European Parliament resolution on the Commission's seventh Survey on State aid in the European Union in the manufacturing and certain other sectors (COM(1999) 148 - C5-0107/1999 - 1999/2110(COS))
Date: 2000-01-18
Institutions: Committee on Economic and Monetary Affairs, European Parliament
Subjects: State aid, cultural heritage, economic development, processing industry, quality of the environment, social development

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Calls on the Commission to introduce a league table similar to that for the internal market, to

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pinpoint the Member States with the highest and the lowest levels of State aid;

Urges that the Commission should publish an annual document analysing the impact of State aid

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on competitiveness, price levels and the mobility of the factors of production;

22.
Reiterates its approval of State aids which are considered as being in the common interest, for
example in the areas of R&D, SMEs, education, energy saving and environmental protection, but believes
it to be important for the Commission to produce uniform criteria and conditions for this type of State
aid;

23.
Calls on the Member States to grant more aid in the fields of energy saving and environmental
protection in order to achieve the objectives of the Kyoto Protocol, since these areas account for only
3 % of all aid granted;

Calls on the Commission to place greater emphasis than in the past on examining fiscal measures as

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well as State aid for their effect in distorting competition;

Calls on the Commission to report to Parliament regularly on the progress made in introducing

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competition policy in the countries which have applied for accession to the EU;

Takes the view that the current legal framework for EU competition law must be taken over com-
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pletely by the applicant states; however, the rules on competition in individual cases should be applied
flexibly during a transitional phase; urges the Commission to offer the applicant countries adequate assist-
ance in adapting their rules on competition;

Calls on the Commission to submit to Parliament a report outlining its ideas on the future shape of

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the international dimension of competition policy;

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Advocates a larger role for the World Trade Organisation (WTO) in international competition pol-
icy; therefore calls on the Council to instruct the Commission to conduct negotiations aimed at concluding
multilateral agreements on international competition law in the context of the WTO; at the same time,
urges the Commission to incorporate uniform minimum competition standards and the establishment of
independent competition authorities in all WTO member countries in the guidelines for combating prac-
tices detrimental to competition, which interfere with trade and investment;

29.

Instructs its President to forward this resolution to the Commission and the Council.

11. State aid for manufacturing (1995-1997)

A5-0087/1999

European Parliament resolution on the seventh survey on state aid in the European Union in the
manufacturing and certain other sectors (COM(1999) 148 ( C5-0107/1999 ( 1999/2110(COS))

The European Parliament,

: having regard to the Commission’s survey (COM(1999) 148 : C5-0107/1999),

: having regard to the Commission’s XXVIIIth Report on Competition Policy 1998 (SEC(1999) 743 :

C5-0121/1999),

: having regard to Articles 2, 6, 87, 88 and 127(2) of the EC Treaty,

: having regard to its resolution of 19 November 1997 (1) on the Commission’s first triennal report on

economic and social cohesion (COM(1996) 542),

(1) OJ C 371, 8.12.1997, p 89.

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: having regard to its resolution of 13 November 1996 (1) on industrial restructuring and relocation in

the European Union,

Tuesday 18 January 2000

: having regard to Rule 160 of its Rules of Procedure,

: having regard to the report of the Committee on Economic and Monetary Affairs (A5-0087/1999),

A. whereas the application of clear rules of competition policy is essential for the proper functioning of

the internal market,

B. whereas, under the EC Treaty, the assessment of compatibility of aid with the common market essen-

tially rests with the Commission,

C. whereas the provisions in Article 87(2) and (3) on the compatibility of certain State aid should help,
inter alia, to promote economic and social development, important projects of common European
interest, the development of certain industries and culture, the preservation of the cultural heritage
and the quality of the environment,

D. whereas the overall amount of annual aid spent by Member States of the Union to the sectors con-
cerned is € 95 billion on average during the period from 1995 to 1997, and whereas aid to the
manufacturing sector constitutes an approximate share of 40 % of this sum,

E. whereas annual aid spent by the Member States both in terms of overall aid and in terms of aid to the
manufacturing sector has decreased considerably in relation to the previous period 1993-1995
(down 13 % for overall aid and from 3,8 % to 2,6 % as a percentage of value added in the manufactur-
ing sector),

F. whereas, however, the noted decrease in aid is mainly due to a fall in aid to the new Bundesländer in

Germany,

G. whereas State aid per capita shows considerable, although lessening, disparities between Member
States and whereas these disparities are at least partly due to different economic cycles and structures,

H. whereas State aid per capita in the manufacturing sector is highest in Italy, the new Bundesländer
(because the needs for adjustment have not yet been completely fulfilled) and Ireland, but whereas
Ireland is clearly in the lead when national and Community aid are taken together,

I. whereas Articles 7 and 28 respectively of Council Regulations (EC) No 994/98 on the application of
Articles 92 and 93 of the EC Treaty to certain forms of horizontal aid measures (2) and No 659/1999
establishing more specific provisions concerning the application of Article 93 of the EC Treaty (3)
establish an ‘Advisory Committee on State aid’, consisting of representatives from the Member States
and chaired by the Commission, but excluding representatives from the European Parliament,

J. whereas the Commission has been empowered, by abovementioned Council Directive (EC) No 994/98,
to define the rules for block exemptions within the meaning of Articles 1 and 2 of the same Directive,

K. whereas State aid comes in many different forms, not all of which are covered by the Commission’s

Survey,

General comments on State aid

1.
Considers that an efficient competition policy is a precondition for the proper functioning of the
internal market and Economic and Monetary Union; recognises that state aid monitoring is an important
dimension of competition policy and therefore supports the work performed in this field by the Commi-
ssion, which has considerably improved monitoring instruments;

(1) OJ C 362, 2.12.1996, p. 147.
(2) OJ L 142, 14.5.1998, p. 1.
(3) OJ L 83, 27.3.1999, p. 1.

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2.
Underlines, however, the fact that Articles 87(2) and (3) of the EC Treaty deem State aid to be
compatible with the internal market under certain conditions; Article 87(3)(e) also provides that the Coun-
cil may specify by decision, on a proposal from the Commission, other categories of aid which can be
compatible with the internal market; urges the Council to involve Parliament more closely in all decisions
in the legislative procedure and proposes the next Intergovernmental Conference apply the codecision
procedure to this Article, under which decisions in the Council are taken by qualified majority;

3.
Emphasises that state aid measures will remain necessary in order to support the overall aims of the
EC Treaty including those laid down in Article 6 (sustainable development), Article 16 (services of general
interest) and Article 158 (economic and social cohesion);

4. Warns in particular against the potentially harmful role of state aid when it comes to inciting the
relocation of companies from one Member State to another, which may lead to subsidy shopping by
enterprises without any value added for the common goals of the EU;

5.
Calls for the adjustments to monitoring of State aid which were initiated by abovementioned Council
Regulation (EC) 994/98 to be taken as an opportunity to bring future state aid rules and procedures into
line to a greater extent with the requirements of efficiency;

6.
Asks to be kept fully informed about the process of adoption of regulations exempting categories of
aid from the obligation to notify as provided for in Article 88(3) of the EC Treaty (‘block exemptions’);
insists, in the same spirit, on being regularly informed about the opinions delivered by the Advisory Com-
mittee on State Aid and any deviating positions of Member States;

Considers that it will be necessary in future to establish arrangements to ensure that aid is used for

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the specific purposes for which it has been authorised;

8.
Calls for the elimination of illegal state aid given across the EU and regrets the high level of illegal
state aid given in some Member States; such illegal aid gives an unfair advantage to the businesses which
receive it and distorts competition, leading to an inefficient and wasteful allocation of scarce resources;

9.
Is aware of the staffing problems which hamper the Directorate-General for Competition as regards
the fulfilment of its present and future tasks; deems it necessary that fallow resources should be activated,
staff structure scrutinised and resources redirected within the Commission in order to ensure optimum
functioning of the Directorate-General for Competition;

General remarks on the Seventh Survey

10. Welcomes the Seventh Survey on state aid in the EU, as well as the fact that it is now published
annually; appreciates the fact that the Directorate-General for Competition provides on its web-site general
and case-related information for the public; hopes, however, that the scope and quality of the information
made available free of charge to the public over the Internet will be further improved;

11.
Regrets that data on state aid are mostly given only in an extremely generalised form and do not
reveal sufficiently detailed information on either the purposes of aid granted, the sectors concerned or the
companies that receive aid; this information is necessary in order for a satisfactory political assessment to
be undertaken;

12.
Notes that the figures presented do not reveal all state aid, in particular concerning R&D contracts
intended for military purposes and the aid for R&D in the nuclear energy sector, which is a crucial short-
coming from a political point of view and should be corrected as soon as possible;

13.
Asks the Commission therefore, in view of the different shortcomings concerning data available in
the present Survey, to monitor in close cooperation with the Member States the possibilities for improving
data quality in time for the Ninth Survey; asks the Member States to deliver all data requested on time and
to keep full records of state aid granted;

14. Welcomes the fact that the Survey, for the first time, considers special tax regimes as constituting
state aid and encourages the Commission to scrutinise further Member States’ tax regimes in this respect;

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15. Welcomes the fact that, the Commission, also for the first time, has presented a provisional over-
view of EU-wide State aid devoted to support for Foreign Direct Investment; shares the Commission’s view
that such aid might encourage relocation and thus counteract efforts to generate employment in the
Union; wishes the forthcoming Survey on State aid to include an evaluation of the effects of such aid on
EU business and employment, as well as on the industrial and craft sector in the recipient countries;

Calls on the Commission to favour aid instruments of types C and D, which require recipients to

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make repayments or take other active measures;

17.
Considers it regrettable that in certain Member States the volume of case-related aid granted to
individual businesses has grown sharply, as such aid may have undesirable effects on the operation of
the internal market, distorting competition;

18.
Highlights the need for the Survey to include in its main part (and not only in the Annex as is now
the case) the figures concerning aid given through Community programmes and instruments, in order to
disclose the total amount of public money involved in subsidising enterprises;

19.
Reiterates its demand that the Commission should come forward in the near future with a proposal
for a register of public aid covering all kinds of public aid given to companies and to set out, at least, the
size and the names of companies having received the bulk of aid; this register should be updated regularly
: at least once a year : and made public;

20.
Calls on the Commission to include in the register of state aid a ‘scoreboard’ similar to the single
market scoreboard which would indicate which Member States have the highest and lowest levels of state
aid;

21.
Asks the Commission to make strenuous efforts to draw public attention to the register of state aids
and the state aid scoreboard, in order to name and shame those Member States which are illegally sub-
sidising their domestic industries to the detriment of business and consumers across Europe; asks the
Commission to make the register readily available to European citizens and businesses via the internet;

Asks the Commission to take a more ‘evaluative’ approach to the question of State aid and to
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undertake, and include in the Survey, an assessment of Member States’ state aid practices in the light of
the overall aims of the Union as set out in Articles 2 and 6 of the EC Treaty;

the economic as well as

Asks furthermore, the Commission, to include in its annual Survey every second year an in-depth
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assessment of
impact of state aid practices
(‘cross-disciplinary assessment’); highlights in this context the need for different services within the Com-
mission to cooperate more closely in the evaluation concerning the economic and other effects linked to
state aid;

social and environmental

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Asks the Commission to expand upon its conclusion (paragraph 82) that the ‘candidate countries’
compliance with the State aid acquis well in advance of accession is indispensable, since specific regulation
before accession and transitional periods afterwards might be necessary to allow for the creation of a
diversified, competitive and environmentally sustainable economic structure in these countries;

Calls on the Commission, in connection with repayment of unlawful State aid, to institute effective

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arrangements to harmonise the rules on repayments;

On particular sectors

26.
Is concerned about the amount of state aid given to the motor vehicle sector which, against the
overall trend of state aid, rose by 24 % in comparison with the previous period; questions, in the light of
growing overcapacities in this sector and the environmental implications of the growing carfleet, whether
these aids are to be considered compatible with Article 6 of the EC Treaty;

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Is concerned that in certain individual cases aid to maritime transport has been mixed with aid to
shipbuilding, which forms part of manufacturing industry and the limits on which have been laid down in
a separate directive;

Instructs its President to forward this resolution to the Commission, the Council, the Committee of

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the Regions and the Economic and Social Committee.

*

*

*

12. Report on state aid to the steel industry (1998)

A5-0073/1999

European Parliament resolution on the Commission Report on the implementation in 1998 of
Commission Decision No 2496/96/ECSC of 18 December 1996 establishing Community rules for
(COM(1999) 94 ( C5-0104/1999 ( 1999/
State aid to the steel

industry (Steel Aid Code)

2107(COS))

The European Parliament,

: having regard to the Commission Report (COM(1999) 94 : C5-0104/1999)),

: having regard to Article 8 of Decision No 2496/96/ECSC of 18 December 1996 (1),

: having regard to the Treaty establishing the European Coal and Steel Community, which expires in

2002,

: having regard to the report of the Committee on Economic and Monetary Affairs (A5-0073/1999),

A. whereas the Commission Report relates to the second year of the sixth Steel Aid Code,

B. whereas efforts should continue to be made in future to eliminate obstacles to competition and serious

distortions of the market balance,

C. whereas under Article 4(c) of the ECSC Treaty, subsidies or aids granted by States to the iron and steel

industry or special charges imposed by States, in any form whatsoever, are prohibited,

D. whereas the rules allow the granting of aid to the steel industry in certain clearly defined cases as an

emergency measure,

1. Welcomes the Commission’s report on the implementation of the Steel Aid Code in 1998; notes,
however, that not all aspects of steel aid are treated;

2.
Stresses that restricting state aid to research and development, environmental protection, plant clo-
sures and special aids for Greece represents a sensible framework for the prevention of distortions of
competition;

Supports the Commission’s decision of 9 December 1998 pursuant to Article 88 of the ECSC Treaty

3.
to initiate a procedure on the basis of Decision No 2496/96/ECSC;

4.

Calls on the Member States to comply with their reporting requirement more promptly in future;

5.
Criticises the Commission because, in spite of the clear wording of the Steel Aid Code, which applies
to all types of aid, it has on several occasions authorised aid for steel undertakings which do not fall within
the categories set out in the Code;

Calls for a thorough assessment of this unequal treatment, inter alia in the light of the judgments of

6.
the European Court of Justice;

(1) OJ L 338, 28.12.1996, p. 42.