Proposal for a Council Decision on the position to be taken by the Community within the Association Council established by the Europe Agreement signed on 12 June 1995 between the European Communities and their Member States, of the one part, and the Republic of Latvia, of the other part, with regard to the extension for a further period of five years in accordance with the provisions of Article 64 4(a) of the Europe Agreement with the Republic of Latvia
Date: 1999-11-22
Institutions: European Commission
Subjects: Latvia, State aid, association agreement (EU), regional aid

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 22.11.1999
COM(1999) 602 final

1999/0249 (ACC)

Proposal for a

COUNCIL DECISION

on the position to be taken by the Community within the Association Council
established by the Europe Agreement signed on 12 June 1995 between the
European Communities and their Member States, of the one part, and the
Republic of Latvia, of the other part, with regard to the extension for a further
period of five years in accordance with the provisions of Article 64 § 4(a) of the
Europe Agreement with the Republic of Latvia

(presented by the Commission)

EXPLANATORY MEMORANDUM

Extension for a further five year period in accordance with the provision of
Article 64 (4)(a) of the Europe Agreement with the Republic of Latvia

1.

2.

3.

4.

5.

6.

7.

Article 64 (4) (a) of the Europe Agreement with the Republic of Latvia
provides that, for the purpose of applying certain provisions relating to public
aid, during the first five years after the entry into force of the Agreement any
public aid granted by the Republic of Latvia shall be assessed taking into
account the fact that the Republic of Latvia shall be regarded as an area
identical to those areas of the Community eligible for state aid pursuant
Article 87(3)
the Treaty establishing the European Economic
Community.

(a) of

The period of five years referred above will expire on 31 December 1999.

In accordance with the last sentence of Article 64 (4)(a) of the Europe
Agreement, the Association Council shall, taking into account the economic
situation of the country concerned, decide whether that period should be
extended for a further five years.

The Republic of Latvia requested the extension of the above-mentioned
provision.

The main criterion for considering an area eligible for regional aid pursuant to
Article 87(3)(a) provisions is that GDP per capita should be less than 75% of
the average GDP of the EU-15, measured in PPS terms1.

The Commission has examined the requests on the basis of the figures and
information available for the Republic of Latvia. The data shows that in the
case of the Republic of Latvia GDP/capita measured in Purchasing Power
Standards (PPS) reaches 27 % of the Community average in 1997.

Based on the above,
the figures available
the Commission believes that
provide sufficient grounds for granting an extension to the Republic of Latvia
under the condition of receiving regular information on the economic situation
of the countries concerned relevant for the assessment of the application of
Article 64 (4) (a), in particular regarding regional GDP per capita figures in
PPS terms.

It is also necessary, in order to take due account of the differing levels of
economic development, to modulate the maximum aid intensities within the
different regions of the Republic of Latvia. To this effect, differentiation of aid
intensities will have to be set up jointly by the Commission and the Latvian
monitoring authority on the basis of regionalised data in accordance with the

1

OJ C74 of 10.3.1998, p. 9.

2

provisions laid down in the Guidelines for national regional aid2 applicable
within the Community.

8.

The Commission therefore requests the Council to adopt the attached proposal
for a Council Decision.

2

OJ C74 of 10.3.1998.

3

Proposal for a

COUNCIL DECISION

on the position to be taken by the Community within the Association Council
established by the Europe Agreement signed on 12 June 1995 between the
European Communities and their Member States, of the one part, and the
Republic of Latvia, of the other part, with regard to the extension for a further
period of five years in accordance with the provisions of Article 64 § 4(a) of the
Europe Agreement with the Republic of Latvia

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 133 in conjunction with the first sentence of Article 300(2) thereof,

Having regard to the proposal of the Commission of the European Communities,

(1) Whereas the European Community and their Member States signed the Europe

Agreement with the Republic of Latvia on 12 June 1995;

(2) Whereas Article 64(4)(a) of the Europe Agreement

the
lays down that
Association Council shall,
the economic situation of
taking into account
Latvia, decide whether the period within which any public aid granted by
Latvia shall be assessed taking into account the fact that Latvia shall be
regarded as an area identical to those areas of the Community described in
Article 87(3)(a) of the Treaty establishing the European Economic Community
should be extended for a further five years;

HAS DECIDED AS FOLLOWS:

The position to be taken by the Community within the Association Council
established by the Europe Agreement between the European Communities and their
Member States, of the one part, and the Republic of Latvia, of the other part, with
regard to the extension for a further five years in accordance with Article 64 § 4(a)
shall be based on the draft decision of the Association Council annexed to this
Decision.

Done at Brussels,

For the Council
The President

4

ANNEX

ASSOCIATION

BETWEEN THE

EUROPEAN UNION

AND THE REPUBLIC OF LATVIA

__________

- The Association Council -

DECISION No …/99 OF THE ASSOCIATION COUNCIL

BETWEEN THE EUROPEAN COMMUNITIES

AND THEIR MEMBER STATES, OF THE ONE PART,

AND THE REPUBLIC OF LATVIA, OF THE OTHER PART,

of

extending by five years the period within which any public aid

granted by Latvia will be assessed taking into account

the fact that Latvia is to be regarded as an area identical

to those areas of the Community described in Article 87(3)(a) of the Treaty

establishing the European Community

THE ASSOCIATION COUNCIL,

Having regard to the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Latvia, of the other part3 and in particular Article 64(4)(a) thereof,

Whereas Article 64(4)(a) of the Europe Agreement lays down that the Association
Council shall, taking into account the economic situation of Latvia, decide whether
the period within which any public aid granted by Latvia shall be assessed taking into
account the fact that Latvia shall be regarded as an area identical to those areas of the
Community described in Article 87(3)(a) of the Treaty establishing the European
Community should be extended for a further period of five years;

Whereas the GDP/capita of Latvia measured in Purchasing Power Standards reached
27% of the Community average in 1997 it is appropriate to make such an extension,

3

OJ L 26, 2.2.1998, p. 3.

5

HAS DECIDED AS FOLLOWS:

Article 1

The period within which any public aid granted by Latvia shall be assessed, taking
into account the fact that Latvia shall be regarded as an area identical to those areas of
the Community described in Article 87(3)(a) of the Treaty establishing the European
Community, shall be extended for a further period of five years.

Article 2

Within six months from the date of adoption of this decision,
the European
Commission and the national monitoring authority shall jointly evaluate, on the basis
of regionalised data delivered by Eurostat, the maximum aid intensities for national
regional aid in accordance with the provisions laid down in the Community
Guidelines for national regional aid4. Thereafter, the joint proposal shall be submitted
to the Association Committee which shall establish a decision to this effect.

Article 3

This Decision shall enter into force on the day of its adoption. It shall apply as from 1
January 2000.

Done at Brussels,

For the Association Council

The President

4

OJ C74 of 10.3.1998.

6