

0 

0 

0 

0 

8,3 

6,5 

9,0 

0 

0 

0 

8,2 

6,5 

9,0 

0 

8,1  . 

7,8 

-

0 

9,0 

0 

3,3 

0 

0 

-

0 

8,8 

0 

3,2 

0 

0 

0 

0 

4,5 

4,5 

0,0 

0 

4,3 

-

0 

4,5 

0 

3,1 

0 

0 

0 

0 

9,0 

6,7 

9,0 

0 

8,0 

-

0 

9,0 

0 

4,8 

0 

0 

0 

0 

8,9 

6,6 

9,0 

0 

7,4 

-

0 

8,7 

0 

3,2 

0 

0 

4,3 

8,6 

8,2 

4,3 

6,0 

6,0 

EUR  12/15 

-

-

-

-

-

-

-

-

-

k Small  ships  are  those  with  a  contract  value  of  less  than  ECU  10  million.  For  these  the 
maximum  aid  intensity  allowed  by  the  7th  Shipbuilding  Directive  is  4,5  %  of  contract 
value. 

**Large  ships  are those with  a contract  value  of  more  than  ECU  10 million.  For  these  the 
maximum  aid  intensity  allowed  by  the  7th  Shipbuilding  Directive  is  9,0  %  of  contract 
value. 

- Note that a dash indicates  missing information, whereas a zero indicates no aid. 

State  aid  granted  to  European  shipyards  for  the  construction  of  ships  for 

developing  countries  rose  from  a  yearly  average  of  76  M E CU  during  the 

13 

period  1992 -  1994 to 203 MECU in 1994 -  1996. The distribution by 

country  is given below. 

Table 5 

Shipbuilding  development  aid 

- as decided 

upon by EC 

1992 

1993 

1994 

1995 

1996 

Million ECU 

0 

0 

0 

0 

0 

21,6 

19,4 

0 

0 

185,96 

108,82 

103,44 

0 

0 

0 

55,98 

34,18 

39,19 

33,14 

48,89 

0 

41 

185,96 

238,17 

185,47 

Germany 

Spain 

Netherlands 

France 

Total 

in current  ECU 

Aid  to steel  industry 

18. 

In  the  other  sub-sector  of  the  manufacturing  sector,  steel, the  granting  of 

aid  in  the  period  under  review  was  regulated  under  the  fifth  Steel  Aids 

Code  of  1991. After  aid  had  been  virtually  phased  out  by the  end  of  1992, 

1994-96  saw  the  formal  adoption  by  the  Commission  of  decisions  under 

Article  95  ECSC  Treaty  concerning  the  restructuring  of  steel  companies  in 

the  new  German  Lander,  Spain,  Italy,  Portugal,  Ireland,  and  Austria. 

Together  these  aids  amounted  to  an  annual  average  of  around  ECU  1500 

million  in  1994-96.  This  amount  does  not  comprise  aid  granted  in  this 

sector  for  other  objectives  such  as  R&D,  regional  development  and 

environmental protection. 

Aid  to the motor  vehicle industry 

19.  Whilst  there  are  no  aid  schemes  in  the  EU  that  are  specific  to  this  sub-

sector,  State  aid  granted  to  the  motor  vehicle  sector,  mainly  by  way  of 

regional  and  rescue  and  restructuring  aid,  is  for  the  first  time  also  the 

subject  of analysis in this survey. 

It is quite difficult at present to draw any conclusions  as regards the general 

trend  because  of  the  very  small  number  of  cases  (for  example,  in  Italy  in 

1992  when  one  case  amounted  to  2928  MECU).  The  main  conclusion  is 

14 

that  given  the  existance  of  a  specific  framework,  the  award  of  aid  by 

Member States remains within limits. 

Table 6 

State aid approved to the motor vehicle sector in the years 1992-1996 
(not including cases below the notification  ceilings) 

1992 

1993 

1994 

1995 

1996 

Million ECU 

-

11 

159 

8 

0 

2928 

0 

0 

7 

-

0 

112 

48 

32 

0 

0 

0 

66 

-

0 

307 

39 

0 

250 

0 

0 

13 

0 

33 

3 

328 

0 

0 

7 

0 

0 

10 

0 

340 

202 

83 

0 

0 

103 

72 

Austria 

Belgium 

Germany 

Spain 

France 

Italy 

Netherlands 

Portugal 

United  Kingdom 

Total 

3113 

258 

609 

371 

810 

in current ECU 

15 

Types of aid  instruments 

20.  Table 7 gives an overview  of the use of the various types of aid  instruments 

in the Member States. 

Table 7 

State Aid to the manufacturing sector  1994 -1996 
Breakdown according to type of aid 

TYPE OF AID 

Group A 

Group B 

Group C 

Group D 

per cent 

Grants 

Tax 
exemptions 

Equity 
participation 

Soft 
loans 

Tax 
deferrals 

Guarantees 

TOTAL 

Austria 
Belgium 
Denmark 
Germany 
Greece 
Spain 
Finland 
France 
Ireland 
Italy 

Luxembourg 
Netherlands 
Portugal 
Sweden 
United  Kingdom 

79 
54 
83 
55 
66 
93 
81 
44 
89 
43 
92 
73 
82 

61 
88 

0 
35 
10 
15 
13 
0 
3 
38 

0 
42 
4 
13 
8 
19 
5 

EUR 15 

57 

23 

0 
1 
0 
1 
0 
0 
0 
4 
0 
9 
0 
0 
0 
2 
0 

3 

14 
3 
5 
22 
3 
6 
15 
3 
0 
6 
4 
3 
2 

18 
2 

13 

0 
0 
0 
1 
0 
0 
0 
1 
0 
0 
0 
2 
0 
0 
1 

1 

7 

6 
2 
5 
18 
0 
1 
10 
11 
0 
0 
9 
8 
0 
4 

100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

4 

100 

Grants  and  tax  exemptions,  which  have  been  classified  in  this  Survey  as 
group  A  forms  of  intervention,  are  by far  the  most  frequently  used  form  of 
aid  in  the  Community.  Within  this  group,  direct  grants  are  more  often 
employed  than  tax  exemptions.  This  can  be  explained  by the  fact  that  the 
former  type  of  aid  is  more flexible  than  the  latter.  Since the  introduction  of 
grants  is in general  less  "costly" in terms  of  parliamentary  procedures  than 
the  introduction  of changes  to tax  laws, governments  have  a preference  to 
employ the former type of aid.  It can also be noted that the  relative share  of 

16 

grants  has  increased  considerably  from  the  previous  survey,  accounting 

now for 57% of total aid expenditure  in the EUR  15 whereas  in 1992-1994 it 

accounted  for 48% of the total aid expenditure  of the  EUR  12. At the  same 

time, the relative share of tax exemptions  has decreased from 26% to 23%. 

21.  Aid  in  the  form  of  state  equity  participation,  classified  under  group  B, 

represents  3%  of  all  aid  to  the  manufacturing  sector  granted  in  the 

European  Union; the figure for this type of aid has decreased  as during the 

period  1994  to  1996  very  few  financial  transfers  in  the  form  of  equity 

participation to public undertakings  including an aid element took place. 

22.  Forms  of  aid  classified  in group  C,  i.e.  loans  at  reduced  interest  rates  and 

tax  deferrals,  are  an  important  form  of  aid  in  Germany  and  Sweden. 

Member  States  generally  avoid  the  award  of  soft  loans  because  it  puts  a 

heavy  burden  on the  budget.  The  figures  for  soft  loans  represent  only  the 
aid  element;  the  gross  budgetary  resources  necessary  for  these  aids  are 

much higher. This explains the low share in the manufacturing  sector of this 

form  of  aid.  Member  States  prefer  to  reduce  the  cost  of  loans  by  granting 

interest subsidies. 

Tax  deferrals,  mainly  accelerated  depreciation  and  the  constitution  of  tax-

free  reserves,  is the  form  which  is  least  used  in  the  Community.  Only  the 

Netherlands,  France,  Germany  and  the  United  Kingdom  grant  support  in 

this form. 

23.  Guarantees,  group  D,  continue  to  be  mainly  used  to  help  in  rescue  and 

restructuring  operations  and  to  foster  the  development  of  small  and 

medium-sized  enterprises.  Although  its  share  in  industrial  aid  is  the  third 

smallest  on  average,  it  is  a  significant  part  of  aid  in  Greece,  Ireland  and 

France.  The  calculation  of  the  aid  element  of  guarantees  is  particularly 
difficult  and,  therefore,  they  are,  together  with  equity  participation,  a  very 

non-transparent form of State aid. 

17 

Figure 2 

State aid to the manufacturing  sector 
Distribution  by tax expenditure and budgetary  expenditure  1994-1996 

Budget  Expenditure 

• 

Tax  Expenditure 

24.  Figure 2 gives a breakdown  of aid to the manufacturing  sector  according  to 

the  mode  of  financing.  Budgetary  expenditure,  which  is  composed  of 

grants, equity  participation, soft loans, and guarantees, is the preferred way 

of  financing  aid  in  the  European  Union.  This  holds  particularly  for  Spain, 

Austria  and  Ireland,  where  all  aid  is  financed  through  the  budget,  and 

Finland,  Luxembourg, the  United  Kingdom  and  Portugal, where  more  than 

90%  is  financed  through  the  budget.  In  contrast,  tax  expenditure,  i.e.  tax 

rebates  and  tax  deferrals,  is  used  to  a  large  extent  in  Italy,  France  and 
Belgium. 

18 

Objectives  of aid 

25.  Aid to the  manufacturing  sector  is also  classified  according  to the  principal 

purposes for which it is given or the sector to which it is directed, as follows: 

Horizontal  objectives 

-  Research and  Development 

-  Environment 

- Small and medium-sized  enterprises 

- Trade 

- Energy saving 

- General  investment 

- Other objectives (mainly rescue and restructuring) 

Particular  sectors 

-  Shipbuilding 

- Steel 

- Other sectors 

Regional  objectives 

- Regions falling under Article 92(3)a 

- Regions falling under Article 92(3)c 

- (Only for Germany)  Berlin and Zonenrand aids. 

The classification  of aid is, in many cases, somewhat arbitrary  because  it is 

necessary to decide which of the objectives declared by a Member  State  is 

to  be considered  as the  primary  objective.  In some  Member  States, aid for 

research  and  development  is  administered  through  sector  specific  R&D 

programmes,  in  others  aid  to  particular  sectors  is  limited  to  small  and 

medium-sized  enterprises,  etc.  Furthermore,  primary  objectives  cannot 

give a true picture of the final beneficiaries: a large part of regional aid is in 

fact  paid  to  small  and  medium-sized  enterprises,  aid  for  research  and 

development goes to particular sectors, and so on. 

Consequently,  conclusions  about  changes  from  one  objective  to  another 
over  time  and,  notably,  conclusions  about  differences 
in  objectives 
between  Member  States  can  only  be  drawn  with  caution.  The  following 
Table  8 gives  the  breakdown  of  aid to the  manufacturing  sector  according 

19 

to  objectives  during  the  period  1994-1996,  and  Table  9  indicates  the 

changes over time for the three main objectives pursued by the EUR 12. 

26. 

It  can  be  seen  from  the  percentages  presented  in  Table  8  that  56%  of 

industrial  aid  in the  Union  is spent  on  regional  objectives. Amongst  these 

aids,  it appears from the data that eight and a  half out of every ten  ECUs 

are  going to areas where  the  living conditions  are  particularly  low, the so-
called  Article  92(3)a  regions11.  The  regions  which  benefit  most  from  this 
category of aid are located in Germany, Greece, Ireland and Italy as can be 

seen  from  the  high  percentages  for  this  aid  objective  in  these  Member 

States. 

27.  Aid  granted  for  horizontal  objectives  is  ranked  second.  Amongst  these, 
support for  research  and  development12  is given  highest  priority. Although 
aids for such horizontal objectives may in many cases be in the Community 

interest,  they  present,  nevertheless,  the  drawback  that  their  impact  on 

competition  is  often  difficult  to  assess  because  little  or  no  information  is 

available  about their sectorial and  regional  repercussions. This  is the case 

notably  in  their  extreme  form  as  general  investment  schemes  where  the 

objectives  are  so  poorly  defined  that  no general judgement  can  be  made 

and  the  Commission  is  bound  to  examine  all  major  cases  of application. 

With regard to the functioning  of the  internal market, the existence of such 

general  schemes  was  therefore, 

increasingly  difficult  to  justify  and 

consequently the grant of such aid was  prohibited. Whilst the Commission 

exercises a general ban on export aid, programmes which provide soft non-

product related  aid are generally found to be compatible with the common 

interest.  Moreover  they  are  usually  established  to  support  SME's.  This 

category  also  comprises  some  aid  that  complies  with  the  conditions  laid 

down in the OECD consensus for officially supported export credits. 

28.  Some  13%  of  industrial  aid  in  the  Community  are  spent  on  particular 

sectors. Having been virtually  phased  out in the  previous period under the 

strict Steel Aids Code of  1991,  the Commission, starting in 1994  has taken 

decisions  under Article 95  ECSC that allow aid to flow into the steel sector 

for major restructuring, as witnessed by the figures for 1994-1996. 

11 
12 

A list of these regions is given  in Annex I, point 9.2. 
For the reasons explained  in Annex I, point  11.1, the R&D figures  contained  in Table 6 are certainly 
underestimated. 

20 

29.  The  situation  in  each  Member  State  as  regards  the  overall  composition  of 

aid to the manufacturing sector is as follows: 

In  Belgium, horizontal aid which  has  increased  during the  period  under 

review  forms  the  majority  of  spending  (46%)  which  is  far  above  the 

average  in the  European  Union. The  increase  is  accounted  for  by  one 

single scheme, for which the Belgian government  must seek  repayment 

and  which,  at  the  time  of  such  repayment,  will  be  withdrawn  from  the 

figures. SMEs are the most notable  horizontal objective. Sector  specific 

aid  (29%)  is quite  high whilst  regional  aid  (25%)  is  relatively  high for a 

geographically  compact Member State without any 92(3)a regions. 

In  Denmark,  the  largest  proportion  of  aid  is  horizontal  (84%)  and 
comprises  essentially  aid for  energy  saving,  environmental  protection 
and  R&D  aid.  The  sector  specific  aid  (14%) 
is  mostly  aid  to 
shipbuilding. Regional policy at 2% is not significant. 

In  Germany,  horizontal  aid  accounts  for  19%, which  is  low  compared 

with the average in the European Union. Almost two thirds of this aid is 

spent  on  research  and  on SMEs.  Sector  specific  aid  (7%)  is also  low. 

The  most  important  item  is  regional  aid  (75%), the  overwhelming  part 

of  which  consists  of  92(3)a  aid  for  the  New  Lander  (including  aid 

granted  via 

the  Treuhandanstalt/BvS).  This  aid  has  decreased 

considerably  in  absolute  terms  when  compared  with  the  previous 

period reviewed. 

In  Greece  -  the  figures  are  considered  too  unreliable  for  detailed 

comments. 

In  Spain,  24% of the  aid  is  spent  for  horizontal  objectives,  mainly  for 

SMEs  and 

for  research  and  development.  Sector  specific  aid 

represents  63%  of  total  aid  to  the  manufacturing  sector,  constituting 

thus  the  highest  proportion  of  aid  directed  to  specific  sectors  in  the 

Community.  With  13%,  regional  aid  is  low  for  a  country  where 

presently  54% of the population live in 92.3a regions. 

In  France,  51%  of  the  manufacturing  sector  aid  has  horizontal 
objectives.  15%  of  the  volume  of  aid  is  directed  to  specific  sectors, 

21 

although  in certain cases for  R&D or in the form of parafiscal levies13. 
Regional policy accounts for 34% of the aid. 

In Ireland, regional aid (56%) still forms the bulk of spending although 

it  has  decreased  considerably  from  the  previous  period  reviewed. 

Horizontal  objectives  attract  37%  of  spending  while  7%  goes  to 

particular  sectors.  As  far  as  the  decrease  in  Ireland's  share  of  total 

Community  the  manufacturing  sector  aid  is  concerned,  attention  is 

drawn to the point raised under Conceptual Remarks, p. 4-5. 

In  Italy,  horizontal  aid  accounts  for  31%. The  most  important  aid 

category  is  regional  aid  (58%).  Almost  all  regional  aid  goes  into  the 

92(3)a  regions of the country, the Mezzogiorno. Sectorial aid accounts 

for  11%. 

In Luxembourg, the most important item is regional aid (65%) which is 

very high for such a compact country, followed by aid to SMEs  (21%) 

and aid to R&D (7%). 

In the Netherlands, horizontal aid (74%)  is by far the biggest  item and 

considerably  larger  than  the  average  in the  European  Union.  Within 

horizontal  aid, energy  saving  and  R&D  absorb  most. Aid to  particular 

sectors represent  10% of total aid to manufacturing. As with Belgium, 

regional aid (17%)  is relatively  important for a geographically  compact 

Member State without any 92(3)a regions. 

In  Portugal,  sector  specific  interventions  at  52%  are  high.  "Other 

objectives"  almost  exclusively  absorb  aid  for  horizontal  objectives 

(24%). The  latter ones are mostly cofinanced  by the  Commission and 

are more akin to the  regional aid given in 92(3)a  regions because the 

whole territory  of  Portugal, as with  Ireland  and  Greece,  is considered 

by the Commission as constituting a 92(3)a region. 

In Finland, 74%  of the aid is spent on horizontal objectives,  mainly on 

R&D and SMEs. Spending on particular sectors, at 2%, is the lowest in 

the Community. Regional aid accounts for 23% of total aid. 

13 

Parafiscal  levies  are  taxes  specific  to  a  sector  which  are  used  to  finance  certain  operations  in  that 
sector. 

22 

In Sweden, 34% of the aid is spent on horizontal objectives, mainly on 

SMEs and R&D. Sector specific spending is low at 4%.  Regional aid at 

61%  accounts for the bulk of the spending. 

In the  United  Kingdom, regional aid (59%) forms the  biggest group of 

support.  A  considerable  part  of  the  aid  is  spent  in  Northern  Ireland 

which is a 92(3)a  region.  Horizontal aid accounts for 22% of which aid 

to  R&D  is  the  main  item.  Sectorial  aid  totals  19%  of  aid  to  the 

manufacturing sector 

In Austria,  horizontal  aid  forms  by far  the  largest  group  of spending, 

with R&D, environment and SMEs being the main beneficiaries. Sector 

specific spending  is on par with the Community average.  Regional aid 

is low at 13%. 

23 

Table 8 

State aid to the manufacturing sector 1994 -1996 
Breakdown of aid according to sector and function 

SECTORS /  FUNCTION 

AU 

B 

DK 

D 

GR 

E 

FIN 

F 

IRL 

I 

L 

NL 

p 

s 

UK 

per cent 

EUR 
15 

Horizontal  Objectives 

74 

46 

84 

19 

31 

24 

74 

51 

37 

31 

33 

74 

24 

34 

22 

30 

Research & Development 
Environment 
SME 
Trade 
Energy saving 
General  Investment 
Other  Objectives 

19 
16 
13 
0 
1 
0 
24 

10 
0 
21 
4 
0 
0 
11 

29 
10 
5 
7 
34 
0 
0 

Particular  Sectors 

13 

29 

14 

Shipbuilding 
Other sectors 

0 
13 

2 
27 

10 
4 

Regional  Objectives 

13 

25 

Regions under 92(3)c 
Regions under 92(3)a 
Germany:Berlin/Zonenrand) 

10 
3 
0 

25 
0 
0 

2 

2 
0 
0 

7 
1 
5 
0 
2 
0 
4 

7 

4 
3 

2 
0 
2 
15 
0 
2 
12 

3 

0 
3 

7 
1 
10 
0 
1 
0 
4 

63 

20 
43 

35 
2 
21 
10 
4 
0 
2 

2 

0 
2 

28 
1 
6 
11 
1 
0 
5 

15 

1 
14 

6 
0 
17 
3 
1 
0 
10 

7 

0 
7 

3 
0 
6 
9 
1 
0 
12 

11 

2 
9 

7 
5 
21 
1 
0 
0 
0 

2 

0 
2 

20 
10 
8 
3 
31 
0 
3 

4 
0 
0 
0 
2 
0 
19 

10 

52 

7 
3 

4 
48 

11 
5 
16 
0 
3 
0 
0 

4 

0 
4 

12 
0 
4 
5 
0 
0 
1 

9 
1 
7 
3 
2 
0 
7 

19 

13 

1 
18 

4 
10 

74 

66 

13 

23 

34 

56 

58 

65 

17 

24 

61 

59 

56 

3 
69 
2 

0 
66 
0 

9 
4 
0 

23 
0 
0 

22 
12 
0 

0 
56 
0 

.1 
57 
0 

65 
0 
0 

17 
0 
0 

0 
24 
0 

61 
0 
0 

36 
23 
0 

7 
48 
1 

TOTAL 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

24 

Table 9 

State aid to the manufacturing sector 1992 -1994 and 1994 -1996 
Breakdown to main objectives 

Horizontal Objectives 

Particular Sectors 

Regional Objectives 

1 9 9 2-
1994 

1994-
1996 

1992-
1994 

1994-
1996 

1992-
1994 

1994-
1996 

per cent 

Austria 
Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

United  Kingdom 

EUR 15 

56 

73 

14 

53 

38 

70 

36 

35 

29 

76 

23 

32 

31 

74 
46 

84 

19 

31 

24 

74 

51 

37 

31 

33 

74 

24 

34 

22 

30 

19 

26 

6 

20 

43 

11 

0 

12 

0 

5 

36 

16 

11 

13 
29 

14 

7 

3 

63 

2 

15 

7 

11 

2 

10 

52 

4 

19 

13 

26 

1 

80 

27 

19 

19 

63 

53 

70 

19 

41 

53 

58 

13 
25 

2 

74 

66 

13 

23 

34 

56 

58 

65 

17 

24 

61 

59 

56 

30.  As  regards  the  development  over  time  of  the  distribution  of  the 

manufacturing  sector  aid  amongst  the  different  main  objectives,  it  can  be 

seen  from  Table  9  that  at  the  level  of  the  EUR  12,  aid  for  horizontal 

objectives has fallen from 40% in 1988-90 (see Fourth Survey on State aid in 

the European Union) to 35% in 1990-92 (see Fifth Survey on State aid in the 

European  Union), and  31% in  1992-94,  and then stabilised, for  EUR  15, at 

around 30% in 1994-1996. The proportion of regional aid has remained high, 

while sector specific interventions has risen slightly. 

The  apparent  gradual  move  from  horizontal  objectives  to  sectorial 
interventions,  is  a  cause  for  some  concern  given  the  potentially  distortive 
effect  of sectorial aid.  Of course  both  horizontal  and  sectorial  categories  of 
aid can be used for more or less hidden and unwanted purposes of industrial 
policy  (support  of single  companies  as  national  champions  or  protection  of 
sectors which are allegedly of vital national interest) and  have  a  particularly 

25 

negative effect  upon competition. However,  horizontal aid given to all sectors 

of  the  economy  is  less  suitable  for  the  protection  of  certain  sectors  or 

national champions than sector specific  interventions. 

State aid given on an ad-hoc basis 

31.  Table  10 shows  that  as was  already  the  case with the  previous  survey,  that 

high volumes  of aid continued to  be granted  on an ad  hoc basis to  individual 

enterprises.  This  type  of  aid  falls  outside  schemes  promoting  horizontal, 

sectorial or regional objectives. In the sectors manufacturing, financial services 

and  air  transport  taken  together,  a  limited  number  of  individual  aids  of 

important  volume  are  thus  responsible  for  a disproportionate  part  of  total  aid 

granted.  Ad  hoc  aid, which  is  granted  mainly  for  rescue  and  restructuring  of 
companies,  increased  in  volume  from  6%  in  1992  to  16%  in  1996.  If  aid 

granted  to  the  new  German  Lander  via  the  Treuhandanstalt  is  added  - such 

aid can be considered  close to ad hoc aid - the share in overall aid  increased 

from 19 to 29 percent. 

26 

Table 10 

State aid on an ad-hoc  basis and Treuhand aid awarded in the manufacturing, 
financial services and air transport sectors in the Member States in the years 1992 to 
1996 

1992 

1993 

1994 

1995 

1996 

in 
MECU 

i n% 
of total 
aid 

in 
MECU 

i n% 
of total 
aid 

in 
MECU 

In 
MECU 

i n% 
of total 
aid 

in 
MECU 

i n% 
of total 
aid 

i n% 
of total 
aid 

Ad-hoc aid 

2422 

6 

5742 

13 

6922 

16 

5776 

14 

5888 

16 

Treuhand aid 

5161 

13 

8854 

20 

11013 

25 

6682 

16 

4839 

13 

Total aid 

39062 

100 

44800 

100 

43466 

100 

41732 

100 

37677 

100 

Table 11 

State aid on an ad-hoc basis awarded in the manufacturing, financial services and air 
transport sectors  in the Member States - annual averages 1992-1994 and  1994-1996 

1992 

-1994 

1994-1996 

in MECU 

in percent 

in MECU 

in percent 

Austria 

Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

United Kingdom 

EUR  12/15 

0 

31 

0 

686 

75 

473 

0 

1663 

53 

1864 

0 

0 

184 

0 

0 

0 

1 

0 

14 

1 

10 

0 

33 

1 

37 

0 

0 

4 

0 

0 

65 

29 

0 

584 

44 

1088 

0 

2532 

58 

1453 

0 

0 

365 

0 

0 

1 

0 

0 

10 

1 

18 

0 

41 

1 

23 

0 

0 

6 

0 

0 

5029 

100 

6218 

100 

27 

German  State aid to the new Lander 

32.  During the period under review, the  process of reorganising the economy of 

the  new  Lander  of  Germany  continued.  The  reunification  of  Germany  is of 

particular  importance  for  Community  State  aid  policy.  The  transition  from a 

centrally  planned  economy  under  State  control  typified  by  insufficient 

infrastructure  and  uncompetitive  enterprises,  to  a  decentralized  market 

economy  based essentially  on private  initiative  and the  need to develop the 

economy  -  could  not  be  achieved  without  considerable  financial  transfers 

from the old into the new Bundeslânder. 

It  was  therefore  unavoidable  that  the  integration  of  the  centrally  planned 

East  German  economy  into  the  internal  market  had  to  be  facilitated  by 

substantial amounts of national aid. During the period under review, a yearly 

average  volume  of  almost  13,5  billion  ECU  was  granted 

in  aid  to 

manufacturing  in the  new  Lander. This, although  on high level, is a marked 

decline  in comparison with  1992-1994,  where  15,5  billion  ECU  were spent. 

The  decline shows that the main repercussions  on State aid of restructuring 

the economy of the new Lander occurred  in the previous period. In addition, 

this reduction is accompanied  by an even sharper decrease  in aid to the old 

German  Lander which has fallen from 8,9 billion ECU  in 1990-1992  and 4,3 

billion ECU in 1992-1994 to a low of only 3 billion ECU in 1994-1996. These 

substantial  reductions  show the  commitment  of the  German  government to 

shift its efforts to the new Lander without increasing the overall level of aid in 

Germany. Whereas  in 1990-1992  the old  Lander absorbed  53  percent of all 

aid to manufacturing  in Germany, they only  received  19 percent  of the total 

in the period under review. The breakdown into the different forms of the aid 

to the new Lander is given in Table A3 in Annex II. 

In  the  context  of  privatising  the  former  state-owned  companies,  aid  during 
the period under review was also granted via the Treuhandanstalt  (THA), the 
State holding company set up to administer, adapt, and privatize former East 
German  public  undertakings,  and  its  successor,  the  Bundesanstalt  fur 
vereinigungsbedingte  Sonderaufgaben 
in  the 
Commission's decisions of  1991, 1992  and  1995  on the  interventions of the 
THA,  some  of these  interventions  may  constitute  aid. This  was  usually the 
case  where  the  THA  issued  guarantees  for  loans  granted  by  the  banking 
sector at market rate to its generally  poor-ranking  undertakings. Equally, the 

laid  down 

(BvS).  As 

28 

THA 

itself  borrowed  at  market  rate  and  then  awarded 

loans  to  its 

undertakings at the same rate. 

In  the  case  of  the  THA/BvS,  the  Commission  is  of  the  opinion  that  the 

method  used  for  the  assessment  guarantees  and  loans  (see  Annex  I) 

undervalues their aid element in the period covered by the Sixth Survey. 

In  the  period  covered  by  the  present  Survey  including  1996  when  normal 

state  aid  rules  applied  guarantees  totalling  ECU  2776  million  and  loans 

amounting to a total of ECU  13484 million were given. Based on its previous 

experience, the Commission is of the opinion that 20% of these amounts can 

be  regarded  as  aid,  which  are  included  in  the  Survey.  In  addition,  grants 

totalling  ECU  4097  million  in order to finance  social  plans were  included  in 

their totality. 

29 

PART II - OVERALL NATIONAL AID IN THE MEMBER STATES 

Aid  to sectors  other than the manufacturing  sector 

33.  The  following  gives  an  overview  of  State  aid  granted  in  the  agriculture, 

fisheries,  transport  -  railways  and  airlines  -,  financial  services  and  energy 

(coal mining)  sectors  on the  basis of available  information. The totality  of aid 

awarded  in these sectors together with that discussed  in Part  I of this  Survey 

would constitute the overall national State aid reported by the fifteen  Member 

States.  Unfortunately,  due  to  the  fact  that  some  Member  States  have  not 

been  able to  supply  complete  information  in all of these  sectors,  particularly 

agriculture, the overall amount  is not a sufficiently  viable figure and therefore 

interpretation of data given in this section must be made with utmost caution. 

Aid to  agriculture 

34. 

In sectors such as agriculture where a highly developed  Community  policy  is 

in  operation,  the  limits  for  granting  State  aid  are,  to  a  greater  extent, 

determined  by this  common  policy.  Thus,  although  Articles  92-94  of  the  EC 

Treaty  apply  in  principle  to  agriculture  as  to  other  sectors  of  the  economy, 

Article 42 specifies that the extent to which these articles apply to  agriculture 

should  be  decided  by  the  Council.  Hence  the  Council  has  limited  Member 

States' freedom to grant State aid in certain areas of policy: 

(i) 

Support  of markets  in most  agricultural  products  (Council  Regulations 

governing the common market organisations). 

Aid,  using  exclusively  Community  (i.e.  EAGGF)  resources,  is  payable 

only  on  the  basis  of  Council  rules  which  provide  inter  alia  for  a 

common system of intervention  buying and export  refunds and, further 

to the  reform decisions  of  May  1992, compensatory  aid in the  various 

sectors for price reductions  in conjunction with compulsory  set-aside. 

(ii) 

Support  for  improving  farm  structure  (Council  Regulation  (EEC)  No 

2328/91). 

30 

Aid  concerning  productive  investments  on  agricultural  holdings  is 

determined to a large extent by the provisions of the  above-mentioned 

Council Regulation and partly Community cofinanced. 

The  reporting  situation  in  the  field  of  agriculture  is  unsatisfactory.  Several 

Member  States  have  failed  to  deliver  to  the  Commission  comprehensive 

information  on their  aid expenditure  in this  sector.  Until the  Fourth  Survey, 

the  Commission,  when  faced  with  this  situation,  made  extrapolations  and 

estimates  in order to  close the gaps.  In the  previous  Survey  (5th)  as  in the 

present  Survey,  in contrast, the gaps  are  left  intact  and only  available  data 

are used for the two periods  1992-1994 and  1994-1996. 

Taking  account  of  the  data  situation,  Table  12  relates  total  State  aid 

(including  the  national  contribution  to  the  socio-structural  measures  under 

(ii)  above)  in  respect  of products  listed  in Annex  II of the  EC Treaty  -  plant 
and  livestock  production  and  primary  processing  activities  - to  gross  value 

added  of agricultural  production  at the  level  of the  holding.  It will  be  noted 

that  national  aid  taken  into  account  in  this  table  applies  to  a  broader 

spectrum  of activities than the  base  retained for  gross valued  added.  Data 

covering  the  whole  reporting  period  were  available  from  two  Member 

States,  whilst  data  covering  only  a  part  of  the  period  were  available  from 

five others. No data were available from the  remainder. 

31 

Table 12 

National aid in respect of products listed in Annex  II of the EEC Treaty 
As a percentage of gross value added of agricultural  production  In 1992-1994, 
1994-1996 

per cent 

1992-1994 

1994-1996 

Austria 
Belgium 

Denmark 

Germany 
Greece 
Spain 

Finland 

France 
Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 
Sweden 

United Kingdom 

EUR  15 

9,6 

5,2 

27,3 
N.A. 
N.A. 

2,7 
N.A. 

N.A. 

N.A. 

5,0 

7,6 

7,0 

N.A. 

N.A. 
6,8 

2,8 

12,4 
N.A. 
N.A. 

N.A. 

N.A. 
N.A. 

N.A. 

N.A. 

4,0 

N.A. 
N.A. 

2,9 

N.A. 

*  German  agriculture  aid figures  include  aid  in the  form  of VAT  concessions  (VAT  plus  per 
hectare  aid)  awarded  in  compensation  for  price  reductions  flowing  from  agri-monetary 
changes.  Of  the  total  shown,  some  10-percentage  points  of  gross  value  added  are 
accounted for by this aid. 
This  table  should  be  read  in  conjunction  with  point  34  (above)  and  point  III.10.2  of  the 
Technical Annex. 

It may be noted that the concept of total national aid encompasses  individual 
categories  of aid, which  may present differing  levels of  relevance  in terms  of 

competition  policy.  Therefore,  it  may  be  argued  that  aid  for  measures  such 

as  productive  investment  and  publicity  is  more  likely  to  potentially  have  an 

effect  upon trade than aid which is destined simply to compensate  operators 

for  services  rendered,  for  example,  access  to  the  countryside  and  aid  to 

offset  the  financial  burden  of  natural  disasters.  A  broadly  similar  argument 

might  apply  to  aid  financed  by  certain  parafiscal  taxes  where,  though  such 

aid  from  a  legal  viewpoint  is considered  as  State  aid, the  economic  burden 

falls exclusively  upon the beneficiaries themselves. 

32 

Further,  it  should  be  noted  that  the  data  in  Table  12  do  not  provide  an 

accurate  picture  of  the  total  level  of  support  granted  to  agriculture  in  the 

Community  or in any  particular  Member  State. The annual publication  by the 

Commission  entitled  "The  Agricultural  Situation  in the  Community"  provides 

data inter alia on Community  aid for agriculture. 

In view of the above, no conclusions concerning the possible impact on trade 

from the data  in Table  12, or indeed from any data relating to global  volumes 

of aid in agriculture, can be drawn (see Annex  I, Section  III for details). 

Aid to fisheries 

35. 

In  the  fisheries  sector,  national  aids  closely  follow  the  development  of  and 

the 

limits 

imposed  by 

the  Common  Fisheries  Policy  (CFP) 

thereby 

contributing  to  the  realisation  of  common  objectives.  Any  conclusion  to  be 

drawn from the quantification  of national aids has, therefore,  not only to  take 

account  of their  impact  on competition  but also of their  impact  on  attaining  a 

common aim. 

Tables  13 and  14 show  national  aids  and  Community  intervention  in  favour 

of  the  Community's  fishing  fleet,  the  commercialisation,  and  first-stage 

processing of the products. 

33 

Table 13 

Aids  to fisheries in per cent of gross value added* in this sector, 
Calculated on the basis of quantities  landed and average prices 
In 1992-1994,  1994-1996 

1992-1994 

1994-1996 

per cent 

Austria 

Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Pays-Bas 

Portugal 

Sweden 

United Kingdom 

EUR  12/15 

3,0 

4,0 

13,2 

0,2 

6,0 

3,7 

9,3 

8,4 

8,9 

2,4 

4,1 

5,6 

2,0 

2,0 

14,6 

0,1 

3,0 

17,8 

4,1 

8,4 

8,4 

9,5 

2,2 

8,2 

3,2 

4,9 

Value added figures used exclude transformation  industry and on-shore production. 

Table 14 

Community  interventions  in the fisheries sector in the framework of the 
common organisation of the market and structural policy 1992-1996. 

1992 

1993 

1994 

1995 

1996 

Million ECU 

Guarantee 

32,1 

32,4 

35,5 

36,9 

34,1 

Guidance 

358,4 

401,8 

391,1 

471,1 

382,2 

34 

Aid to services 

36.  As explained  in the Conceptual Remarks, p.7, aid granted to the air transport 

and financial services sectors has been highlighted. 

Aid to the financial services sector 

37. 

In  contrast  with  the  above  downward  trend  in  aid  to  the  manufacturing 

sector,  aid  (mostly  ad-hoc)  that was  granted to  the financial  services  sector 

has  risen 

from  an  annual  average  of  340  MECU  in  1992-1994,  to  1270 

MECU  in the  latest  reporting  period.  Although  these  amounts  are  relatively 

small  when  compared  with  the  overall  aid  figures,  the  rapid  increase  and 

concentration  in a small  number  of  companies  in this sector  in one  country, 

means that  continued  vigilance  must  be exercised.  Strict  application  of the 

rescue  and  restructuring  guidelines  will  continue  and, the  contribution  of aid 

to the restructuring operations will be monitored closely. 

Aid to the air transport sector 

38.  Aid  (mostly  ad-hoc)  granted to the air transport  sector doubled from a yearly 

average of 660  MECU during the  period  1992-1994 to  1370 MECU in  1994-

1996;  a  rise  that  reflected  a  transient  phenomena  during  this  period. 

Previously  enjoying  protection, 

this  sector  has, 

following  gradual 

liberalization, been opened up to greater  market forces which has resulted in 

major  restructuring  programmes.  Aid  to  this  sector,  representing  only  1.5% 

of overall aid or 3% of aid to the manufacturing sector, has contributed to this 

restructuring  process  of the companies  concerned  and attenuated the  social 

consequences  caused  by  such  restructuring.  To  strengthen  its  control,  in 

1994 the Commission adopted strict guidelines on State aid to this sector. 

35 

Aid to railway transport 

39.  Table  15  shows  aid  to  railways  as  a  percentage  of  value  added  in  this 

sector.  Whilst  most  aid  is given to  compensate  for  the  imposition  of  social 

obligations or inherited liabilities on railways (Council Regulation  1191/69, as 

amended  by Council  Regulation  1893/91,  and  Council  Regulation  1192/69) 

aid  in percent  of value  added  remains  high.  However,  as  recent figures for 

value  added were  not always available  estimates were  used and, therefore, 

these figures should be interpreted with caution. 

36 

Table 15 

State aid to transport (Railways) in per cent of gross value added in inland 
transport services 1992 -  1994,1994 -1996 

1992-

-1994 

1994 

-1996 

per cent 

total aid 

of which 
Regulat. 
1191/2-69 

total aid 

of which 
Regulat. 
1191/2-69 

Austria 

Belgium 

Denmark* 

Germany* 

Greece* 

Spain* 

Finland 

France 

Ireland* 

Italy 

Luxembourg** 

Netherlands 

Portugal* 

Sweden 

40,5 

12,7 

40,1 

14,9 

23,1 

25,6 

8,5 

9,8 

87,3 

17,1 

6,8 

18,1 

3,7 

21,4 

0,4 

1,1 

5,2 

4,5 

3,1 

84,8 

8,2 

3,5 

United Kingdom 

6,8 

6,7 

13,0 

37,6 

10,5 

38,3 

15,4 

20,5 

1,4 

25,7 

6,7 

9,1 

34,8 

19,9 

5,6 

30,2 

9,2 

EUR  12/15 

25,2 

10,3 

29,4 

0,0 

14,1 

1,4 

11,3 

0,4 

0,0 

0,0 

0,0 

4,5 

2,8 

34,4 

2,0 

4,4 

0,0 

9,1 

7,2 

* Gross  value  added  was  not  available  for  all  countries  in  all  years.  Lacking  data  were 

estimated. 

**  A considerable part of the expenditure under Regulation 1192/69 in this Member State is 

for pensions. 

37 

Aid to coal mining 

40.  Table  16  gives  the  aid  to  coal  mining  divided  into  aid  not  going  to  current 

production  and  aid  granted  to  current  production.  The  latter  is  expressed  in 

ECU  per  person  employed  in the  manufacturing  sector  and  as  the  share  of 

the  total  aid  to the  sector.  The  general  trend  in the  two  main  coal  producing 

Member  States  is for  an  increase  in the  amount  of aid  per  person  employed 

compared  with the  previous  period. After  halting  all aid to  current  production 

during the  period  1990-1992 the  United  Kingdom saw a  minuscule  amount of 

aid  to  current  production 

in  1992-1994  and  1994-1996  as  draconian 

restructuring  of the  coal  industry  took  place  prior to  privatisation.  In  Belgium 

the  last  colliery  closed  in the  summer  of  1992  and  in  Portugal  at  the  end  of 

1994. 

Table 16 

State aid to Coal Industry 1992 -1994 and 1994 -1996 

Yearly ave 
not destine 
produc 
(inM 
1992-1994* 

rage of aid 
d to current 
;tion ** 
ECU) 

1994-1996 

Yearly average of aid destined to current 
production 

1992-
per 
employee 

(in ECU and per cent) 
1994* 

1994-1996 

in % of 
total 

per 
employee 

in % of 
total 

Belgium 

Germany*** 

Spain 

France 

Portugal 

United  Kingdom 

539 

3.745 

657 

2.212 

2 

286 

14.973 

52.096 

16.865 

13.800 

8.617 

237 

134 

236 

608 

2 

976 

3 

60 

44 

10 

75 

2 

_ 

58.383 

21.822 

9.848 

1.881 

575 

TOTAL 

7.420 

1.862 

34.096 

46 

41.328 

_ 

98 

76 

20 

26 

1 

77 

in 1995 prices 
Following Commission Decision 3632/93/ECSC, from 1994 figures on the financing 
of social benefits are no longer included by the Commission in its annual report on 
aid in this sector. 
The 1994 figures for aid to current production for Germany include an exceptional 
financial measure of DM 5 350 million to clear the debts of the compensation fund 
as they stood at the end of 1993. 

After  declining  in  the  previous  years,  the  share  of  aid  going  to  current 

production  rose  from  46%  of  the  total  aid  for  the  period  1992-94  to  77% 

during the  period  1994-96-(a  tendency  which  persists even  if the financing  of 

38 

social benefits had been included in the 1994 aid figures.)  The average aid, 

destined  to  current  production,  per  employee  in  the  manufacturing  sector 

has risen from 23 500 ECU in 1990-1992 to 34  000  ECU in 1992-94  and 41 

000  ECU  in  1994-1996.  This  is at  odds  not  only with the  objectives  of the 

restructuring and rationalisation of the Community coal industry but also with 

the establishment of the single market. 

Of the aid not going to current production, the majority  is to cover the social 

and  redundancy  costs  resulting  from  the  contraction  of  the  manufacturing 

sector.  The  average  number  of  employees  in the  sector  had  decreased  to 

132.000  in 1996 from 153.000 in 1994, compared with 215.500  in 1992 and 

270.000  in  1990,  with  important  recent  decreases  in  Germany  and  the 

United Kingdom being offset by recent increases in Spain. 

In the case of Germany and Spain a coal reference price system has been in 

operation  for  a  number  of  years  which  keeps  domestic  prices  net  of 

subsidies considerably above world market prices. Although such a measure 

has  an  effect  equivalent  to  an  aid,  the  usual  indicators  that  are  shown  in 

Table  16  cannot  reflect  it.  Therefore,  the  figures  should  be  taken  as  an 

overview and not an accurate indicator of the protection afforded by aid. 

The  new Community framework  Decision 3632/93/ECSC  on State aid to the 

coal industry has tightened the definition of aid to cover: 

-  any  direct  or  indirect  measure  or  support  by  public  authorities  linked  to 

production, marketing and external trade which, even if it is not a burden on 

public  budgets,  gives  an  economic  advantage  to  coal  undertakings  by 

reducing the costs which they would normally have to bear; 

- the  allocation, for the  direct  or  indirect  benefit  of the  coal  industry,  of the 

charges rendered compulsory as a result of State intervention; 

- aid elements  contained  in financing  measures taken  by Member  States in 

respect  of  coal  undertakings,  which  are  not  regarded  as  risk  capital, 

provided to a company under standard market-economy practice. 

To  increase  transparency,  Member  States  are  also  required  to  enter  aid in 
their  "national,  regional  or  local  budgets  or  channelled  through  strictly 
equivalent mechanisms" after a transitional period not exceeding December 

39 

1996.  All  aid  received  by  coal  undertakings  has  to  be  shown  together  with 
their  profit  and  loss  accounts  "as  a  separate  item  of  revenue,  distinct  from 
turnover" from  1994 onwards. 

Finally,  operating  aid  is defined  as "the difference  between  production  costs 

and the selling price freely agreed between the contracting parties in the  light 

of  the  conditions  prevailing  on  the  world  market".  The  new  Decision 

stipulates  that  "arrangements  existing  at  31  December  1993,  under  which 

aid was granted  in conformity with the provisions of Decision  2064/86/ECSC 

and  which  are  linked  to  agreements  between  producers  and  consumers, 

exempted  under  Article  85(3)  of  the  EC  Treaty  and/or  authorised  under 

Article  65  of the  ECSC  Treaty,  must  be  modified  by  31  December  1996"  to 

bring them  into  line with  the  provisions  of the  new  Decision  3632/93/ECSC. 

For  some  Member  States,  this  will  result  in  an  increase  in  aid  amounts  as 

the coal reference price systems are abolished. 

41.  For  both  railways  and  coal the observed  aid amounts  are  high.  Competition 

between  coal  industries  has  been  stifled;  the  impact  of  these  aids  on  the 

wider  markets  in transport  and energy  cannot  be ignored. As these  markets 

are  becoming 

integrated  with 

the  completion  of 

the  single  market, 

competition  is  becoming  increasingly  important.  The  declared  will  of  the 

Community  to  open  up the transport  and the energy  markets  render  a  strict 

aid  control  policy  by  the  Commission  in  these  sectors  more  and  more 

important.  The  Survey  will,  in  future,  have  to  contain  data  on  forms  of 

transport  other than  railways and forms of energy other than coal  in order  to 

provide a basis for the full assessment of the impact of aids in these sectors. 

In the transport sector,  however, the assessment of distortions of  inter-modal 

competition  is  made  more difficult  by the question  of imputing  infrastructure, 

environmental, and surveillance costs. 

Volume of overall  aid in the Community 

taking  due  account  of 

42.  The  volume  of  State  aid  in the  Community,  given  in the  sectors  covered  by 
the  (regrettably  continuing) 
this  survey  and 
incompleteness  of  data  for  reasons  described  above,  amounts  on  average 
over the period  1994-96 to almost 84 billion ECU, as can be seen from Table 
17.  Because  of  missing  data  on  most  Member  States'  expenditure  in  the 
agricultural  sector,  figures  on aid in this sector  have been  removed from  the 
overall  total.  The  total  aid  amounts  are  therefore  underestimated  and  the 

40 

figures  presented  in  this  Survey  are  not  comparable  with  those  presented 
previously. 

Table 17 

Overall national aid in the Member States 1992 -1994 and 1994 -  199614 

1992-1994 

1994-1996 

Million ECU 

Overall national aid 
of which: 

- Manufacturing sector 
-Agriculture 
- Fisheries 
- Services 
-Coal 

87.962 

41.439 
NA 
356 
32.375 
13.792 

83.655 

38.318 
N.A. 
301 
36.555 
8.481 

Table  18  shows  Member  States'  total  aid  expenditure  as  a  percentage  of 

gross  domestic  product,  per  person  employed,  and  relative 

to 

total 

government  expenditure.  Because  of  the  omission  of  data  on  aid  to 

agriculture,  the  ratios  are  underestimated  and  not  comparable  with  those 

presented in previous surveys. 

14 

The totals include no figures  on aid given to the agricultural  sector. 

41 

Table 18 

Overall national aid in the Member States 1992 -1994 and 1994 -1996  in per cent of 
GDP, per person employed and relative to government  expenditure. 

In per cent of GDP* 

In ECU per person 
employed 

In per cent of  total 
Government 
Expenditure 

1992-1994 

1994-1996 

1992-1994 

1994-1996 

1992-1994 

1994-1996 

Austria 

Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

1,5 

0,9 

2,3 

1,3 

1,1 

1,2 

1,0 

2,2 

2,1 

0,6 

0,8 

United  Kingdom 

0,3 

0,6 

1,3 

0,9 

1,9 

1,1 

1,2 

0,4 

1,1 

0,8 

2,0 

1,0 

0,7 

0,9 

0,7 

0,5 

829 

467 

1.132 

260 

362 

641 

335 

781 

1.269 

343 

150 

121 

325 

735 

481 

978 

253 

392 

214 

574 

312 

754 

623 

379 

162 

346 

170 

2,8 

1,5 

4,5 

2,4 

2,4 

2,3 

2,3 

4,0 

4,6 

1,1 

2,0 

0,8 

1,1 
2,4 

1,4 

3,7 

2,4 

2,5 

0,7 

1,9 

2,1 

3,8 

2,2 

1,2 

2,1 

1,1 

1,1 

EUR 15 

1,5 

1,4 

631 

573 

2,9 

2,6 

1992-1994, in 1995 prices 
*  As  figures  on  aid  to  agriculture  have  been  omitted  from  the  overall  aid  totals,  the  GDP 
figures  have  been  adjusted  correspondingly  by  subtracting  the  value-added  for  the 
agricultural sector from these. 

42 

Budgetary  impact of aids 

43. 

In Belgium, the financing of State aid is equivalent to 33% of the high budget 

deficit  and  amounts  to  4,0%  of  GDP  in  1994-96.  In  Germany,  where  the 

budget  deficit  in  1994-96  was  3,0%  of  GDP,  the  financing  of  State  aid  is 

equivalent  to  59%  of  the  deficit  for  the  period.  Finally,  in  Italy,  where  the 

annual budget deficit  is around 7,9% of GDP in  1994-96, the financing of the 

overall  aid  amount  accounts  for  26%  of  the  deficit.  Compared  with  the 

preceding  period,  there  has  only  been  a  marginal  decrease  in  the  budget 

deficit  in  Italy  while  the  share  of  the  deficit  necessary  for  financing  the  aid 

has  increased.  For  the  reasons  explained  above,  the  overall  aid  figures  for 

all Member States are underestimated, resulting in an underestimation  of the 

ratio of the financing of aid to the budget deficit. 

44.  Table  19 shows  a  breakdown  of  overall  national  aid  into the  main  sector  of 

the  economy.  Due to  the  lack  of data  in agriculture, the  indication  can  only 

be taken as a rough approximation. 

43 

Table 19 

Overall national aid in the Member States 1992 -1994  and 1994 -1996 
Broken into main sectors. 

Overall State Aid in the Member States 

per cent 

Manufacturing 

Fisheries 

Services 

Coal 

TOTAL 

1992-
1994 

1994-
1996 

1992-
1994 

1994-
1996 

1992-
1994 

1994-
1996 

1 9 9 2-
1994 

1994-
1996 

1 9 9 2-
1994 

1994-
1996 

Austria 
Belgium 
Denmark 
Germany 
Greece 
Spain 
Finland 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Sweden 
United  Kingdom 

0 
30 
46 
50 
74 
28 
0 
35 
50 
58 
21 
38 
69 
0 
47 

41 
42 
56 
49 
68 
42 
88 
29 
55 
58 
35 
32 
52 
23 
35 

0 
0 
1 
0 
0 
2 
0 
0 
3 
1 
0 
2 
1 
0 
1 

0 
0 
1 
0 
0 
1 
1 
0 
3 
1 
0 
2 
1 
1 
1 

0 
52 
52 
27 
26 
44 
0 
48 
47 
41 
79 
60 
29 
0 
43 

59 
58 
44 
34 
32 
37 
11 
65 
42 
41 
65 
66 
47 
77 
42 

0 
18 
0 
23 
0 
26 
0 
17 
0 
0 
0 
0 
1 
0 
10 

0 
0 
0 
17 
0 
20 
0 
6 
0 
0 
0 
0 
0 
0 
23 

0 
100 
100 
. 100 
100 
100 
0 
100 
100 
100 
100 
100 
100 
0 
100 

100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

EUR 15 

47 

46 

0 

0 

37 

44 

16 

10 

100 

100 

44 

RESULTS 

45.  With the  publication  of this  Sixth  Survey  on  State  aid  in the  European  Union, 

the  Commission  and  the  Member  States  reaffirm  their  commitment  to  a 

continuing  high  level  of  transparency  in  the  field  of  public  support  to  the 

economy.  The  document  contains  a  detailed  analysis  of  the  volumes  of 

national  aid,  broken  down  into  the  different  forms  and  the  various  objectives 

pursued  by  Member  States.  The  data  collected  and  analysed  serve  the 

Commission,  by  making  available  a  sound  statistical  basis,  in  its  continuous 

endeavour to improve its State aid policy. The Survey serves, furthermore, the 

Community  in the wider  international  context  by  reflecting,  in  a coherent  and 

transparent  way, the determined will  of the  Community  to  eliminate  distorting 

aid that  is incompatible with the  internal  market  and to  keep overall aid  levels 

under control. It thus  underlines  the  Community's  commitment  to a free world 

market. 

46.  As  regards  aid to the  manufacturing  sector the figures  lead to the  conclusion 

that  the  aid  awarded  in  the  European  Union  has  returned  to  the  modest 

downward trend in the overall levels of aid observed  in the past. The findings 

of  the  previous  survey  that  indicated  a  halt  in  this  downward  trend  would 

thus  appear  to  have  been  an  exception  to  the  historical  tendency.  The  aid 

awarded  to  the  manufacturing  sector  in  the  15  Member  States  in  1994-96, 

amounts  to  an annual  average  of  some  38,3  billion  ECUs.  For the  EUR  12 

the  corresponding  figure  is  37,5  billion  ECUs  compared  with  41,4  billion 

ECUs in 1992-1994. 

The  disparities  between  the  different  countries  in  the  award  of  aid  remain 

large.  In terms  of aid to the  manufacturing  sector  in  per  cent  of  value  added 

the highest aid level observed  is nine times the  lowest aid level. It should also 

be  noted that the decrease  of the  overall  volume  of  aid to  the  manufacturing 

sector for the EUR 12 is in fact due to decreases in aid levels seen in Germany 

-where  the  decrease  is  considerable-,  France,  Greece,  Italy,  Luxembourg, 

45 

the  Netherlands  and  Portugal being offset to some extent by increases  in aid 

observed in Belgium, Denmark, Spain, Ireland and the United Kingdom. 

When considering the overall differences  in the Community under the aspect 

of  cohesion,  however,  the  observed  trend  now  appears  to  be  slightly  more 

promising  than  the  one  identified  in  the  previous  survey,  where  a  direct 

comparison  between  the four  largest  Member  States  and the four cohesion 

countries  - Greece,  Spain,  Ireland  and  Portugal -  revealed  that  the  relative 

importance of industrial support was rising in the larger Member States at the 

expense  of the  cohesion  countries. The  volume  of aid  in the  four  cohesion 

countries  is  increasing  from  6,5  to  8,8%  of  total  aid  to  the  manufacturing 

sector  in the  EUR  12 whilst the share  of the four  big economies  of this aid, 

having  been  at  around  88%  in  the  period  1992-1994,  has  decreased  to 

around 83% in 1994-1996 (Germany accounts for 44%,  Italy for 26%, France 

for  10% and the U.K.  for 4% of the EUR  12 total). Nonetheless the apparent 

slightly  more  positive trend  in the increased share of the cohesion countries 

is in fact largely accounted for by one ad hoc aid  in Spain as well as by the 

fact that aid levels in one large Member State have considerably decreased. 

Budgetary  expenditure  is  the  preferred  form  of  awarding  State  aid  to  the 

manufacturing  sector  in  all  Member  States.  This  is  to  be  welcomed  in  the 

sense  that  financing  through  the  budget  is  more  transparent  than  the 

alternative of financing through the tax system. 

As to the  objectives  pursued, a slight  increase,  although  on  low  level, of the 

share  of  sectorial  aid  in  overall  manufacturing  aid  can  be  observed.  This 

causes  some  concern  as  aid to single  companies  or whole  branches  of the 

manufacturing sector are amongst the most distortive for competition. 

47.  As was the case already with the previous survey, the most marked trend can 

be observed  in the continuing  high volume of aid granted on ad  hoc basis to 

individual  enterprises, falling  outside schemes  promoting  horizontal, sectorial 

or regional objectives.  In the sectors manufacturing, financial services and air 

transport  taken  together,  a  limited  number  of  individual  aids  of  important 

46 

volume are responsible for a disproportionate part of total aid granted. Ad hoc 

aid,  which  is  granted  mainly  for  rescue  and  restructuring  of  companies, 

increased  in volume from 6%  of overall aid to these sectors in 1992 to 16% 

in 1996.  If aid granted to the new German Lander via the Treuhandanstalt is 

added  - such  aid  can  be  considered  close  to  ad  hoc  aid -  the  share  in 

overall aid increased from 19 to 29 percent. 

48.  As  regards overall national aid to the economy, the figures,  in so far as they 

are  available  to  the  Commission,  confirm  the  conclusion  of  the  previous 

Surveys that the volume of aid in the Community remains at a very high level. 

It should  not  be forgotten  in this overall  context that Article  92(1)  of the  EG 

Treaty, the basis of the Commission's State aid policy, contains a general ban 

on aid and that State  aid  is only approved where one of the derogations set 

out in Article  92  applies. The  Commission, of course, approves  aid for many 

purposes where these are deemed to be in the common interest. Examples of 

such aid for which the Commission has clearly a favourable view include R&D, 

SME,  training, environmental  protection  and  regional  aid.  However  it cannot 

be denied that the  piling  up of State  aid  interventions  risks to jeopardise the 

efficient functioning of the Single market. 

47 

CONCLUSIONS 

49.  The  previous  surveys  that  the  Commission  published  on  the  aid  volumes 

awarded  by the  Member  States  of the  European  Union to their companies, 

showed a slight and continuing downward trend of the overall level of aid to 

the manufacturing  sector. This tendency was interrupted  in the period  1992-

1994  when  a  stable  tendency  in  the  overall  volume  of  aid  prevailed.  The 

data,  upon  which  the  Sixth  Survey  is  based,  now  suggest  a  return  to  the 

downward  trend  observed  in  the  past.  Whilst  it  will  only  be  possible  to 

confirm this return to the long term downward trend in future, the decrease in 

aid  to  the  manufacturing  sector  during  the  period  1994-1996  is welcome. 

However  it  is  undeniable  that  with  an  annual  average  of some  38,3  billion 

ECUs  representing  3,0  per cent of value  added  in the manufacturing  sector 

or more than 1200 ECUs per person employed, state intervention remains at 

a very  high level in this sector.  This clearly cannot be in line with the global 

objectives  of  the  European  Union. 

The  Cardiff  European  Council 

emphasized the need to promote competition and to reduce distortions such 

as state aid. 

In  the  face  of  increasing  globalisation  and  worrying  reports  that  Europe  is 

constantly falling behind its main trading partners in competitiveness  Europe 

needs  to  realise  the  full  potential  of the  Single  market.  The  observed  high 

levels of State aid put this at risk. Not only does the excessive aid distort free 

competition and free trade, but it also has the potential of delaying and even 

preventing  industrial  restructuring  where  it  is  urgently  needed.  Yet  free 

competition, free trade  and  rapid  industrial  restructuring  constitute  precisely 

the  instruments for the  efficient  allocation  of resources within the  European 

economy, which in turn  is the very foundation  of increased  competitiveness 

and therefore job creation. 

Added to these  obstacles for the creation of an efficient  European economy 

is the fact that the  high public expenditure  on State  aid is financed through 

taxes.  It  is  widely  acknowledged  that  the  high  level  of  taxation  in  the 

Community  risks  to  suffocate  private  entrepreneurship  and  therefore  the 

48 

creation  of  new  enterprises  needed  to  provide  new  jobs  for  Europe's  idle 

resources.  Moreover,  with  most  of  European  governments  running  not 

inconsiderable  budgetary  deficits,  partially  due  to  the  financing  of the  high 

expenditure  on State aid, they constantly  need to resort to borrowing on the 

European  capital markets, thereby  crowding  out potentially  more productive 

private investment. 

The  observed  reduction  of the  high  levels  of  manufacturing  aid  during  the 

period  under  review  shows  that  control  in  this  sector  has  become  more 

effective.  The  continuing  high  level  indicates,  however,  that  the  pressure 

must be  maintained. This is all the more necessary since  in the forthcoming 

Economic and Monetary  Union the sensitivity of companies towards aid that 

benefits their  competitors will be  increased. With the  adoption  of the single 

currency, Member States can no longer resort to exchange rates as a shock-

absorber;  in this  new  environment  it  is to  be  expected  that  companies  will 

increasingly  turn  to their  governments  to  provide  such  shock-absorption  by 

way of the tax system and direct subsidies. This poses an acute threat to the 

accomplishment  of  the  Single  market.  Therefore  the  need  for  the 

Commission  to  control  State  aid  strictly  and  for  Member  States  to exercise 

rigorous self discipline remains. 

50.  The  situation  described  above  and  the  changing  global  context  can  only 

increase  the  Commission's  action  in  State  aid  control.  This  is  notably  the 

case  with the  adoption  of the  new  Guidelines  for  regional  aid  in  December 

1997  which  meet  the  need  for  stricter  control  of  State  aid  in the  European 

Union and contribute to cohesion and a balanced  regional development as a 

major  Community  objective  The  new  guidelines  are  aimed  at  reducing  the 

areas  eligible  for  national  regional  aid  and  at  the  same  time  lowering  the 

whole  range  of  allowed  maximum  aid 

intensities.  Aid  will  thus  be 

concentrated  in those  regions where  its supportive  effect  is the  highest and 

distortions of competition will simultaneously  be reduced.  It is expected that 

this will contribute to decrease the overall volume of regional aid. 

49 

Furthermore, 

the 

tendency  of  Member  States, 

faced  with  budgetary 

restrictions,  to  concentrate  the  available  resources  for  their  regional  aid 

schemes  on  a  few  large  investments  equally  induced  the  Commission  to 

introduce a possibility to better control such cases which are likely to cause the 

most  important  distortions  of  competition.  The  criteria  that  will  be  applied  for 

the  examination  of  those  cases  are  to  be  found  in  the  so-called  "multi-

sectorial" framework, which will be operational as from September 1998. 

51.  As  a  result  of  liberalisation  in the  context  of the  Single  Market,  technological 

change and globalisation, many sectors are facing increased competition  both 

from  within  the  EU  and  from  outside.  These  sectors  must  adapt  promptly  to 

changing  market  conditions.  Most  companies  are  doing  this  without  state 

intervention.  Some  companies  that  are  unable  to  adapt  will  disappear.  State 

support  to  keep  an  ailing  company  in  business,  even  if  it  restores  the 

company's viability, can impose a heavy cost in terms of forgone  opportunities 

to  use  the  resources  in  ways  which  contribute  more  to  competitiveness  and 

thus  to  economic  growth  and the  creation  of stable  employment.  State-aided 

restructuring,  often  the  precursor  to  privatisation, follows  different  time  cycles 

that  depend  on  the  sector  and  Member  State  concerned. Whilst  data  on  ad 

hoc aid, which  comprises  all big  restructuring  cases, presented  in this  Survey 

suggest that aid for  restructuring  in the manufacturing  sector  has now  passed 

its  peak  the  future  trend  in  this  and  other  sectors  will  have  to  be  followed 

closely.  Even  if  part  of  this  type  of  aid  contributes  to  attenuate  the  social 

consequences  of the  accelerated  adjustment  process  in  certain  sectors,  it  is 

equally  indispensable  that  such  aid  be  rigorously  limited  to  the  levels 

necessary  for  the  restructuring  and  ensures  the  long  term  viability  of  the 

beneficiary  companies  in such a way that further aid would  not be  necessary. 

Only  then  can  the  employment  maintained  by  these  aids  be  considered  as 

actually safe. 

If these conditions are not met, aid awarded for the rescue and 

restructuring  of  companies  risks  delaying  and  even,  preventing  industrial 

restructuring  and  thus  actually  destroying  work  places  in  the  long  run. 

Therefore  the  Commission  thinks  that  it  is  necessary  to  limit  more  strictly  aid 

granted  for  the  rescue  and  restructuring  of  companies  in difficulty  and to  this 

50 

end is currently finalising its proposal for new, stricter guidelines on rescue and 

restructuring aid. 

52. 

In the context of the Economic and Monetary Union, one of the key elements 

underpinning  its  successful  operation  is  healthy  public  finances  of  the 

Member  States  participating  in  it.  Budgetary  discipline  implies that  Member 

States  should  keep  every  area  of government  expenditure,  including  State 

aid,  under  constant  review.  In  view  of  this  it  is  imperative  that  Member 

States,  by their  own  initiative,  evaluate  both existing  aid schemes  and  new 

proposals to verify that, firstly, government intervention is needed; secondly, 

that  State  aid  is  the  most  appropriate  instrument  for  achieving  the  policy 

objective  concerned;  thirdly,  that  the  aid  is  accurately  targeted  on  the 

problem to  be  solved; and, fourthly,  that  the  amount  of the  aid  is  no  more 

than  necessary  to achieve  the  objective. 

In  line with the  above  mentioned 

conclusions  of  the  Cardiff  European  Council,  the  Commission  intends  to 

consult  the  Member  States  about  the  possibility  of  implementing  a 

coordinated strategy for selective reductions in state aids. 

53.  A strengthened control policy also calls for further increases in transparency. 

The Commission continues to emphasise the importance of the standardised 

annual reporting system that allows the Commission to have a clearer picture, 

inter-alia,  of  the  regional  and  sectorial  impact  of  the  different  forms  of 

government  support  to  the  manufacturing  sector,  notably  in the  case  of aid 

with a  horizontal objective. The Commission will therefore take the  necessary 

steps to ensure full compliance with this reporting obligation. 

51 

ANNEX I 

TECHNICAL ANNEX 

The  purpose  of  this  annex  is  to  outline  the  methodologies  and  sources  used  in 
order to produce this Survey on State aid, notably with regard to: 

Scope of the study 
Fields excluded 

II. 

Categories, forms and objectives of aid 

III. 

Type of data, sources and methods of assessing the aid element 

IV. 

Specific  problems 

Research and Development  (R&D) 
Transport in  Luxembourg 
Tourism; Agri-foodstuff 
Training and  unemployment 

Accession  of 
reporting period 

the 

three  new  Member  States  during 

the 

52 

I. Scope of the Study 
Fields excluded 

1. 

This Technical Annex  explains the  methodological  background  and the 
statistical techniques  used. It updates  the technical  annex  used for  the 
preceding  Survey. 

The  Survey focuses  on State aid to enterprises  falling within the  scope 
of  Articles  92  and  93  EC  Treaty  and  Article  95  ECSC  Treaty. 
Accordingly, general measures (which, if they distort competition, would 
be dealt with under Article  101 of the EC Treaty) are not included  in the 
figures. 

2. 

The following  measures or areas are not dealt with: 

2.1. 

Aid whose  recipients are not enterprises 

Aid to  households 
Aid to the  handicapped 
Aid for infrastructure  (roads, ports, airports, etc.) 
Aid for university  institutes 
Aid for public vocational training  centres 
Aid given directly to developing  countries 

2.2. 

General measures and other  measures 

Differences  between the various tax systems and general social 
security  systems  in  Member  States  (depreciation,  social  security 
deficit, etc.) 
Quotas,  public  procurement,  market 

restrictions, 

technical 

standards 

Specific  tax  schemes  (co-operatives,  owner  enterprises,  self-
employed, etc.)15 
General  reduction  in  VAT  (for  example,  foodstuffs  in  the  United 
Kingdom/certain products in the French overseas  Departments)16 

2.3. 

Aid granted by supranational and multinational  organisations 

Community funds (ERDF, EAGGF, etc.) 
Financing  by EIB and EBRD 
Support to the European Space Agency 

15 

16 

However,  a  lower-than-the-standard  rate  of  corporation  tax  for  small  businesses  constitutes  an  aid 
and has been  included  (e.g. Germany). 
Specific  reductions such as the reduction of VAT for  all products manufactured  in Berlin have been 
included.  In  contrast,  all  goods  (regardless  of  origin)  sold  in  the  DOM  pay  a  lower  rate  of  VAT. 
This has not been  included  as an aid. 

53 

2.4. 

Individual types of aid 

Defence (see point  11.2 of this annex) 
Aid  to  energy,  except  coal  (see  points  10.2  and  11)  and  aid  for 
energy saving and alternative (renewable) energy 
Aid to transport, except  railways  (see point  10.2), and the  aviation 
sector covered  under section 2.1.9.: Other Objectives. 
Training and unemployment  measures (see point 14) 
Press and media 
Buildings and public works 
Public  utilities  such  as  gas, water,  electricity,  telecommunications 
(tariff structure and financing) 

II. Categories, forms and objectives of aid 

3. 

Categories of aid 

All  aid  represents  a  cost  or  a  loss  of  revenue  to  the  public  authorities 
and a benefit to  recipients. However, the "aid element",  i.e. the  ultimate 
financial  benefit  contained  in the  nominal  amount transferred,  depends 
to  a  large  extent  on  the  form  in which  the  aid  is  provided. Aid  should 
therefore  be  subdivided  in  accordance  with  the  form  in  which  it  is 
provided.  Four  categories  have  been  identified  for  this  purpose.  Each 
category  is represented  by a letter: A,  B, C, or D, followed either  by the 
number  1  or  2,  meaning  respectively  budgetary  aid  (i.e.  aid  provided 
through the central government  budget) or tax relief (i.e. aid granted  via 
the  tax  system),  plus  an  A  if  the  aid  element  is  known;  for  example, 
C1A refers to the aid element (A) of a soft loan (C1). 

4. 

4.1. 

GroupA(A1+A2) 

The  first  category  (A)  concerns  aid  which  is  transferred  in  full  to  the 
recipient.  In other words, the aid element is equal to the capital value of 
the  aid.  This  first  category  has  been  subdivided  into  two  groups 
depending  on whether  the  aid was  granted through  the  budget  (A1)  or 
through the tax or social security system (A2). 

4.2. 

List of aid coming  under categories A1 and A2 

Grants 
Interest subsidies  received directly by the recipient 
General research and development schemes (see point 11) 
Tax  credits  and  other  tax  measures,  where  the  benefit  is  not 
dependent  on  having  a  tax  liability  (i.e.  if  the  tax  credit  exceeds 
the tax due, the excess amount is repaid) 

54 

Tax  allowances,  exemptions,  and  rate  relieves where  the  benefit 
is dependent on having a tax liability 
Reduction in social security contributions 
Grant  equivalents  e.g.  sale  or rental of public  land or  property  at 
prices below market value 

5. 

5.1. 

Group B1 

It  is necessary  to determine  whether  a financial transfer  by the  public 
authorities in the form of equity participation is an aid to the recipient or 
a  matter  of  the  public  sector  engaging  in  a  commercial  activity  and 
operating  like  a  private  investor  under  normal  market  conditions. 
Consequently,  although  equity  participation,  in  their  various  forms, 
could have been included in the first category, they have been grouped 
together under a separate category  (B1). The aid element contained in 
such equity participation is set out in category B1A. 

5.2. 

List of aid coming under category B1 

Equity participation in whatever form (including debt conversion) 

6. 

6.1. 

Group C (C1+C2) 

The third category  (C) covers transfers  in which the aid element  is the 
interest  saved  by the  recipient  during  the  period  for which the  capital 
transferred  is at his disposal. The financial transfer takes the form of a 
soft loan (C1) or tax deferral (C2). The aid elements  (C1A/C2A)  in this 
category are much lower than the capital values of the aid. 

6.2. 

List of aid coming under categories C1 or C2 

Soft  loans  (new  loans  granted)  whether  from  public  or  private 
sources.  (The  transfer  of  interest  subsidies  is  categorised  under 
A1) 
Participatory loans from public or private sources 
Advances repayable in the event of success 
Deferred 
depreciation, etc.) 

free  or  accelerated 

tax  provisions 

(reserves, 

7. 

7.1. 

Group D1 

The  last  category  (D1)  covers  guarantees,  expressed  in  nominal 
amounts guaranteed. The aid elements (D1A) are normally much lower 
than the  nominal amounts, since they  correspond to the  benefit which 
the  recipient  receives  free  of charge  or  at  lower than  market  rate  if a 
premium is paid to cover the risk. However, if losses are incurred under 
the  guarantee  scheme,  the  total  loss,  net  of  any  premiums  paid,  is 

55 

included  under  D1A, since  it can  be  considered  as  a definitive  transfer 
to  the  recipient.  The  nominal  amounts  of these  guarantees  are  shown 
under D1 to give an indication of the contingent  liability. 

7.2. 

List of aid coming  under category  D1 

Amounts covered  under guarantee schemes  (D1) 
Losses  arising  from  guarantee  schemes,  net  of  premiums  paid 
(D1A) 

For  information  on  the  calculation  of  the  aid  element  contained  in  the 
different forms of assistance, see point  10.6. 

9. 

9.1. 

Objectives of aid 

The  aid  schemes  have  been  broken  down  into  19  headings  accon 
to their sectorial or functional objectives: 

1.1. 
1.2. 

2. 
2.1. 
2.1.1. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.7. 
2.1.8. 
2.1.9. 

2. 
2.2. 
2.2.1. 
2.2.2. 
2.2.3. 
2.2.4.1. 
2.2.4.2. 
2.2.5. 

3. 
3.1. 
3.2. 

Agriculture 
Fisheries 

Manufacturing/Services 
(Horizontal  objectives) 
Research and  Development 
Environment 
Small and Medium  Enterprises 
Trade 
Energy  saving 
General  Investment 
Combat  unemployment}  see point  14 of 
Training Aid 
Other  objectives 

}  this annex 

Manufacturing/Services 
(Particular  sectors) 
Steel 
Shipbuilding 
Transport 
Coal (Current  Production) 
Coal (Other Aid) 
Other  Sectors 

Regional aid 
Regions  under 92(3)a 
Other  regions 

56 

The  heading  3.:  "Regional  aid  "  contains  for  Germany  three 
subheadings:  aid  to  Art. 92(3)a  regions  which  comprises  the  new 
Bundeslander, Art. 92(3)c  regions  and to the  former  Zonenrandgebiet 
and West-Berlin. 

In the  coal  sector,  a  distinction  is made  depending  on whether  or not 
aid  is  linked  to  current  production  (such  a  link  is  made  by  the 
Commission in its annual communication to the Council on the financial 
aids in this sector). 

9.2. 

List of regions within the meaning of Article 92(3)(a)17 
Member State 

Regions 

Greece 
Ireland 
Portugal 

Austria 

Germany 

Spain 

France 

Italy 

) the 
) whole of the 
) country 

Burgenland 

Berlin (Eastern Part) 
Brandenburg 
Mecklenburg-Vorpommern 
Sachsen 
Sachsen-Anhalt 
Thuringen 

Galicia 
Asturias 
Cantabria 
Castilla-Leon 
Castilla-La Mancha 
Extremadura 
Comunidad Valenciana 
Andalucia 
Murcia 
Ceuta y Melilla 
Canarias 

Overseas departments 

Campania 
Sud 
, Sicilia 
Sardegna 

United Kingdom 

Northern Ireland 

17 

OJ EC no. C 212 of 12.08.1988, pages 2 to 10 and subsequent changes. 

57 

III. Type of data, sources and methods of 
assessing the aid element 

10. 

As  a  general  rule, the figures  have  been  expressed  in terms  of  actual 
expenditure  (or actual  revenue  losses  in the case of tax  expenditure).18 
Where  this  was  not  possible,  budget  appropriations  or  the  amounts 
provided for  in planning  programmes  were  used after  consultation  with 
the  Member  States  concerned.  Where  figures  were  not  available 
previous figures have, unless otherwise stated, been extrapolated. 

10.1. 

All the figures  have  been compiled  in national currency  and  have  been 
converted  into  ECUs at the  annual average exchange  rate provided  by 
the Statistical Office of the European Communities. 

The following  statistical  data  used  in the  survey  have  been taken  from 
the  EUROSTAT  database  NEWCHRONOS.  A  minor  number  of 
unavailable  data  have  been completed with  statistics from the AMECO 
database managed by DG II of the Commission or with best estimates. 

gross domestic product (GDP) at market price 
gross value added at market price 
general government total expenditure 
statistics on civilian employment 
intra-EC exports of industrial products under No's 5 to 8 of the 
CTCI, rev. 3. 

10.2. 

their 
The  Commission's  departments  have  provided 
respective sectors  in accordance with the following  outlines.  Not all the 
figures  have  been  counter-checked  by  the  Member  States  nor  have 
they  been  checked  against 
their  budgets  by  the  Commission's 
departments. 

figures 

for 

For  agriculture  and  fisheries  the  figures  are  those  submitted  by  the 
Member  States  in  accordance  with  the  procedure  emanating  from  the 
resolution  of  the  Representatives  of  the  Governments  of  the  Member 
States during the 306th Session of the Council on 20 October 1974. 

As  regards  agriculture  however,  no data  at all have been submitted  by 
Spain,  Finland,  Ireland, Italy,  Luxembourg,  Sweden  and Austria  for  the 
period  under  review.  Moreover,  figures  were  only  available  up to  1992 
for  Greece  and  France,  up  to  1993  for  Portugal  and  up  to  1995  for 
Denmark, Germany and the United Kingdom. 

From  the  total  amount  of  budgetary  expenditure  indicated  in  the 
inventory,  the  following  have  been  excluded:  research  aid,  land 

18 

It has to be stressed  that  the yearly  expenditures  (commitments)  are not necessarily  identical  to the 
yearly budgetary appropriations  for an aid scheme. 

58 

improvement  (drainage),  social  security  measures  applicable  to  the 
entire  sector,  income  tax  concessions,  regional  selective  financial 
assistance. 

The  figures  contain  the  following:  grants,  tax  relief,  aid  financed  by 
parafiscal charges, interest subsidies and a  number of benefits  in kind 
provided by the State (for example, training courses). 

In  the  fisheries  sector,  for  1995  and  1996  data  were  available  for 
Germany,  Spain,  France,  Ireland,  Italy,  Finland,  Sweden  and  the 
United Kingdom. 

Loans  and  guarantees  are  not  included  where  the  aid  element  is 
unquantifiable. 

For  coal  the  figures  are  those  submitted  by  the  Member  States  in 
528/76/ECSC, 
accordance  with  Commission  Decision  No.s 
2064/86/ECSC  and  3632/93/ECSC  and  summarised 
the 
in 
Commission's  Annual  Communication  to  the  Council  on  aids  in  this 
sector19.  New  capital  injections,  which  may  constitute  aid,  are  not 
included 
figures.  Public  undertakings'  coal-purchasing 
contracts (for example, for electricity generation) which might comprise 
an aid element where the price exceeds the world price have not been 
included. 

in  these 

For transport (Railways) the figures are those submitted by the Member 
States  in accordance with Council  Regulation  No  1107/70.  In addition, 
but  shown  separately,  are  the  aids  given  for  railways  within  the 
framework  of  Council  Regulation  1191/69  as  amended  by  Regulation 
the 
1893/91  and  Council  Regulation  1192/69 
maintenance  of  public  service  obligations  and,  the  normalisation  of 
railways' accounts due to special burdens placed on railways. 

for  respectively 

With  regard to other forms of transport  except  aviation, due to  lack of 
information, the  aid figures  are  incomplete  and fragmentary  and  have 
not  been  included.  In  particular  no figures  have  been  given for  aid to 
local transport. 

10.3. 

Manufacturing 
In  the  case  of  aid  to  the  manufacturing  sector,  the  figures  have 
generally  been  taken  from  notifications  under  Article  93  and  from 
information  submitted  within  the  context  of  the  standardised  annual 
reporting  procedure  set out  in the  Commission  letter  of 22.02.1994  to 
letter  of 
the  Member  States  and  up-dated  by  the  Commission 

19 

These  figures  are  broken  down  into  aid  for  current  production  and  those  not  relating  to  current 
production  (i.e. special  social  security  measures  for  miners  and  aid to cover  inherited  liabilities). 
However  since  1994  figures  on  the  financing  of  social  benefits  are  no  longer  included  by  the 
Commission in its annual communication on aid in this sector. 

59 

02.08.1995  to  the  Member  States.  Furthermore,  data  are  checked 
against  national  publications  on  the  award  of  aid,  national  accounts, 
draft budgets and other available sources. 

10.4. 

10.5. 

Steel 
The  figures  presented  in the  study  have  been  compiled  from  the  steel 
aid  monitoring  reports  prepared  by  the  Commission  for  the  Council. 
The figures show the amount of aid granted to undertakings. 

Tax  expenditure 
With  regard  to  tax  expenditure,  the  OECD  concept  was  used  as  a 
starting  point. 

"A tax expenditure  is usually defined  as a departure  from the  generally 
accepted  or  benchmark  tax  structure, which  produces  a favourable tax 
treatment of particular types of activities or groups of taxpayers". 

Thus, for example, tax  reliefs granted to certain development  areas  i.e. 
to  only  a  part  of  the  territory  of  the  tax  authority,  are  regarded  as  tax 
expenditures, whereas the rate.structure is regarded as an integral  part 
of the benchmark tax system. 

However,  in some  cases, such departures from the  benchmark  system 
are  on  the  borderline  between  aid  within  the  meaning  of  Article  92(1) 
EC  and  general  measures.  Further work  has to  be carried  out  in order 
to elucidate this "grey area". 

10.6. 

Methods of assessing the aid element 

10.6.1. 

In  order  to  analyse  the  different  forms  of  aid  on  a  fully  comparable 
basis;  it  is  necessary  to  reduce  them  to  a  common  denominator  -  the 
grant  element  which  they  contain.  To  this  end  the  methods  currently 
employed  by  the  Commission  in  its  control  of  State  aid  have  been 
used. These  methods  are all official Commission  policy  and  have  been 
discussed at a technical level with the Member States. 

10.6.2. 

The  basic  approach  to  evaluating  the  aid  element  is  the  common 
method  of  evaluation  used  in  calculating  the  net  grant  equivalent  of 
state  interventions  (for  latest  update  see  annex  of  the  Commission 
guidelines on national regional aid schemes, OJ C 74 of  10.03.1998. 

Obviously,  the  receipt  of  an  aid  may  change  the  tax  liability  of  some 
recipients.  However,  taking  account  of  the  allowances  and  reductions 
that  can  be claimed  against  profits tax  and the  losses  made  by  certain 
companies,  the  effective  rate  of  tax  paid  in  general  by  companies  is 
much 
it  is 
lower  than  the  theoretical  maximum  rate.  Therefore 
considered  that  the  results  obtained  without  taking  account  of  taxation 
are  closer  to  reality  than  if  the  maximum  theoretical  rate  had  been 
employed. The  common  denominator  is therefore  grant  equivalent  and 
not net grant equivalent. 

60 

Method applied to different forms of aid 

10.6.3.  Group A - grants, relief from taxes and social charges, etc. 

No  calculations  of the  aid  element  are  necessary  because  this group 
comprises  all  interventions,  which  can  be  considered  as  constituting 
grants or grant equivalents. 

10.6.4.  Group B - equity (including debt conversion). 

line  with  established  Commission  policy,  such 

interventions 
In 
constitute  aid  when  a  private  investor  operating  under  normal  market 
conditions  would  not  have  undertaken  such  an  investment.  See 
Commission  communication  "Application  of Articles  92  and  93  of  the 
EEC  Treaty  and  of Article  5  of  Commission  Directive  80/723/EEC  to 
public  undertakings  in  the  manufacturing  sector",  OJ  No  C 307  of 
13.11.1993, p320. This method is based on calculating the benefit of the 
intervention to the recipient. 

Where  a  Commission decision does  not establish the aid element  and 
where  data  provided  by  a  Member  State  does  not  indicate  the  aid 
element,  15% of the total participation is taken as the aid element. This 
proxy was only resorted to in a few cases and has no significant impact 
on the results. 

10.6.5.  Group C - soft loans and deferred tax provisions. 

In  accordance  with  the  common  method  of  evaluation,  benefits 
accorded to an enterprise over a period of time in the form of soft loans 
and  deferred  tax  provisions  are  discounted  back  to  the  present.  The 
discount  rate is the "reference  rate" which represents the rate at which 
companies  can  borrow  under  normal  market conditions.  The  definition 
of the reference  rate in each Member State has been formally adopted 
by the Commission (see point 14 of the common method of evaluation). 
The  aid  element  in  a  soft  loan  in  any  one-year  is,  therefore,  the 
difference  between  the  reference  rate  and the  rate  at which the  State 
accords the  loan  multiplied  by the value of the  loan. The  aid  elements 
(C1A/C2A)  in this  category  are  much  lower than the  capital  values  of 
the aid. Starting in 1995, where a Member State fails to provide data on 
the  aid  elements,  15%  of the  total  amount  lent  by the  government  is 
taken as the aid element, compared with the old practice of taking 33%. 
This downward  adjustment  is explained  by the generally  lower  level of 
the aid element  due to generally  lower  rates of interest  in the  Member 
States  when  compared  with  periods  covered  by  previous  surveys. 

20 

See  also  "Application  of  Article 92 and 93 EEC to public  authorities' holdings", Bulletin  EC  9-1984, 
further  "The Measurement  of the Aid  Element of State Acquisitions of Company  Capital"  -  IV/45/87 
Evolution  of Concentration  and Competition  Series, Collection  : Working Papers 87. 

61 

These  proxies  were  only  resorted  to  in  a  few  cases  and  have  no 
significant  impact on the  results 

In  the  case  of  participatory  loans  the  net  cost  was  calculated  as  the 
difference  between  the  rate  of  return  effectively  received  by  the  state 
on these participatory  loans and the reference rate. 

In the case of reimbursable  advances, where a Member State does  not 
indicate the reimbursement  ratio, the aid element is taken to be 90% as 
the  re-payment  ratio  has  shown  to  be  very  low  on  average.  Where  a 
Commission decision establishes the aid element, this is used. 

10.6.6.  Group D - amounts covered under guarantee schemes. 

For  ordinary  guarantee  schemes  the  aid  element  is  calculated  as  the 
benefit  of the  scheme  to  the  recipient.  The  aid  element  (D1A)  is  much 
lower  than  the  capital  value  guaranteed. Where  this  information  is  not 
available, the  losses to the  Government  are taken as an  approximation 
of the  aid  element.  Where  Member  State  data  only  contain  figures  on, 
the  capital  value  guaranteed,  but  not  the  annual  net  results  of  the 
scheme, then,  starting  in  1995, the  aid  element  is taken  to  be  10% of 
the capital value guaranteed21. This  proxy was only resorted to  in a few 
cases and has no significant  impact on the results. 

For  loans  awarded  under  exchange-rate  guarantee  schemes,  the  aid 
element  is  calculated  as  though  the  loan  was  a  soft  loan  in  the 
currency,  which  is guaranteed  against  exchange  rate fluctuations.  The 
aid  element  is  the  difference  between  the  reference  rate  for  the 
currency  which  is  covered  by the  guarantee  and the  rate  of  interest  at 
which  the  loan  is  given  less  any  charge  for  the  guarantee.  This 
calculation  is therefore  based  on  calculating  the  benefit  of the  scheme 
to the  recipient. 

10.7. 

Although  figures  for  loans  or  guarantees  from  publicly  owned  credit 
institutions  are  given  when  they  are  considered  as  constituting  aid, 
there  are  greater  difficulties 
identifying  and  quantifying  such 
interventions  than  for  other  forms  of  aid,  because  by their  very  nature 
they  are 
to  avoid  any  unwarranted 
In  order 
discrimination  with  respect  to  the  different  treatment  of  aids  in  these 
areas,  additional  work  as  to  identifying  and  quantifying  such  aid  will 
have to be done. 

transparent. 

less 

in 

21 

The percentage  is based on a corresponding  Member  States'  agreement  in shipbuilding 

sector. 

62 

IV. Specific  problems 

11. 

Research and Development  (R&D) 

11.1. 

R&D schemes 

Figures  including extra-mural Government funding of R&D  programmes 
for  nationalised  or  private  enterprises  are  classified  under  A1A22.  In 
view  of  the  global  nature  of the  sources  used,  it  has  not  always  been 
possible  to exclude  certain elements  of public  procurement  from  extra 
mural expenditure  (e.g. R&D contracts).  Because only direct funding  of 
R&D  has  been  included, it is considered  that the figures  for  R&D  have 
been  underestimated  (R&D  contracts  and  Public  Research  (see  11.2 
and  11.3 below)  have  been omitted  because  of the  inability  to  quantify 
the aid element in such interventions). 

11.2. 

R&D contracts 

Figures  for  research  and  development  contracts  have  not  been 
included  in  the  figures,  since  the  aid  element  is,  at  present,  often 
unquantifiable.  Furthermore,  the  sources  do  not  permit  research  and 
development  contracts  intended  specifically  for  military  purpose  to  be 
isolated  nor  the  impact  on  the  market  of  such  contracts  to  be 
evaluated23. 

11.3. 

Public  Research 

No  figures  are  given  for  any  aid  element  contained  in  the  intramural 
funding  of  government  or  public  research  establishments  or  research 
carried  out  by  institutes  of  higher  education.  Public  financing  of  R&D 
activities  by  public  non-profit-making  higher  education  or  research 
establishments  is  normally  not  covered  by  article  92  (1)  of  the  EC 
Treaty24. 

11.4. 

Nuclear energy 

Member  States  provide  aid  to  the  nuclear  energy  sector  through  the 
intermediary  of their  public  undertakings  or through the  intermediary  of 
R&D  financing  (mainly  in  the  form  of  R&D  contracts  and  public 
research).  Only  some  of  this  direct  financing  could  be  included  in  the 
figures  for  R&D  (2.1.1.)-  The  figures  on  nuclear  energy  contained  in 
R&D  figures  may  well  be  underestimated.  Since  the  R&D  figures 
exclude  R&D  contracts  and  public  research,  the  aid  element  of  such 
measures is difficult to quantify. 

22 
23 

24 

Accelerated depreciation for R&D equipment is not considered as an aid. 
See  point  2.5.  of  the  Community  framework  for  Research  and  Development  Aid,  OJ C  45  of 
17.02.1996. 
See point 2.4. of the Community framework  for Research and Development Aid,. 

63 

12. 

Transport in Luxembourg 

Transport  figures  appear  to  be  higher  in  Luxembourg  relative  to other 
Member  States  due  in  the  main  to  particularly  high  payments  for 
pensions of former railways employees. No further details are available. 

13. 

Tourism and Agri-foodstuff industries 

Due to a lack of information on these two sectors it is probable that the 
data included in the study are incomplete. 

14. 

Training and unemployment 

It  is  not  always  apparent  whether  certain  fiscal  or  social  security 
measures  constitute  aid  or  form  a  coherent  and  integral  part  of  the 
fiscal or social security system.  In addition,  incentive  schemes  exist in 
different  Member  States to stimulate or facilitate general training or the 
employment  of certain socially disadvantaged  groups of workers.  In so 
far as such schemes are not industry-specific  and are available  across 
the whole  economy,  and  in fact  genuinely  constitute  part  of a  general 
system  of  employment  measures,  they  are  not  to  be  considered  as 
State  aids.  Although  a  number  of  training  and  employment  schemes 
have  been  treated  by  the  Commission  as  State  aid,  not  all  Member 
States'  measures  in  these  fields  have  up  to  now  been  examined  in 
detail.  Because of the considerable  problems in delimiting  employment 
aids, particularly those concerning training, from general measures and 
in  order  to  present  figures  that  are  comparable  between  Member 
States,  no training  and  unemployment  measures  have  been  analysed 
in the present report. 

15. 

Accession  of  the  three  new  Member  States  in  the  middle  of  the 
reporting 
period 

For  reasons  stated  above,  when  comparing  the  different  Member 
States,  the  analysis  of  the  aid  figures  concentrates  on  the  annual 
averages  over  the  three-year-period  1994-96.  As  the  three  new 
Member  States  only  acceded  in  1995,  figures  for  these  countries  are 
only  available  for  the  years  1995  and  1996.  Consequently,  for  these 
countries  the  annual  average  of  1995  and  1996  is  presented  as  the 
annual average of the three-year-period  1994-96  in the tables. 

64 

ANNEX  II 

STATISTICAL ANNEX 

The methodology  used for the tables contained is explained in the Technical 
Annex. 

Table A1 

State aid to the manufacturing sector. Annual amounts of aid 1992-
1996 in current prices ^nd  national currencies. 

Table A2 

State aid to the manufacturing sector. Annual amounts of aid  1992-
1996 in current  prices and ECU. 

Table A3 

State aid to the new German Lander. 
Annual averages  1994-1996  in ECU. 

Figure A1 

State aid to the manufacturing  sector and Community  Social and 
Regional Funds. 
Annual averages  1994-1996 per employee in ECU. 

Tables 
A4/1-15 

Total State aid - annual average  1994-1996 by Member  State 

65 

Table A1 

State aid to the manufacturing  sector  in current  prices  1992-1996 

Austria 
Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

EUR 15 

EUR 12 

1992 

1993 

1994 

1995 

1996 

million national currency 

0,00 
25.176,37 

0,00 
33.401,28 

0,00 
43.252,04 

6.515,48 
39.572,04 

5.239,22 
50.178,02 

2.604,90 

4.440,55 

4.377,04 

4.903,38 

5.489,77 

29.501,46 

38.145,72 

38.803,33 

29.548,24 

24.612,29 

282.609,57 

131.376,92 

105.256,25 

263.163,64 

243.859,26 

135.610,43 

215.538,16 

240.391,09 

339.902,85 

449.050,07 

0,00 

0,00 

0,00 

2.287,91 

1.905,08 

32.438,84 

34.121,64 

26.615,98 

22.000,65 

24.461,03 

157,32 

169,30 

145,89 

159,90 

221,15 

19.061,76 

22.316,42 

19.139,58 

23.135,24 

20.109,41 

2.533,70 

1.426,23 

1.669,10 

1.371,57 

1.678,50 

1.407,29 

1.829,79 

1.517,34 

1.815,47 

1.389,66 

57.029,17 

74.759,41 

115.855,07 

54.728,23 

49.716,05 

United  Kingdom 

1.461,89 

895,77 

1.029,07 

0,00 

0,00 

0,00 

2.895,78 

1.233,70 

3.070,11 

1.516,38 

38.591,06 

36.705,27 

37.595,51 

42.736,85 

40.542,15 

37.385,71 

35.627,84 

Old German lander 
New  German lander 

9.820,84 
19.680,62 

7.040,21 
31.105,51 

6.071,91 
32.731,42 

5.827,60 
23.720,64 

5.975,71 
18.636,58 

66 

Table A2 

State aid to the manufacturing sector in current prices (ECU) 1992-1996 

Austria 

Belgium 

Denmark 

Germany 

Greece 

Spain 

Finland 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Sweden 

million ECU 

1992 

1993 

1994 

1995 

1996 

0,00 

605,30 

333,57 

0,00 

825,31 

584,78 

0,00 

494,26 

389,98 

1.090,67 

580,26 

1.026,46 

1.276,84 

669,13 

745,96 

14.602,44 

19.699,40 

20.162,60 

15.769,58 

12.889,12 

1.144,26 

1.023,27 

489,18 

365,44 

868,56 

1.445,36 

1.512,66 

2.085,29 

0,00 

0,00 

0,00 

400,79 

798,11 

2.793,50 

326,87 

4.736,71 

5.143,70 

4.043,38 

3.371,72 

3.767,29 

206,80 

211,64 

183,83 

196,07 

278,72 

11.947,05 

12.120,39 

9.994,24 

10.860,90 

10.265,35 

60,92 

626,96 

326,41 

0,00 

41,24 

630,55 

396,88 

0,00 

42,33 

652,05 

588,41 

0,00 

47,46 

722,92 

279,08 

310,31 

46,20 

649,45 

253,96 

360,56 

United Kingdom 

1.981,82 

1.148,44 

1.326,28 

1.488,55 

1.863,33 

EUR 15 

EUR 12 

38.591,06 

36.705,27 

37.595,51 

42.736,85 

40.542,15 

37.385,71 

35.627,84 

67 

Table A3 

German State aid to the new Lander - yearly average 1994-1996 

million ECU 

in per cent 

in per cent 
of total aid 

7.373,1 

1.964,0 

0,0 

3.418,1 

0,0 

691,9 

54,8 

14,6 

0,0 

25,4 

0,0 

5,2 

44,3 

11,8 

0,0 

20,5 

0,0 

4,2 

Grants 

Tax exemptions 

Equity  participation 

Soft loans 

Tax deferrals 

Guarantees 

TOTAL 

13.447,1 

100,0 

80,8 

During  the  years  of  1994  to  1996  aid  totalling  a  yearly  average  of  Ecu  13497 
million 
including  Treuhand  was  granted  to  the  new  Lander.  This  volume 
represents  8 1% of  all  German  aid  to  the  manufacturing  sector.  The  increase  of 
the  overall  volume  of  German  aid  resulting  from  granting  aid  to  the  new  Lander 
has  been  partially  compensated  by  a  decrease  of  the  aid  to  Berlin  and  to  the 
Zonenrand. 

68 

Figure A1 

Aid to the manufacturing sector and Community  Funds per employee 
Average  1994-1996 

3000 

2000 

ECU 

1000 J 

AU 

B 

DK 

D 

GR 

E 

FIN 

F 

IRL 

I 

L 

NL 

P 

S 

UK 

EUR 
15 

Regional/Social funds per employee 

r-.  Aid to industry per employee 

69 

Table A4/1 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

l.l.  Agriculture 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and  Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy saving 
2.1.6. General Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and  1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in% 

AUSTRIA 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
B1A 
N.A. 

CIA 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

0,0 

261,5 
66,7 
67,8 
54,3 
0,0 
5,8 
0,0 
0,0 
0,0 
66,9 

704,0 
6,8 
0,0 
655,8 
0,0 
0,0 
0,0 
0,0 
41,4 
0,0 
43,3 
37,8 
5,5 

1.008,9 
91,4 

353,0 
78,8 

0,0 

40,2 
17,8 
3,5 
2,8 
0,0 
0,0 
0,0 
0,0 
0,0 
16,1 

9,6 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
9,6 
0,0 
13,6 
8,1 
5,5 

63,4 
5,7 

63,4 
14,1 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

70 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

T O T AL  A ID 
TOTAL 
N.A. 

in% 

0,0 

0,0 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

0,0 
0,0 

28,4 
1,8 
0,2 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
26,5 

0,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,1 
0,0 
3,3 
0,0 
3,3 

31,8 
2,9 

31,8 
7,1 

330,1 
86,2 
71,4 
57,1 
0,0 
5,8 
0,0 
0,0 
0,0 
109,5 

713,7 
6,8 
0,0 
655,8 
0,0 
0,0 
0,0 
0,0 
51,1 
0,0 
60,2 
45,9 
14,3 

29,9 
7,8 
6,5 
5,2 
0,0 
0,5 
0,0 
0,0 
0,0 
9,9 

64,6 
0,6 
0,0 
59,4 
0,0 
0,0 
0,0 
0,0 
4,6 
0,0 
5,5 
4,2 
1,3 

330,1 
86,2 
71,4 
57,1 
0,0 
5,8 
0,0 
0,0 
0,0 
109,5 

57,9 
6,8 
0,0 
-
-
-
-
-
51,1 
0,0 
60,2 
45,9 
14,3 

73,6 
19,2 
15,9 
12,7 
0,0 
1,3 
0,0 
0,0 
0,0 
24,4 

12,9 
1,5 
0,0 
-
-
-
-
-
11,4 
0,0 
13,4 
10,2 
3,2 

1104,1 

100,0 

448,3 

100,0 

Table A4/2 
Total state aid -  annual average 1994-1996 
SECTOR/FUNCTION 

l. I. Agriculture* 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 
TOTAL  MANUFACTURING 
in% 

BELGIUM 

A1A 

A2A 

FORMS OF AID 
B1A 

CIA 

C2A 

D1A 

168,5 
1,9 

420,7 
82,8 
5,4 
230,3 
2,0 
0,2 
0,0 
0,0 
0,0 
0,0 

1.613,9 
3,4 
28,0 
1.569,9 
590,0 
0,0 
0,0 
0,0 
12,7 
0,0 
259,6 
259,6 
0,0 

2.196,1 
80,7 
624,4 
54,4 

0,0 
0,0 

111,6 
0,2 
0,0 
1,4 
0,0 
0,0 
0,0 
0,0 
0,0 
110,0 

288,7 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
288,7 
0,0 
6,1 
6,1 
0,0 

406,4 
14,9 
406,4 
35,4 

0,0 
0,0 

14,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
14,1 

0,4 
0,0 
0,0 
0,2 
0,0 
0,2 
0,0 
0,0 
0,3 
0,0 
0,0 
0,0 
0,0 

14,5 
0,5 
14,3 
1,2 

0,0 
0,0 

34,3 
32,1 
0,0 
0,6 
1,3 
0,0 
0,0 
0,0 
0,0 
0,4 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,2 
0,2 
0,0 

34,5 

1,3 
34,5 
3,0 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
4,5 
4,5 
0,0 

4,5 

0,2 
4,5 
0,4 

In Million ECU 
Manufacturing 
in% 

T O T AL  A ID 
TOTAL 
168,5 
1,9 

in% 

0,1 

TOTAL 
-
-

0,0 
0,0 

47,1 
0,0 
0,0 
6,3 
40,8 
0,0 
0,0 
0,0 
0,0 
0,0 

0,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,1 
0,0 
17,4 
17,4 
0,0 

527,8 
115,0 
5,4 
238,5 
44,2 
0,2 
0,0 
0,0 
0,0 
124,5 

1903,2 
3,4 
28,0 
1570,0 
590,0 
0,2 
0,0 
0,0 
301,8 
0,0 
287,7 
287,7 
0,0 

19,4 
4,1 
0,2 
8,8 
1,6 
0,0 
0,0 
0,0 
0,0 
4,6 

70,0 
0,1 
1,0 
56,6 
21,3 
0,0 
0,0 
0,0 
11,1 
0,0 
10,6 
10,6 
0,0 

527,8 
115,0 
5,4 
238,5 
44,2 
0,2 
0,0 
0,0 
0,0 
124,5 

333,2 
3,4 
28,0 
-
-
-
-
-
301,8 
0,0 
287,7 
287,7 
0,0 

-
-

46,0 
9,6 
0,4 
20,8 
3,7 
0,0 
0,0 
0,0 
0,0 
10,8 

29,0 
0,3 
2,3 
-
-
-
-
-
26,3 
0,0 
25,0 
25,0 
0,0 

64,6 

2.720,6 

2,4 
64,6 
5,6 

100,0 

1.148,7 

100,0 

* State aid to agriculture is given for information  only and is not included in any total. 

71 

DENMARK 

A1A 

A2A 

FORMS OF AID 
B1A 

CIA 

C2A 

D1A 

Table A4/3 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture* 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

134,6 
8,3 

453,9 
129,7 
45,7 
21,7 
34,0 
222,7 
0,0 
0,0 
0,0 
0,0 

621,0 
0,0 
65,4 
527,2 
68,7 
0,0 
0,0 
0,0 
28,5 
0,0 
11,6 
11,6 
0,0 

0,0 
0,0 

68,9 
50,1 
18,8 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

TOTAL 
in% 
TOTAL  MANUFACTURING 
in% 

1.094,8 
90,7 
559,3 
83,3 

68,9 
5,7 
68,9 
10,3 

* State aid to agriculture is given  for information  only and is not included in any total. 

72 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

32,4 
15,7 
0,0 
1,0 
13,1 
2,6 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,1 
0,1 
0,0 

32,6 
2,7 
32,6 
4,9 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

10,5 
0,5 
0,0 
10,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

10,5 
0,9 
10,5 
1,6 

In Million ECU 

Manufacturing 
in% 

T O T AL  A ID 
TOTAL 
134,6 
8,3 

in% 

0,7 

TOTAL 
-
-

565,7 
195,9 
64,5 
32,8 
47,2 
225,3 
0,0 
0,0 
0,0 
0,0 

621,0 
0,0 
65,4 
527,2 
68,7 
0,0 
0,0 
0,0 
28,5 
0,0 
11,7 
11,7 
0,0 

46,9 
16,2 
5,3 
2,7 
3,9 
18,7 
0,0 
0,0 
0,0 
0,0 

51,5 
0,0 
5,4 
43,7 
5,7 
0,0 
0,0 
0,0 
2,4 
0,0 
1,0 
1,0 
0,0 

565,7 
195,9 
64,5 
32,8 
47,2 
225,3 
0,0 
0,0 
0,0 
0,0 

93,9 
0,0 
65,4 
-
-
-
-
-
28,5 
0,0 
11,7 
11,7 
0,0 

s 

-

84,3 
29,2 
9,6 
4,9 
7,0 
33,6 
0,0 
0,0 
0,0 
0,0 

14,0 
0,0 
9,7 
-
-
-
-
-
4,2 
0,0 
1,7 
1,7 
0,0 

1.206,7 

100,0 

671,3 

100,0 

Table A4/4 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture* 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2.  Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 
3.3. Germany:  (Berlin/Zonenrand) 

TOTAL 
in% 
TOTAL  MANUFACTURING 
in % 

GERMANY 

A1A 
2.939,1 
16,5 

A2A 

0,0 
0,0 

FORMS OF AID 
B1A 

CIA 

0,0 
0,0 

0,0 
0,0 

1.750,2 
1.076,6 
78,6 
325,7 
0,0 
241,3 
0,0 
0,0 
0,0 
28,0 

18.223,0 
298,6 
519,1 
11.649,2 
3.048,9 
0,0 
5.599,8 
134,2 
22,1 
0,0 
6.502,9 
375,1 
6.126,0 
1,8 
26.492,7 
78,1 
9.092,9 
55,1 

251,2 
0,0 
0,0 
247,4 
0,0 
3,8 
0,0 
0,0 
0,0 
0,0 

143,6 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
143,6 
0,0 
2.127,2 
2,8 
1.964,0 
160,4 
2.521,9 
7,4 
2.521,9 
15,3 

119,4 
75,7 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
43,8 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
119,4 
0,4 
119,4 
0,7 

777,5 
14,1 
48,3 
184,1 
0,0 
25,5 
0,0 
0,0 
0,0 
505,5 

7,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
7,1 
0,0 
2.919,3 
69,5 
2.849,9 
0,0 
3.703,9 
10,9 
3.703,9 
22,4 

* State aid to agriculture is given for information  only and is not included in any total. 

C2A 

D1A 

0,0 
0,0 

61,1 
0,0 
0,0 
61,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
161,4 
0,0 
0,0 
161,4 
222,5 
0,7 
222,5 
1,3 

0,0 
0,0 

231,3 
0,0 
0,0 
79,6 
0,0 
0,0 
0,0 
0,0 
0,0 
151,7 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
611,1 
0,0 
611,1 
0,0 
842,4 
2,5 
842,4 
5,11 

73 

In Million ECU 

T O T AL  A ID 
in% 
TOTAL 
2.939,1 
16,5 

0,0 
0,1 

TOTAL 
-
-

Manufacturing 
in% 

3190,7 
1166,3 
126,9 
897,9 
0,0 
270,6 
0,0 
0,0 
0,0 
729,0 

18.373,7 
298,6 
519,1 
11.649,2 
3048,9 
0,0 
5599,8 
134,2 
172,7 
0,0 
12321,8 
447,4 
11550,9 
323,5 
33.902,8 

9,7 
3,6 
0,4 
2,7 
0,0 
0,8 
0,0 
0,0 
0,0 
2,2 

54,2 
0,9 
1,6 
34,4 
8,9 
0,8 
17,1 
0,4 
0,5 
0,0 
36,3 
1,3 
34,1 
1,0 

3190,7 
1166,3 
126,9 
897,9 
0,0 
270,6 
0,0 
0,0 
0,0 
729,0 

990,4 
298,6 
519,1 
-
-
-
-
-
172,7 
0,0 
12321,8 
447,4 
11550,9 
323,5 

-
-

19,3 
7,1 
0,8 
5,4 
0,0 
1,6 
0,0 
0,0 
0,0 
4,4 

6,0 
1,8 
3,1 
-
-
-
-
-
1,0 
0,0 
74,7 
2,7 
70,0 
2,0 

100,0 

16503,0 

100,0| 

Table A4/5 
Total  state  aid -  annual  average  1994-1996 

SECTOR/FUNCTION 

l.l.  Agriculture 
l .2. Fisheries 

2.1.  Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research  and  Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and  1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in% 

A1A 
N.A. 

A2A 
N.A. 

0,8 

0,0 

14,0 
10,0 
0,0 
4,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

279,8 
0,0 
0,0 
271,7 
8,0 
0,0 
0,0 
0,0 
8,2 
0,0 
415,7 
0,0 
415,7 

710,4 
72,6 

437,9 
66,2 

70,6 
0,0 
0,0 
7,0 
63,6 
0,0 
0,0 
0,0 
0,0 
0,0 

12,5 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
12,5 
0,0 
0,0 
0,0 
0,0 

83,1 
8,5 

83,1 
12,6 

GREECE 

FORMS OF AID 
CIA 
B1A 
N.A. 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

T O T AL  A ID 
in% 
TOTAL 
N.A. 

0,0 

0,8 

In Million  ECU 

Manufacturing 
in% 

TOTAL 
-
-

0,0 
0,1 

' 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
21,8 
0,0 
21,8 

21,8 
2,2 

21,8 
3,3 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

44,1 
0,0 
0,0 
44,1 
0,0 
44,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

44,1 
4,5 

0,0 
0,0 

74 

119,1 
0,0 
0,0 
0,0 
37,8 
0,0 
0,0 
0,0 
0,0 
81,4 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

119,1 
12,2 

119,1 
18,0 

-
-

30,8 
1,5 
0,0 
1,6 
14,8 
0,0 
0,0 
0,0 
0,0 
12,0 

3,1 
0,0 
0,0 
-
-
-
-
-
3,1 
0,0 
66,1 
0,0 
66,1 

203,8 
10,0 
0,0 
11,0 
101,3 
0,0 
0,0 
0,0 
0,0 
81,4 

20,7 
0,0 
0,0 
-
-
-
-
-
20,7 
0,0 
437,5 
0,0 
437,5 

203,8 
10,0 
0,0 
11,0 
101,3 
0,0 
0,0 
0,0 
0,0 
81,4 

336,4 
0,0 
0,0 
315,8 
8,0 
44,1 
0,0 
0,0 
20,7 
0,0 
437,5 
0,0 
437,5 

978,5 

20,8 
1,0 
0,0 
U 
10,1 
0,0 
0,0 
0,0 
0,0 
8,2 

34,4 
0,0 
0,0 
31,5 
0,8 
4,4 
0,0 
0,0 
2,1 
0,0 
44,8 
0,0 
44,8 

100,0 

661,9 

100,0 

T O T AL  A ID 
in% 
TOTAL 
N.A. 

In  Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

0,0 
1,3 

Table A4/6 
Total  state  aid -  annual  average  1994-1996 

SECTOR/FUNCTION 

1.1. Agriculture 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in % 

TOTAL  MANUFACTURING 
in % 

SPAIN 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
B1A 
N.A. 

CIA 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

62,3 

409,9 
112,2 
30,2 
155,8 
3,7 
29,6 
0,0 
0,0 
0,0 
78,4 

4.117,9 
663,6 
389,3 
1.857,2 
0,0 
0,0 
767,6 
236,5 
203,7 
0,0 
267,8 
190,6 
77,2 

4.857,9 
97,3 

1.934,4 
93,4 

0,0 

4,1 
0,0 
0,0 
3,1 
0,0 
0,0 
0,0 
0,0 
0,0 
1,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
2,8 
0,0 
2,8 

6,9 
0,1 

6,9 
0,3 

0,0 

89,8 
33,6 
0,4 
46,8 
4,4 
0,0 
0,0 
0,0 
0,0 
4,6 

28,6 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
28,6 
0,0 
9,5 
0,0 
9,5 

127,9 
2,6 

127,9 
6,2 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

75 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

62,3 

506,2 
145,8 
30,6 
207,8 
8,4 
29,6 
0,0 
0,0 
0,0 
84,0 

4.146,5 
663,6 
389,3 
1857,2 
0,0 
0,0 
767,6 
236,5 
232,3 
0,0 
280,1 
190,6 
89,6 

4.995,1 

0,0 

2,5 
0,0 
0,0 
2,1 
0,3 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

2,5 
0,0 

2,5 
0,1 

24,4 
7,0 
1,5 
10,0 
0,4 
1,4 
0,0 
0,0 
0,0 
4,1 

62,0 
32,0 
18,8 
-
-
-
-
-
11,2 
0,0 
13,5 
9,2 
4,3 

506,2 
145,8 
30,6 
207,8 
8,4 
29,6 
0,0 
0,0 
0,0 
84,0 

1285,3 
663,6 
389,3 
-
-
-
-
-
232,3 
0,0 
280,1 
190,6 
89,6 

10,4 
3,0 
0,6 
4,3 
0,2 
0,6 
0,0 
0,0 
0,0 
1,7 

83,0 
13,7 
7,7 
37,2 
0,0 
0,0 
15,4 
4,7 
4,7 
0,0 
5,8 
3,9 
1,8 

100,0 

2071,6 

100,0 

Table A4/7 
Total state aid -  annual average 1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture 
1.2.  Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research  and  Development 
2.1.2.  Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and  1192/69 
of which Airline  services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL MANUFACTURING  . 
in% 

FINLAND 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
B1A 
CIA 
N.A. 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

3,5 

214,1 
122,5 
8,9 
27,7 
38,2 
13,2 
0,0 
0,0 
0,0 
3,6 

52,8 
0,0 
0,0 
47,6 
0,0 
0,0 
0,0 
0,0 
5,2 
0,0 
76,4 
76,4 
0,0 

346,7 
83,3 

295,6 
81,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

2,8 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
2,8 
0,0 
9,1 
9,1 
0,0 

11,8 
2,8 

11,8 
3,2 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

76 

0,0 

54,6 
5,6 
0,0 
49,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

54,7 
13,1 

54,7 
15,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 

2,8 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
2,8 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,2 
0,2 
0,0 

3,0 
0,7 

3,0 
0,8 

T O T AL  A ID 
TOTAL 
in% 
N.A. 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-

• 

0,0 
0,8 

3,5 

271,5 
128,2 
8,9 
76,6 
38,2 
13,2 
0,0 
0,0 
0,0 
6,4 

55,6 
0,0 
0,0 
47,6 
0,0 
0,0 
0,0 
0,0 
8,0 
0,0 
85,7 
85,7 
0,0 

65,2 
30,8 
2,1 
18,4 
9,2 
3,2 
0,0 
0,0 
0,0 
1,5 

13,4 
0,0 
0,0 
11,4 
0,0 
0,0 
0,0 
0,0 
1,9 
0,0 
20,6 
20,6 
0,0 

271,5 
128,2 
8,9 
76,6 
38,2 
13,2 
0,0 
0,0 
0,0 
6,4 

8,0 
0,0 
0,0 
-
-
-
-
-
8,0 
0,0 
85,7 
85,7 
0,0 

74,4 
35,1 
2,4 
21,0 
10,5 
3,6 
0,0 
0,0 
0,0 
1,7 

2,2 
0,0 
0,0 
-
-
-
-
-
2,2 
0,0 
23,5 
23,5 
0,0 

416,2 

100,0 

365,2 

100,0 

FRANCE 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
B1A 
N.A. 

CIA 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

32,3 

0,0 

0,0 

0,0 

0,0 

0,0 

32,3 

T O T AL  A ID 
TOTAL 
in% 
N.A. 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

0,0 
0,2 

Table A4/8 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

l.l. Agriculture 
1.2. Fisheries 

2.1.  Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research  and Development 
2.1.2.  Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which  Regulations  1191/69 and 1192/69 
of which Airline  services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

773,2 
504,6 
38,2 
157,8 
8,8 
23,7 
0,0 
0,0 
0,0 
40,2 

7.160,1 
2,6 
24,4 
5.912,4 
0,0 
0,0 
149,5 
608,4 
462,7 
0,0 
353,5 
312,1 
41,4 

487,1 
469,8 
0,0 
17,3 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

20,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
20,0 
0,0 
913,6 
517,2 
396,4 

160,9 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
160,9 

2.312,3 
0,0 
0,0 
1.043,2 
0,0 
1.043,2 
0,0 
0,0 
0,0 
1.269,1 
0,0 
0,0 
0,0 

TOTAL 
in % 

8.319,1 
65,3 

1.420,7 
11,1 

2.473,2 
19,4 

TOTAL  MANUFACTURING 
in% 

1.616,5 
43,4 

1.420,7 
38,1 

160,9 
4,3 

77 

100,1 
62,9 
0,0 
37,2 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

13,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
13,0 
0,0 
1,1 
0,0 
1,1 

114,2 
0,9 

114,2 
3,1 

22,1 
0,0 
0,0 
0,0 
22,1 
0,0 
0,0 
0,0 
0,0 
0,0 

28,2 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
28,2 
0,0 
0,0 
0,0 
0,0 

50,3 
0,4 

50,3 
1,3 

364,3 
0,0 
0,0 
0,0 
364,3 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,5 
0,5 
0,0 

364,8 
2,9 

364,8 
9,8 

1907,7 
1037,4 
38,2 
212,3 
395,1 
23,7 
0,0 
0,0 
0,0 
201,1 

9.533,6 
2,6 
24,4 
6955,6 
0,0 
1043,2 
149,5 
608,4 
524,0 
1.269,1 
1268,6 
829,8 
438,8 

13,9 
7,6 
0,3 
1,5 
2,9 
0,2 
0,0 
0,0 
0,0 
1,5 

74,8 
0,0 
0,2 
50,6 
0,0 
7,6 
U 
4,4 
3,8 
10,0 
9,2 
6,0 
3,2 

1907,7 
1037,4 
38,2 
212,3 
395,1 
23,7 
0,0 
0,0 
0,0 
201,1 

551,0 
2,6 
24,4 
-
-
-
-
-
524,0 
-
1268,6 
829,8 
438,8 

12.742,3 

100,0 

51,2 
27,8 
1,0 
5,7 
10,6 
0,6 
0,0 
0,0 
0,0 
5,4 

14,8 
0,1 
0,7 
-
-
-
-
-
14,1 
-
34,0 
22,3 
11,8 

3727,4 

100,0 

Table A4/9 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

l.l.  Agriculture 
1.2.  Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research  and  Development 
2.1.2.  Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which  Regulations  1191/69 and  1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in% 

IRELAND 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
CIA 
B1A 
N.A. 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

In Million ECU 

Manufacturing 
in% 

T O T AL  A ID 
in% 
TOTAL 
N.A. 

0,0 

11,8 

TOTAL 
-
-

0,0 
3,0 

11,8 

54,5 
12,7 
0,0 
36,7 
3,9 
1,2 
0,0 
0,0 
0,0 
0,0 

141,7 
15,5 
0,0 
126,2 
84,1 
0,9 
0,0 
0,0 
0,0 
0,0 
120,1 
0,0 
120,1 

328,2 
83,4 

190,1 
88,6 

0,0 

0,2 
0,0 
0,0 
0,0 
0,2 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,2 
0,0 

0,2 
0,1 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

41,0 
0,0 
0,0 
41,0 
0,0 
41,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

41,0 
10,4 

0,0 
0,0 

78 

0,0 

0,1 
0,0 
0,0 
0,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,5 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,5 
0,0 
0,0 
0,0 
0,0 

0,6 
0,1 

0,6 
0,3 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

23,8 
0,0 
0,0 
0,1 
2,3 
0,0 
0,0 
0,0 
0,0 
21,4 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

23,8 
6,0 

23,8 
11,1 

-
-

36,6 
5,9 
0,0 
17,2 
3,0 
0,5 
0,0 
0,0 
0,0 
10,0 

7,5 
7,2 
0,0 
-
-
-
-
-
0,2 
0,0 
56,0 
0,0 
56,0 

78,5 
12,7 
0,0 
36,9 
6,4 
1,2 
0,0 
0,0 
0,0 
21,4 

16,0 
15,5 
0,0 
-
-
-
-
-
0,5 
0,0 
120,1 
0,0 
120,1 

78,5 
12,7 
0,0 
36,9 
6,4 
1,2 
0,0 
0,0 
0,0 
21,4 

183,2 
15,5 
0,0 
167,2 
84,1 
41,8 
0,0 
0,0 
0,5 
0,0 
120,1 
0,0 
120,1 

393,7 

20,0 
3,2 
0,0 
9,4 
1,6 
0,3 
0,0 
0,0 
0,0 
5,4 

46,5 
3,9 
0,0 
42,5 
21,4 
10,6 
0,0 
0,0 
0,1 
0,0 
30,5 
0,0 
30,5 

100,0 

214,7 

100,0 

ITALY 

Table A4/10 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

l.l.  Agriculture 
l .2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which  Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

A1A 
N.A. 

A2A 
N.A. 

88,9 

1.914,3 
232,21 
19,8 
528,4 
444,4 
65,8 
0,0 
0,0 
0,0 
623,5 

7.908,5 
544,5 
204,8 
6.899,1 
2.142,4 
0,0 
0,0 
0,0 
260,1 
0,0 
1.277,6 
60,3 
1.217,3 

0,0 

5,2 
0,0 
0,0 
0,0 
0,0 
5,2 
0,0 
0,0 
0,0 
0,0 

13,7 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
13,7 
0,0 
4.101,8 
53,0 
4.048,9 

TOTAL 
in % 

11.189,3 
66,8 

4.120,7 
24,6 

TOTAL  MANUFACTURING 
in% 

4.201,3 
43,0 

4.120,7 
42,2 

FORMS OF AID 
B1A 
N.A. 

CIA 
N.A. 

0,0 

0,0 

289,5 
38,6 
0,0 
82,8 
148,1 
0,0 
0,0 
0,0 
0,0 
20,0 

32,4 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
32,4 
0,0 
260,7 
0,0 
260,7 

582,6 
3,5 

582,6 
6,0 

839,1 
0,0 
0,0 
0,0 
270,1 
0,0 
0,0 
0,0 
0,0 
569,0 

7,3 
0,5 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
6,7 
0,0 
0,0 
0,0 
0,0 

846,4 
5,1 

846,4 
8,7 

79 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

C2A 
N.A. 

D1A 
N.A. 

T O T AL  A ID 
TOTAL 
N.A. 

in% 

0,0 

88,9 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

0,0 
0,5 

1,7 
0,0 
0,0 
1,6 
0,0 
0,0 
0,0 
0,0 
0,0 
0,2 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
7,1 
1,5 
5,6 

9,3 
0,1 

8,9 
0,1 

3.049,8 
270,9 
19,8 
612,8 
862,6 
71,0 
0,0 
0,0 
0,0 
1.212,6 

7.961,9 
545,0 
204,8 
6.899,1 
2.142,4 
0,0 
0,0 
0,0 
312,9 
0,0 
5.647,3 
114,8 
5.532,5 

18,2 
1,6 
0,1 
3,7 
5,2 
0,4 
0,0 
0,0 
0,0 
7,2 

47,5 
3,3 
1,2 
41,2 
12,8 
0,0 
0,0 
0,0 
1,9 
0,0 
33,7 
0,7 
33,0 

3.049,8 
270,9 
19,8 
612,8 
862,6 
71,0 
0,0 
0,0 
0,0 
1.212,6 

1.062,7 
545,0 
204,8 
-
-
-
-
-
312,9 
0,0 
5.647,3 
114,8 
5.532,5 

31,2 
2,8 
0,2 
6,3 
9,0 
0,7 
0,0 
0,0 
0,0 
12,4 

10,9 
5,6 
2,1 
-
-
-
-
-
3,2 
0,0 
57,9 
1,2 
56,7 

17.690,9 

100,0 

9;759,9 

100,0 

Table A4/11 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

l.l.  Agriculture 
1.2.  Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1.  Research  and  Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and  1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in% 

LUXEMBOURG 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
CIA 
B1A 
N.A. 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

0,0 

13,5 
2,8 
2,3 
8,2 
0,3 
0,0 
0,0 
0,0 
0,0 
0,0 

86,1 
0,7 
0,0 
85,4 
84,5 
0,0 
0,0 
0,0 
0,1 
0,0 
28,2 
28,2 
0,0 

127,9 
97,4 

42,5 
92,5 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
1,8 
1,8 
0,0 

1,8 
1,4 

1,8 
3,9 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

80 

0,0 

1,7 
0,2 
0,0 
1,4 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

1,7 
1,3 

1,7 
3,6 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

T O T AL  A ID 
in% 
TOTAL 
N.A. 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

0,0 
0,0 

0,0 

15,2 
3,0 
2,3 
9,5 
0,3 
0,0 
0,0 
0,0 
0,0 
0,0 

86,1 
0,7 
0,0 
85,4 
84,5 
0,0 
0,0 
0,0 
0,1 
0,0 
30,0 
30,0 
0,0 

11,6 
2,3 
1,8 
7,3 
0,3 
0,0 
0,0 
0,0 
0,0 
0,0 

65,6 
0,5 
0,0 
65,0 
64,3 
0,0 
0,0 
0,0 
0,1 
0,0 
22,9 
22,9 
0,0 

15,2 
3,0 
2,3 
9,5 
0,3 
0,0 
0,0 
0,0 
0,0 
0,0 

0,7 
0,7 
0,0 
-
-
-
-
-
0,1 
0,0 
30,0 
30,0 
0,0 

33,1 
6,5 
5,1 
20,7 
0,7 
0,0 
0,0 
0,0 
0,0 
0,0 

1,6 
1,4 
0,0 
-
-
-
-
-
0,2 
0,0 
65,3 
65,3 
0,0 

131,4 

100,0 

46,0 

100,0 

TableA4/12 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture* 
1.2. Fisheries 

2.1.  Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which  Regulations  1191/69 and 1192/69 
of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional  Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in % 

NETHERLANDS 

A1A 

A2A 

FORMS OF AID 
B1A 

CIA 

C2A 

D1A 

344,4 
39,9 

322,6 
131,2 
17,4 
14,7 
0,0 
141,4 
0,0 
0,0 
0,0 
17,9 

1.375,9 
0,0 
17,2 
1.336,3 
137,2 
0,0 
0,0 
0,0 
22,4 
0,0 
113,4 
113,4 
0,0 

1.851,7 
91,0 

475,6 
72,2 

0,0 
0,0 

88,2 
0,0 
35,8 
0,0 
0,0 
52,5 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
y  0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

88,2 
4,3 

88,2 
13,4 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

21,8 
3,6 
0,0 
0,0 
18,2 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

21,8 
1,1 

21,8 
3,3 

0,0 
0,0 

12,1 
0,0 
12,1 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

12,1 
0,6 

12,1 
1,8 

0,0 
0,0 

60,5 
0,0 
0,0 
39,6 
0,0 
14,2 
0,0 
0,0 
0,0 
3,7 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

60,5 
3,0 

60,5 
9,2 

In Million ECU 

T O T AL  A ID 
in% 
TOTAL 
344,4 
39,9 

0,0 
2,0 

Manufacturing 
in% 

TOTAL 
-
-

-
-

505,3 
134,9 
65,3 
54,3 
18,2 
211,1 
0,0 
0,0 
0,0 
21,6 

1375,9 
0,0 
17,2 
1336,3 
137,2 
0,0 
0,0 
0,0 
22,4 
0,0 
113,4 
113,4 
0,0 

24,8 
6,6 
3,2 
2,7 
0,9 
10,4 
0,0 
0,0 
0,0 
1,1 

67,6 
0,0 
0,8 
65,7 
6,7 
0,0 
0,0 
0,0 
1,1 
0,0 
5,6 
5,6 
0,0 

505,3 
134,9 
65,3 
54,3 
18,2 
211,1 
0,0 
0,0 
0,0 
21,6 

39,6 
0,0 
17,2 
-
-
-
-
-
22,4 
0,0 
113,4 
113,4 
0,0 

76,8 
20,5 
9,9 
8,2 
2,8 
32,1 
0,0 
0,0 
0,0 
3,3 

6,0 
0,0 
2,6 
-
-
-
-
-
3,4 
0,0 
17,2 
17,2 
0,0 

2034,4 

100,0 

658,2 

100,0 

* State aid to agriculture is given for information  only and is not included in any total. 

81 

TableA4/13 
Total state aid -  annual average  1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture 
1.2.  Fisheries 

2.1.  Manufacturing/Services:  Horizontal 
Objectives 

2.1.1.  Research and  Development 
2.1.2.  Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1.  Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 

1192/69 

of which Airline services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial services 

3. Regional Aids 

3.1.  Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
i n% 

A1A 
N.A. 

A2A 
N.A. 

3,8 

0,0 

90,1 

12,7 
0,0 
0,3 
0,5 
7,3 
0,0 
0,0 
0,0 
69,2 

273,2 
111,0 
3,6 
89,4 
70,7 

0,0 
0,6 
1,9 
66,7 
0,0 
30,9 
0,0 
30,9 

398,0 
56,2 

302,2 
81,6 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
2,0 

2,2 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,2 
2,0 
30,3 
0,0 
30,3 

32,5 
4,6 

30,4 
8,2 

PORTUGAL 

FORMS OF AID 
C1A 
N.A. 

B1A 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

T O T AL  A ID 
TOTAL 
N.A. 

i n% 

0,0 

3,8 

In Million ECU 
Manufacturing 
i n% 

TOTAL 
-
-

-
-

0,0 
0,5 

0,0 

0,1 

0,0 
0,0 
0,0 
0,1 
0,0 
0,0 
0,0 
0,0 
0,0 

5,9 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
5,9 
0,0 
0,5 
0,0 
0,5 

6,5 
0,9 

6,5 
1,8 

0,0 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
.  0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

0,0 

0,5 

0,5 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

239,8 
0,0 
0,0 
239,8 
0,0 

239,8 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

240,3 
33,9 

0,5 
0,1 

82 

0,0 

90,7 

12,8 

90,7 

24.5 

13,2 
0,0 
0,3 
0,6 
7,3 
0,0 
0,0 
0,0 
71,2 

521,1 
111,0 
3,6 
329,8 
70,7 

239,8 
0,6 
1,9 
72,8 
0,0 
92,4 
0,0 
92,4 

708,0 

1,9 
0,0 
0,0 
0,1 
1,0 
0,0 
0,0 
0,0 
10,1 

73,6 
15,7 
0,5 
46,5 
10,0 

33,9 
0,1 
0,3 
10,3 
0,0 
13,0 
0,0 
13,0 

100,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
30,7 
0,0 
30,7 

30,7 
4,3 

30,7 
8,3 

13,2 
0,0 
0,3 
0,6 
7,3 
0,0 
0,0 
0,0 
69,2 

187,3 
111,0 
3,6 
-
-

-
-
-
72,8 
0,0 
92,4 
0,0 
92,4 

3,6 
0,0 
0,1 
0,2 
2,0 
0,0 
0,0 
0,0 
18,7 

50,6 
30,0 
1,0 
-
-

-
-
-
19,6 
0,0 
24,9 
0,0 
24,9 

370,3 

100,0 

TableA4/14 
Total state aid -  annual  average  1994-1996 
SECTOR/FUNCTION 

l.l.  Agriculture 
1.2. Fisheries 

2.1.  Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research  and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline  services 

2.2.4.1. Coal: Aid to current  production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in% 

TOTAL  MANUFACTURING 
in% 

SWEDEN 

A1A 
N.A. 

A2A 
N.A. 

FORMS OF AID 
B1A 
CIA 
N.A. 
N.A. 

C2A 
N.A. 

D1A 
N.A. 

T O T AL  A ID 
in% 
TOTAL 
N.A. 

7,7 

49,2 
3,1 
9,0 
35,1 
0,0 
1,7 
0,0 
0,0 
0,0 
0,3 

1.093,1 
0,0 
0,0 
1.078,8 
0,0 
0,0 
0,0 
0,0 
14,3 
0,0 
130,4 
130,4 
0,0 

1.280,3 
91,2 

193,8 
61,0 

0,0 

5,7 
0,0 
5,7 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
53,8 
53,8 
0,0 

59,5 
4,2 

59,5 
18,7 

0,0 

5,4 
5,4 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

5,4 
0,4 

5,4 
1,7 

83 

0,0 

46,3 
24,8 
0,0 
13,8 
0,0 
7,7 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
11,3 
11,3 
0,0 

57,7 
4,1 

57,7 
18,1 

0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 

0,0 
0,0 

7,7 

108,2 
34,1 
14,7 
49,7 
0,0 
9,4 
0,0 
0,0 
0,0 
0,3 

1093,1 
0,0 
0,0 
1078,8 
0,0 
0,0 
0,0 
0,0 
14,3 
0,0 
195,6 
195,6 
0,0 

1404,5 

0,0 

1,6 
0,7 
0,0 
0,8 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

1,6 
0,1 

1,6 
0,5 

0,0 
0,5 

7,7 
2,4 
1,0 
3,5 
0,0 
0,7 
0,0 
0,0 
0,0 
0,0 

77,8 
0,0 
0,0 
76,8 
0,0 
0,0 
0,0 
0,0 
1,0 
0,0 
13,9 
13,9 
0,0 

100,0 

In Million ECU 

Manufacturing 
in% 

TOTAL 
-
-

-
-

108,2 
34,1 
14,7 
49,7 
0,0 
9,4 
0,0 
0,0 
0,0 
0,3 

14,3 
0,0 
0,0 
-
-
-
-
-
14,3 
0,0 
195,6 
195,6 
0,0 

34,0 
10,7 
4,6 
15,6 
0,0 
3,0 
0,0 
0,0 
0,0 
0,1 

4,5 
0,0 
0,0 
-
-
-
-
-
4,5 
0,0 
61,5 
61,5 
0,0 

318,0 

100,0 

TableA4/15 
Total state aid  annual average 1994-1996 
SECTOR/FUNCTION 

1.1. Agriculture* 
1.2. Fisheries 

2.1. Manufacturing/Services:  Horizontal  Objectives 

2.1.1. Research and Development 
2.1.2. Environment 
2.1.3. SME 
2.1.4. Trade 
2.1.5. Energy  saving 
2.1.6. General  Investment 
2.1.7. Combat  unemployment 
2.1.8. Training aid 
2.1.9. Other  Objectives 

2.2. Manufacturing/Services:  Partic. Sectors 

2.2.1. Steel 
2.2.2  Shipbuilding 
2.2.3. Transport 

of which Regulations  1191/69 and 1192/69 
of which Airline  services 

2.2.4.1. Coal: Aid to current production 
2.2.4.2. Coal: Other aids 
2.2.5. Other sectors 
2.2.6. Financial  services 

3. Regional Aids 

3.1. Regions under 92(3)c 
3.2. Regions under 92(3)a 

TOTAL 
in % 

TOTAL  MANUFACTURING 
in% 

UNITED  KINGDOM 

A1A 

A2A 

FORMS OF AID 
B1A 

CIA 

C2A 

D1A 

367,3 
23,3 

303,4 
176,1 
0,9 
41,8 
71,3 
1,8 
0,0 
0,0 
0,0 
11,5 

3.069,4 
0,0 
8,6 
1.809,5 
1.797,1 
0,0 
6,4 
976,1 
268,8 
0,0 
750,5 
468,4 
282,1 

4.146,6 
95,8 

1.331,3 
88,0 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
74,6 
7,9 
66,8 

74,6 
1,7 

74,6 
4,9 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
4,2 
0,0 
4,2 

4,2 
0,1 

4,2 
0,3 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

6,5 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
6,5 
0,0 
23,6 
23,6 
0,1 

30,2 
0,7 

30,2 
2,0 

0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
8,9 
8,9 
0,0 

8,9 
0,2 

8,9 
0,6 

0,0 
0,0 

31,9 
0,0 
0,0 
30,9 
1,0 
0,0 
0,0 
0,0 
0,0 
0,0 

0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
0,0 
31,4 
31,4 
0,0 

63,3 
1,5 

63,3 
4,2 

In Million ECU 

T O T AL  A ID 
in% 
TOTAL 
367,3 
23,3 

0,0 
0,5 

Manufacturing 
in% 

TOTAL 
-
-

-
-

335,3 
176,1 
0,9 
72,8 
72,3 
1,8 
0,0 
0,0 
0,0 
11,5 

3076,0 
0,0 
8,6 
1809,5 
1797,1 
0,0 
6,4 
976,1 
275,3 
0,0 
893,3 
540,2 
353,2 

4327,9 

7,7 
4,1 
0,0 
1,9 
1,7 
0,0 
0,0 
0,0 
0,0 
0,3 

71,1 
0,0 
0,2 
41,8 
41,5 
0,0 
0,1 
22,6 
6,4 
0,0 
20,6 
12,5 
8,2 

100,0 

335,3 
176,1 
0,9 
72,8 
72,3 
1,8 
0,0 
0,0 
0,0 
11,5 

283,9 
0,0 
8,6 
-
-
-
-
-
275,3 
0,0 
893,3 
540,2 
353,2 

22,2 
11,6 
0,1 
4,8 
4,8 
0,1 
0,0 
0,0 
0,0 
0,8 

18,8 
0,0 
0,6 
-
-
-
-
-
18,2 
0,0 
59,1 
35,7 
23,3 

1512,6 

100,0 

State aid to agriculture is given for information  only and is not included in any total. 

84 

ANNEX III 

COMMUNITY FUNDS AND INSTRUMENTS 

85 

I. Community Funds, Instruments and Programmes 

Below  a  brief  description  of  the  main  Community  funds,  instruments  and 
programmes  is  given.  It  should  be  noted  that  the  Cohesion  Financial 
Instrument  and  Cohesion  Fund were  established  in April  1993  and  May  1994 
respectively.  Moreover in July  1993, the second reform of the Structural Funds 
(EAGGF-Guidance,  ERDF,  Social  Fund,  FIFG)  took  place  thereby  confirming 
the  basic  principles  which  inspired  the  first  reform  in  1988  and  bringing  in  a 
number  of  operational  improvements.  A  further  innovation  was  that,  in 
accordance  with  the  conclusions  of  the  Edinburgh  European  Council,  the 
resources  of the  Structural  Funds  allocated  to four  Member  States  eligible for 
assistance  from  the  Cohesion  Fund  (Greece,  Spain,  Ireland  and  Portugal) 
would  double  in real terms  between  1992  and  1999  and that total funding for 
the  Structural  Funds  over the  period  1994-99 would  amount to  ECU  141  471 
million  (at  1992  prices). A  new  instrument  was  also  introduced  with the  entry 
into operation in 1994 of the FIFG to provide support for the restructuring of the 
fisheries sector. 

The  4th  FPRD  (4th  Framework  Programme  for  Research  and  Technological 
Development)  was  adopted  in  April  '94  for  the  period  1994-1998.  This  new 
Framework  Programme includes all the Community research and development 
activities.  Its  budget  is  ECU  13,1  billion.  Its  overall  structure  has  been 
streamlined to respond to three major challenges: 

developing  scientific  and  technological  excellence  in  Europe,  to  meet 
the  needs of the manufacturing  sector and  improve the quality  of  life in 
the Member  States. 
furthering  cooperation 
exploitation of the Community research efforts. 
promoting  research  activities  deemed  necessary  to  other  Community 
policies. 

the  co-ordination  and 

improving 

and 

EAGGF-Guarantees 
The Common Agricultural  Policy  is a  general system of market  support  based 
on  external  protection  and  internal  intervention.  As  such,  it  is  comparable  to 
import  quotas  and  customs  tariffs,  systems,  which  bring  about  a  transfer  of 
resources between sectors, without the recourse to direct aid. Much of EAGGF 
Guarantee  expenditure  is concerned with a system of support of this type and 
therefore cannot be  regarded  as comparable to expenditure  on aid.  Moreover, 
the  breakdown  by  Member  State  has  little  meaning  in this  case  because  the 
ultimate  beneficiary  may  not  be  in  the  Member  State  where  the  expenditure 
took  place. Around  35%  of expenditure  are  in the form of price  compensation 
aid granted to producers or processors. 

86 

EAGGF-Guidance 
The  EAGFF-Guidance  intervenes  by  co-financing  structural  measures  in the 
framework  of  programmes,  which  have  been  established  with  the  Member 
States and Regional authorities for: 

the  strengthening  and  reorganisation  of  agricultural  and  forestry 
structures, including those for the processing and marketing of products; 

compensation for the effects of natural handicaps on agriculture; 

the  re-conversion  of  agricultural  production  and  the  development  of 
additional activities for farmers; 

the development of the social fabric of rural areas and the conservation 
of natural resources. 

The  actions  co-financed  in  areas  covered  by  objectives  1  and  5b  relate  in 
particular to: 

the  conversion,  diversification,  reorientation  and  adjustment  of  the 
agricultural production potential; 

the  promotion,  labelling  and  investment  of  quality  products  for  local or 
regional agricultural and forestry; 

the development of structures and rural infrastructures; 

measures  to  achieve  diversification,  especially  those  providing  for 
farmers to develop multiple activities; 

the  renovation  and  development  of  villages  and  the  protection  and 
conservation of the rural heritage; 

encouragement for tourist and craft investment; 

the  introduction  of  appropriate  preventive  instruments  in  the  case  of 
natural  catastrophes  (in  particular  in  objective  1  regions)  restoring 
agricultural  and  forestry  production  potential  damaged  by  natural 
disasters; 

irrigation,  protection  of  the  environment,  and  restoration  of 

the 
landscapes; 

exploiting the full value of forests; 

development of agricultural and forestry advisory services and vocational 
training. 

87 

FIFG 
Structural  assistance  for  the  fishing  industry  was  first  granted  as  far  back  as 
1971,  the year  in which it was agreed to use funds from the Guidance  Section 
of  the  European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  to 
encourage  the  construction  and  modernisation  of  inshore  and  pelagic  fishing 
vessels together with the processing and marketing of fish.  In 1978 the original 
rules were  replaced  by a series of annual interim measures widened  in scope 
to  encompass  the  restructuring  of  the  inshore  fleet  and  the  development  of 
aquaculture. 

In  1983  a  system  of  multi-annual  programmes  was  put  into  effect,  based 
around  schemes  under  which  aid  could  be  granted  for  restructuring  the 
manufacturing  sector  and  conversion  of fishing  activities.  In  1986  the  need to 
reinforce  this approach  resulted  in the whole  range  of structural  measures for 
the  fleet  and  aquaculture  being  grouped  together  in  a  single  regulatory 
framework. 

Schemes  designed to assist the  processing  and  marketing  of fishery  products 
developed from a different  source, which was shared with the structural policy 
for processing and marketing of agricultural products. For a long time, one and 
the  same  Regulation  covered  the  processing  and  marketing  of  both  types of 
products.  However,  in  order  to  ensure  that  better  account  was  taken  of  the 
specific  requirements  of  the  fisheries  sector,  the  two  were  split  in  1989; 
assistance for the processing and marketing of fishery  products  has since had 
its own rules,  integrated  from that date  into the  Community's  Structural  Funds 
arrangements. 

In  1993  the  structural  elements  of the  Common  Fisheries  Policy  (CFP)  were 
overhauled  and three  major changes were  introduced. These  ensured  greater 
coherence between different aspects of the policy, removed the partition which 
had divided the CFP from other Community  activities  and, took account  of the 
changes  affecting  the  sector.  The  CFP's  structural  measures  were  integrated 
into the  Community's  system of structural funds when these were  reformed in 
1993.  Moreover  the  different  fishery  finances  available  for  such  activity  were 
regrouped  in  one  fund  known  as  the  Financial  Instrument  for  Fisheries 
Guidance (FIFG). 

Social Fund 
The  objectives of the Social Fund are to improve employment opportunities for 
young people (under the age of 25) and for other groups deemed to be in need 
of support (long-term unemployed, the handicapped, migrant workers and other 
socially disadvantaged groups). The Fund therefore contributes to the financing 
of  operations  carried  out  by  the  public  or  private  operators  in  the  following 
areas: 

the prevention of long term unemployment; 
vocational training; 
technical advice concerned with job creation; 
facilitate the adaptation of workers to industrial changes and changes in 
production system. 

88 

All applications for assistance are submitted through the Member States. 
Money from the  Social Fund is paid out on a  horizontal and  not on a  sectorial 
basis,  so  an  extrapolation  corresponding  to  the  concept  of  aid  within  the 
meaning of Article 92 of the Treaty is not possible. 

Regional Fund 
The  European  Regional  Development  Fund (ERDF)  aims to reduce disparities 
within the Community by providing financial support to: 

regions whose development is lagging behind (Objective 1); 
regions in industrial decline (Objective 2); 
rural problem areas (Objective 5b); 
the  development  of  regions  with  an  extremely  low  population  density 
(Objective 6). 

This  support  is  focused  mainly  on  infrastructure,  human  resources  and 
productive investment. 

As ERDF aid is generally paid out on a horizontal and not on a sectorial basis, 
identification  of  expenditure  which  corresponds  to  the  concept  of  State  aid 
within  the  meaning  of Article  92  of  the  Treaty  is  not  always  possible.  As  an 
alternative,  figures  relating  to  the  manufacturing  sector  and  services  and, 
economic  development  have  been  retained;  the  data  obtained  by  using  this 
approach therefore only provide an idea of the scale of ERDF aid involved. 

Cohesion Financial Instrument - Cohesion Fund 
After  the  principle  of  the  Cohesion  Fund  had  been  incorporated  into  the 
Maastricht Treaty, the Edinburgh European Council further decided to establish 
a  provisional  instrument  to  provide  Community  financial  support  to  the 
beneficiary  Member  States from  1993 while awaiting the entry  into force of the 
Treaty which in turn permitted establishment of the Cohesion Fund. 

The  Commission  adopted  the  proposal  for  a  Regulation  establishing  the 
cohesion  financial  instrument  based  on  Article  235  of  the  Treaty  which  was 
subsequently  adopted  by  Council  on  30/IV/93  and  extended  until  the  end  of 
1994. 

The  Cohesion  Fund  was  established  by  Article  130d  of  the  EC  Treaty,  as 
amended  by  the  Treaty  of  Maastricht  and  represented  a  further  stage  in the 
policy  of  solidarity  initiated  mainly  through  the  Structural  Funds.  This  Fund 
makes  its  own  specific  and  complementary  contribution  since  it  is  grounded 
principally  in  the  requirements  stemming  from  the  prospect  of  economic  and 
monetary  union (which is already starting to become a reality). From the outset 
the Fund has created its own identity on the basis of three major principles. 

The  first  is  its  limited  field  of  implementation:  the  protocol  on  economic  and 
social  cohesion  states  that  the  Cohesion  Fund  "will  provide  Community 
financial  contributions  to  Member  States  with  a  per  capita  GNP  of  less  than 
90% of the Community average." 

89 

Secondly, assistance is restricted to the part financing of projects in the fields of 
the environment and Trans-European transport networks. 

Thirdly,  as  a  result  of  its  links  with  the  implementation  of  economic  and 
monetary  union,  the  Fund  assists  Member  States  which  have  drawn  up  a 
programme  complying with  the  conditions  on excessive  public  deficits  as  laid 
down in Article 104c. 

In  addition  the  Cohesion  financial  instrument  and  later  (from  May  1994) 
Cohesion  Fund, contributed towards the objective  of cohesion. However  given 
that  most  of the  credits  available  were  devoted  to  infrastructure  projects  and 
not productive investment, the figures are only presented for information below 
in Table B. 

Community Research and Technological Development (RTD) 
Community research activities are conducted essentially at two levels: 

(I) 

(II) 

by  shared  cost  actions  with  third  parties  which  include  RTD  projects, 
thematic networks, and concerted actions (Indirect actions). 
at the Joint Research Centre^ (Direct actions). 

DG XII  (Science,  Research  and  Development)  administers the  indirect actions 
of  the  Framework  Programme  together  with  DG  III  (Industry),  DG  VI 
(Agriculture),  DG  VII  (Transport),  DG  XIII  (Telecommunications,  Information 
Market and  Exploitation of research),  DG XIV  (Fishery) and DG XVII  (Energy). 
According to the 4th Community Framework on RT&D the amount of ECU  13,1 
billion  from  the  EU  budget  will  be  spent  on  support  for  research  during  the 
period  1994-1998.  The  main  participants  in  the  RTD  activities  are  from 
universities,  research  centres  and the  manufacturing  sector  (including  SMEs). 
A little bit more than ECU 950 million is allocated to support the European Joint 
Research Centre. 

ECSC financial operations 
Financial assistance  is provided  by the  ECSC  in the form of loans and grants. 
The loans fall into three main categories: 

industrial loans; 
conversion loans; 
loans for workers' housing 

The fact that the financial  institutions, which distribute the loans, are  non-profit 
making could be advantageous to the recipient of the loan but this advantage is 
not  considered  as  aid  for  the  purposes  of  the  Treaties.  The  situation  with 
regard to grants is different. Whilst interest subsidies (on loans) would normally 
be  considered  as  constituting  aid,  other  measures,  notably  payments  of  a 
social  nature  to  former  steel  and  coal  sector  workers,  are  less  likely  to  be 
considered as such. 

90 

European Investment Bank 
The  mission of the  Bank is to further the  objectives  of the  European  Union by 
making  long-term  finance  available  for  sound  investment.  Created  by  the 
Treaty  of  Rome,  shareholders  are  the  Member  States  and  the  Board  of 
Governors  is composed  of the  Finance  Ministers  of these  States.  To  receive 
support,  projects  and  programmes  must  be  viable  in four  fundamental  areas: 
economic,  technical,  environmental  and  financial.  Through  the  Bank's  own 
lending  operations  and  ability  to  attract  other  financing,  the  range  of funding 
possibilities  is widened. Through the  borrowing  activities, the  Bank contributes 
to  the  development  of  capital  markets  throughout  the  Union.  The  Bank's 
policies  are  established  in close cooperation  with the  Member  States  and the 
other  Institutions of the  European  Union. There  is also  close  cooperation with 
the  business  and  banking  sectors  and  the  main  international  organisations in 
the  field. 

European Investment Fund 
The  European  Investment  Fund  is  a  new  financial  agency  set  up  to  provide 
guarantees  to support  medium  and  long-term  investment  in two  crucial  areas 
for  the  development  of  the  European  economy;  Trans-European  Networks 
(TEN) and Small and Medium-Sized  Enterprises. Established in June  1994, the 
Fund is a new and unique partnership  in which the European  Investment Bank 
and  the  European  Union, through  the  Commission,  cooperate  with the  banks 
and financial institutions of the Member States. By Commission  Directive dated 
15 March  1994, it was granted Multilateral Development Bank status. 

The  fundamental  objective  of  the  Fund  is  to  draw  more  private  capital  into 
infrastructure finance and to improve the flow of financial resources to the small 
and  medium  business  sector.  It  will  do  this  by  developing  mechanisms  to 
transfer  and  share  financial  risk  and  will  concentrate  on  the  provision  of 
financial  guarantees  on  medium  and  long-term  lending  by  banks  and  other 
financial institutions. 

In  addition  to  senior  long-term  debt  for  TEN  projects  it  will  be  able  to  cover 
private  placements,  bond  issues,  revenue  or  asset  backed  securities  and 
subordinated debt. For SME finance it can cover portfolios of loans, credit lines 
and securitized assets. 

The  EIF can also take equity participations in venture capital funds. 

In fulfilling its mission the EIF acts, on a commercial basis, as a complement to 
the  banking  sector  and in co-ordination with other  EU financial  institutions and 
instruments. 

II. Statistical Data 

Table A sets out in global terms the financial intervention of the Community for 
the years  1992 to 1996. 

Table  B  shows  other  Community  instruments  granted  for  the  years  1992  to 
1996. 

91 

3. 

4. 

5. 

6. 

Tables  C1  and  C2  indicate,  for  the  periods  1992-1994  and  1994-1996 
respectively,  the  average  annual  volume  of  Community  intervention  broken 
down by Member State whereever  possible. 

It should  be  noted that  a direct  comparison  between the volume  of  Community 
intervention  shown  here  and  the  national  State  aid  described  earlier  in  this 
Survey,  (i.e.  aid  financed  by  national  budgets.and  tax  systems)  is  misleading 
since in many cases it is difficult,  if not impossible, to determine the aid  element 
contained  in the Community  interventions, which is not paid directly to firms  like 
State aid. 

In  the  agricultural  sector,  making  comparisons  could  result  in  erroneous 
conclusions  being  drawn  owing  to  the  fact  that  those  who  benefit  from 
Community  intervention  are for the  most  part  not firms. As  regards  comparison 
between  the  different  Member  States,  the  benefits  of  Community  intervention 
are felt  by  all operators  in the  Union  irrespective  of where the expenditure  (i.e. 
export  refunds  or  intervention  buying)  took  place.  As  to  comparison  between 
Community  and  national  expenditure,  expenditure  by  the  Union  is  strongly 
influenced  by the  differences  between fluctuating  world  prices  and  Community 
prices  for  agricultural  products,  which  is  not  the  case  with  most  national 
expenditure. 

Further details of Community  Funds are given in the Technical Annex. 

Further detailed  information on Community funds and instruments can be found 
in the following documents: 

-  Research and Technological  Development Activities of the EU 

annual report  1995 
annual report  1996 

ISBN  92-77-93761-0 
ISBN  92-78-08603-7 

-  The Structural  Funds 
annual report  1995 
annual report  1996 

ISBN 92-78-10829-4 
ISBN 92-78-26044-4 

-  Cohesion  Financial  Instrument Cohesion  Fund 

combined  report  1993-1994 
annual report  1995 
annual report  1996 

ISBN  92-827-5739-0 
ISBN  92-827-9688-4 
ISBN  92-827-8877-6 

-  ECSC Financial  Report  1995 
ECSC Financial Report  1996 

ISBN  92-827-7933-5 
ISBN  92-828-0908-0 

-  European  Investment  Bank 

annual report  1995 

ISBN 92-827-6303-X 

92 

Table A 
Annual Community  Expenditure 

1992 

1993 

1994 

1995 

1996 

Million ECU 

EAGGF  Guarantee-Agriculture 

32005.3 

34496,3 

32831,4 

34377,5 

39041.3 

EAGGF  Guidance-Agriculture 

EAGGF  Guarantee-Fisheries 

EAGGF Guidance-Fisheries/EFFG- FIFG (from 1994) 

SOCIAL FUND 

REGIONAL FUND (1) 

COHESION FUND 

2874,8 

3092,4 

3335,4 

3609,0 

3934,5 

32,1 

358,4 

32,4 

35,5 

36,9 

34,1 

401,8 

391,1 

450,3 

334,4 

5894,2 

6306,8 

5826,8 

4382.9 

7145,8 

1374,0 

1635,0 

1803,0 

1970,0 

2037,0 

-

1560,6 

1853,1 

2151,7 

2443,7 

EC R&TD FRAMEWORK  PROGRAMME 

2391,0 

2094,0 

2019,0 

3019.0 

3183,0 

ECSC Grants 

Resettlement Art. 56.2(b) 
Steel social  Art. 56.2(b) 
Coal social Art. 56.2(b) 
Research Art. 55 
Interest relief Art. 54/56 

TOTAL 

154,8 
46,2 
50,0 
120,2 
106,0 

182,4 
60,0 
50.0 
124,6 
114,3 

157,0 
86.0 
40,0 
52,0 
51,5 

123,8 
41,3 
40,0 
61.4 
11,4 

56,3 
0.0 
23.2 
85,0 
36,7 

45407,0 

50154,6 

48481,8 

50275.2 

58046.8 

(1 )  part corresponding approximately to the concept of aid within the meaning of Article 92 of the Treaty 

n  I 

93 

Table B 
Other Community  Instruments 

ECSC (new loans issued) 

European Investment  Bank* 

European Investment Fund** 

1992 

1993 

1994 

1995 

1996 

1486,2 

16066,0 

-

918,3 

17672,6 

-

673,4 

17656,0 

-

402,8 

18603.0 

-

279,7 

20946,0 

2294,0 

Million ECU 

Financing provided within the EU 
Guarantees approved since inception in 1994 

94 

Table C1 
Community Average 

Annual Expenditure by Member State (1992-1994) 

Million ECU 

EAGGF 

EAGGF 

EAGGF 

Guarantee 

Guidance 

Guarantee 

Fisheries 

EAGGF 
Guid 

Fisheries 

EFFG-FIFG 

SOCIAL 

REGIONAL 

COHESION 

EC R&TD 

ECSC 

TOTAL 

FUND 

FUND 

FUND 

Framework 

GRANTS* 

(from 1993) 

Programme* 

BELGIUM 

DENMARK 

GERMANY 

GREECE 

SPAIN 

FRANCE 

IRELAND 

ITALY 

LUXEMBOURG 

NETHERLANDS 

PORTUGAL 

UNITED 
KINGDOM 

Technical 
assistance 

1278,7 

1257,0 

4979,7 

2522,5 

4011,5 

7680,5 

1513,9 

4469,0 

6,9 

2207,5 

519,2 

2664,7 

35,8 

28,7 

434,2 

353,8 

530,4 

602,5 

179,5 

421,3 

8,4 

24,5 

371,4 

110,2 

0,2 

3,4 

0,9 

0,9 

10,7 

10,1 

2.2 

1,1 

-

0,1 

1.8 

1,8 

4,8 

154,7 

29,6 

16,3 

36,1 

54,3 

798,5 

461,2 

127,1 

1146,7 

31,9 

7,8 

52,1 

-

7,9 

50,3 

20,0 

665,6 

307,0 

886,6 

5,0 

163,5 

597,9 

768,3 

30,0 

6,5 

304,4 

131,9 

273,7 

145,6 

120,6 

181,1 

3,9 

12,9 

279,3 

113,9 

306,2 

936,3 

154,9 

309,0 

0,4 

1504,0 

1379,5 

6534,0 

3812,6 

7036,4 

9136,2 

2285,9 

6011,2 

24,2 

2416,4 

2128,9 

3678,9 

0,4 

TOTAL 

33111,1 

3100,7 

33,2 

383,7 

6009,3 

1603,8 

1706,8 

2168,0 

2168,0 

465,0 

2633,0 

465,0 

48581,6 

It is not possible to effect a breakdown by Member State. 

95 

Table C2 
Community Average Annual Expenditure by Member State (1994-1996) 

Million ECU 

EAGGF 

EAGGF 

EAGGF 

Guarantee 

Guidance 

Guarantee 

Fisheries 

EAGGF 
Guid 

Fisheries 

EFFG-FIFG 

SOCIAL 

REGIONAL 

COHESION 

EC R&TD 

ECSC 

TOTAL 

FUND 

FUND 

FUND 

Framework 

GRANTS* 

Programme* 

AUSTRIA 

BELGIUM 

DENMARK 

GERMANY 

GREECE 

SPAIN 

FINLAND 

FRANCE 

IRELAND 

ITALY 

LUXEMBOURG 

NETHERLANDS 

PORTUGAL 

SWEDEN 

649,2 

110,2 

1312,7 

1340,8 

5534,3 

2627,2 

4297,9 

354,7 

8641,9 

1532,1 

3676,6 

15,3 

1793,7 

668,9 

348,7 

41,7 

29,4 

771,1 

352,8 

649,7 

106,1 

498,0 

198,9 

381,8 

6,7 

24,2 

390,8 

45,0 

106,9 

0,0 

0,2 

6,6 

0,3 

0,7 

6,1 

0,0 

12,0 

2,8 

0,5 

0,0 

0,1 

3,2 

1,3 

2,2 

1,0 

8,8 

24,0 

28,3 

12,8 

64,5 

109,6 

50,7 

967,7 

292,9 

174,9 

1327,4 

11,9 

24,1 

5,8 

37,4 

0,3 

6,7 

25,0 

20,4 

21,9 

52,9 

664,2 

316,1 

417,7 

4,3 

178,1 

520,5 

42,1 

829,6 

12,9 

18,4 

4,4 

211,9 

244,2 

535,5 

36,3 

160,8 

117,8 

248,3 

0,6 

15,2 

272,6 

26,0 

173,9 

386,1 

1181,5 

193,3 

387,0 

1,5 

837,8 

1491,4 

1455,9 

7513,6 

3916,7 

8173,0 

561,9 

10001,0 

2366,8 

4762,3 

27,2 

2018,0 

2268,0 

483,5 

4208,3 

1,5 

UNITED KINGDOM 

3073,8 

Technical Assistance 

TOTAL 

35867,8 

3713,3 

36,0 

403,3 

5838,3 

2078,8 

2149,4 

2740,0 

288,5 

53115,4 

2740,0 

288,5 

3028,5 

(*) 

It is not possible to effect a breakdown by Member State 

96 

ISSN 0254-1475 

COM(98) 417  final 

DOCUMENTS 

EN 

06  08  10  16 

Catalogue  number  :  CB-CO-98-439-EN-C 

ISBN  92-78-37965-4 

Office  for  Official  Publications  of the European  Communities 

L-2985  Luxembourg