2001/272/EC: Commission Decision of 14 March 2000 on the redefinition of assisted areas under the joint Federal Government/Länder scheme for improving regional economic structures in Germany for the period 1 January 2000 to 31 December 2003 — West Germany and Berlin (Text with EEA relevance.) (notified under document number C(2000) 809)
Date: 2000-03-14
Institutions: European Commission
Subjects: European Commission, Germany, State aid, control of State aid, exchange of information, regional aid

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COMMISSION DECISION

of 14 March 2000

on the redefinition of assisted areas under the joint Federal Government/Länder scheme for
improving regional economic structures in Germany for the period 1 January 2000 to 31
December 2003 — West Germany and Berlin

(notified under document number C(2000) 809)

(Only the German text is authentic)

(Text with EEA relevance)

(2001/272/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-
munity, and in particular the first subparagraph of Article 88(2)
thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to those provisions (1) and having regard to their
comments,

Whereas:

I. PROCEDURE

(1) On 30 March 1999, Germany sent a 12-page fax
announcing that two annexes notifying the regional aid
map of Germany (2) would be sent by mail. The annexes
were registered as received by the Secretariat-General on
23 April 1999. At a meeting on 11 and 12 May 1999 in
Bonn, the Commission received oral explanations and
asked for additional information in writing. On 19 May
1999, Germany sent clarifications on the notification.

(2) By letter dated 17 August 1999, the Commission in-
formed Germany that it had decided to declare the
regions proposed under Article 87(3)(a) of the EC Treaty
and their respective maximum aid intensities compatible
with the common market (the five new Länder, State aid
Case N 195/99) and that it had decided to initiate the

procedure laid down in Article 88(2) of the EC Treaty in
order to examine the compatibility of the regions pro-
posed under Article 87(3)(c) of the EC Treaty (the West
German assisted areas and Berlin, State aid Case C 47/99).

(3) The Commission decision to declare a part of the German
regional aid map compatible with the common market
and to initiate the formal
investigation procedure in
respect of the other part of the German regional aid map
was published in the Official
the European
Communities (3).
the
Commission called on interested parties to submit their
comments.

In relation to the second part,

Journal of

(4) The Commission received five comments from interested
parties. It forwarded them to Germany, which was given
the opportunity to react; its comments were received by
fax dated 21 January 2000.

(5) The Commission received written comments from Germ-
any on 17 September 1999. Additional information and
comments were submitted on 2 February 2000. Meetings
were held in Brussels (12, 18 and 23 November 1999)
and in Berlin (2 December 1999) between representatives
of the Commission and the German Government.

II. DETAILED DESCRIPTION OF THE ASSISTED AREAS
PROPOSED BY GERMANY PURSUANT TO ARTICLE 87(3)(C)
OF THE EC TREATY

(6) Under German law, the Planning Committee set up under
the Federal Law on the joint Federal Government/Länder
scheme for improving regional economic structures (here-
inafter called the joint Federal Government/Länder
scheme), decides which regions are eligible for regional
aid and under which derogation of the EC Treaty. Such a
decision was taken on 25 March 1999 and subsequently
notified to the Commission on 23 April 1999.

(1) OJ C 340, 27.11.1999, p. 8.
(2) For the definition of ‘regional aid map’, see point 5.1 of the
guidelines on national regional aid (OJ C 74, 10.3.1998, p. 9).

(3) OJ C 340, 27.11.1999, p. 8.

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(7) The national decision of 25 March 1999 has partly been
declared compatible with the common market as far as
the five new Länder of Brandenburg, Saxony, Saxony-
Anhalt, Thuringia and Mecklenburg-Western Pomerania,
proposed under Article 87(3)(a) of the EC Treaty, and
their maximum aid intensities for the period 1 January
2000 to 31 December 2003 are concerned. However, as
far as the regions proposed under Article 87(3)(c) of the
EC Treaty are concerned, the Commission initiated the
formal investigation procedure pursuant to Article 88(2)
of the EC Treaty and Article 4(4) of Council Regulation
(EC) No 659/1999 (4).

(8)

In initiating the procedure, the Commission expressed
doubts over the following points of the notification:

1.

2.

3.

Compliance with points 3.10.1 and 3.10.2 of the
guidelines on national regional aid for not presenting
the methodology in a clear and detailed manner for
regions proposed under Article 87(3)(c) of the EC
Treaty. The Commission is asking Germany to
describe the methodology and all its ancillary aspects
applicable
under
regions
Article 87(3)(c) of the EC Treaty.

proposed

all

to

Compliance with the first indent of point 3.10.3 of
the guidelines in so far as municipalities (Gemeinden)
which are not part of labour market regions pro-
posed to the Commission under Article 87(3)(c) of
the EC Treaty are eligible for regional aid (see also
Annex to this Decision).

Compliance with the last sentence of point 3.10 of
the guidelines, because Germany applies a maximum
population ceiling for (c) regions of 23,4 % of its
total population. Therefore, the ceiling as notified
by Germany goes beyond the limit acceptable in the
common interest and could not, at this stage, be
considered compatible with the common market.

4. As Berlin has not been clearly identified as a region
under Article 87(3)(a) or (c) of the EC Treaty, the
Commission has no option but to raise doubts about
its status.

under Article 87(3)(c) of
the EC Treaty, which
have a higher per capita GDP/PPS and a lower
unemployment rate than the respective Community
average and which do not adjoin a region with
Article 87(3)(a) status.

6. Doubts as to whether the three regions of Kronach,
Hersfeld-Rotenburg and Göttingen as well as Passau
and Wunsiedel were notified by Germany on the
basis of the exception provided for in the fourth
paragraph of point 4.8 of the guidelines.

7. Doubts as to whether the principle of adjustment as
expressed in the last paragraph of point 4.8 of the
guidelines has been complied with.

(9) This Commission Decision relates only to the assisted
regions and permitted maximum aid intensities which
fall under the derogation of Article 87(3)(c) of the EC
Treaty according to the German proposal as amended by
the German Government during the formal investigation
procedure.

(a) Homogeneous geographical unit

(10) In order to comply with the first indent of point 3.10.3
of the guidelines on national regional aid, Germany
proposes the notion of the ‘labour market region’ (Arbeits-
marktregion). The term is used for a statistical unit the
underlying idea of which is to identify an economic zone
in terms of
functionality, rather than administrative
boundaries. Therefore, Germany selects the labour market
region instead of NUTS III as the homogeneous geo-
graphical unit for its regions.

(11) Germany justifies its choice with the argument that
economic problems to be targeted with regional aid
policy do not, in general, correspond to administrative
borders. Moreover, the indicators selected (see recital 12)
were difficult to obtain and would lead to a distorted
picture if measured on the level of NUTS III. Germany
had opted for a geographical unit which best reflected
economic reality in the form of commuter patterns and
work-place accessibility. Ideally, this geographical unit
represented a functionally interdependent region with a
maximum of internal interdependence and a minimum
of external interdependence. A labour market region was
at least as big as, and usually bigger than, a NUTS level III
region.

5.

Compliance with the fourth paragraph of point 4.8
of the guidelines for not respecting the regional aid
intensities in the labour market regions proposed

(b) Methodology and indicators

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

(12) The labour market regions in West Germany are ranked
using a synthetic indicator based on the following four
weighted subindicators:

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Indicator

Weighting

(e) Aid intensities

Average unemployment rate from 1996 to
1998

Per capita income in 1997 of employed
persons paying social security contributions

Infrastructure indicator

Employment forecast up to 2004

40 %

40 %

10 %

10 %

(13) The purpose of the indicators is to draw an accurate
picture of which regional problems exist in West Germ-
any and which regions require regional aid. The region
with the least favourable socioeconomic situation, as
determined by the synthetic indicator, is ranked in first
place with the others following in ascending order.

(16) During the formal

investigation procedure, Germany
submitted the following maximum aid intensities for
West German labour market areas proposed for a dero-
gation under Article 87(3)(c) of the EC Treaty:

28 % (gross) for SMEs, and

18 % (gross) for large undertakings.

(17) In future, it is to be explicitly provided for in the outline
plan (Part II point 2.5.1 in conjunction with footnote 11)
that the maximum aid intensities allowed, even in cases
of cumulation of aid, may neither exceed the maximum
gross intensity rate stipulated in the plan nor the
maximum aid intensity rates approved by the Com-
mission in nge.

(18) For Berlin, Germany notified the following maximum aid

rates:

43 % (gross) for SMEs and

(c) The labour market region of Berlin

28 % (gross) for large undertakings.

(14) The labour market region of Berlin consists of the city of
Berlin and its surrounding area, which belongs to the
Land of Brandenburg and entirely surrounds Berlin.
Brandenburg meets the eligibility criteria for assistance
under Article 87(3)(a) of the EC Treaty and was accepted
as an assisted area by the Commission. Germany has
therefore proposed only the city of Berlin as an
Article 87(3)(c) area, although it undertakes to treat the
whole labour market region as if it were an Article 87(3)(c)
assisted area. Germany explains that this means that not
all the potential for granting aid will be used in the
Brandenburg area surrounding Berlin (5).

(d) List of regions and population ceiling

(15) On 2 February 2000, after the procedure had been
initiated, Germany submitted a list comprising 41 labour
market regions and the city of Berlin (see Annex 1) (6).
These
of
a
14 546 097 inhabitants, accounting for 17,7 % of the
total German population (7), and are considered by
Germany to be the regions with the highest regional
policy priority.

population

regions

have

total

(f) Possible cumulation

(19) In future, it is to be explicitly provided for in the outline
plan (Part II point 2.5.1 in conjunction with footnote 11)
that
the maximum aid intensities, even in cases of
cumulation of aid, may neither exceed the maximum
gross intensity rate stipulated in the plan nor the
maximum aid intensity rates approved by the Com-
mission in nge.

III. COMMENTS FROM INTERESTED PARTIES

(20) The Commission received five comments from interested
parties. All five comments were submitted by German
Länder or regions affected by the regional aid map and
concern the ‘exchange of
(Fördergebietsaus-
tausch) (8). The arguments put forward can be summar-
ised as follows.

regions’

(21) It is pointed out that the Commission accepted the
exchange of regions before the guidelines were adopted
and that regions or municipalities adjoining regional aid
areas covered by the derogation in Article 87(3)(a) or (c)
of the EC Treaty have to deal with the problem of
different aid intensities.

(5) Comment of Germany on the decision to initiate the formal

investigation procedure, fax of 17 September 1999, p. 10.

(6) The originally notified list of regions contained 60 labour market
regions and accounted for 23,4 % of the total German population.
(7) The total German population is based on data from 31 December

1997 and amounts to 82 057 379 inhabitants.

(8) See recitals 12 and 38 of the decision to initiate the formal
investigation procedure (OJ C 340, 27.11.1999, p. 8) which
explain that Germany removed some municipalities from the
proposed labour market regions and replaced them by munici-
palities that do not belong to a proposed labour market region.

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(22) It is also argued that the doubts raised by the Commission
in its decision to initiate the formal investigation pro-
cedure concerning the exchange of regions would lead
to exclusion of these regions from the joint Federal
Government/Länder
scheme. Another argument put
forward is that, even in areas in which the method applied
under the joint Federal Government/Länder scheme does
not result in the status of a labour market region, the
Commission should intervene if the socioeconomic data
for the area warrant it.

(23) One of the observations explains that the exchange of
regions allows the Länder the possibility of deviating from
the criteria fixed for the country as a whole and allows
them to adopt a flexible approach to specific structural
problems. In this context, the subsidiarity argument is
used. Länder should have a say in the choice of the regions
on the basis of their own criteria.

the opinion that

(28) In relation to the population ceiling Germany maintains
that 23,4 % of its total population should be covered by
regions falling under Article 87(3)(c) of the EC Treaty and
regrets that the Commission insists on the maximum
population ceiling as laid down on 21 January 1999.
Although Germany is still of
the
population ceiling set for Germany (see Commission
decisions communicated to Germany by letters dated
24 February 1998 (SG(98) D/1670) and 30 December
1998 (SG(98) D/12384)) was determined in violation of
the principle of equal treatment, it did propose a modified
list (Annex) during the formal investigation procedure
corresponding to the population ceiling set by the
Commission. Germany points out that regional aid is of
the utmost importance for the necessary structural change
in Germany (9). For purely practical reasons, therefore,
Germany was changing the regional aid map, without
giving up its legal opinion in relation to the population
ceiling.

IV. COMMENTS FROM GERMANY IN RESPONSE TO THE
COMMENTS FROM INTERESTED PARTIES

(29) The eligibility of the city of Berlin as a regional aid area is
assessed in recitals 14 and 44 to 47 of this Decision.

(24) The comments of the German Government in response
to the comments submitted by third parties may be
summarised as follows: Germany reiterates that exchang-
ing regions is of enormous importance for regional
policy. It only covers exceptional economic situations
which cannot be properly handled using the method
developed for
the joint Federal Government/Länder
scheme. Furthermore, some structural problems have
arisen in the recent past which are not reflected in the
indicators. Exchanging regions is also necessary in order
to mitigate the effects of different aid levels in neighbour-
ing regions or municipalities. Germany concludes that,
although exchanging regions is not covered by the letter
of the guidelines, it is in line with its spirit. The regional
aid map was changed for purely practical reasons, but
Germany maintains its view that the exchange of regions
is a valid tool for selecting eligible regions.

(30) The question of the aid intensities for regions which have
a higher per capita GDP/PPS and a lower unemployment
rate than the respective Community average and which
do not adjoin an Article 87(3)(a) area, and regions which
do adjoin an Article 87(3)(a) area is dealt with in
recitals 57, 58, 61 and 62 of this Decision.

(31) Concerning the principle of adjustment, see recitals 67

and 68 of this Decision.

(32) Concerning the cumulation rules, see recital 64 et seq. of

this Decision.

V. COMMENTS FROM GERMANY IN RESPONSE
TO THE INITIATION OF THE FORMAL
INVESTIGATION PROCEDURE

(25) The formal

investigation procedure was initiated in

relation to eight points (see recital 8 of this Decision).

VI. ASSESSMENT

(33) Germany notified its regional aid map on 23 April 1999.
The Commission approved the aid map for the period
1 January 2000 to 31 December 2003 for the regions
eligible under Article 87(3)(a) of the EC Treaty.

(26) Concerning the methodology, recitals 12, 13, 41, 42 and
43 of this Decision describe the position of Germany and
the Commission’s assessment.

(34) This Decision authorises the regional aid map for the
period 1 January 2000 to 31 December 2003 for the
regions eligible under Article 87(3)(c) of the EC Treaty,

(27) Germany’s comments on the exchange of regions are set
out in recital 24; the Commission’s response is set out in
recitals 69 et seq.

(9) Germany’s comments on the decision to initiate the formal

investigation procedure, fax of 2 February 2000, p. 2.

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provided Germany complies with the conditions and
requirements set out in Article 2. The two Decisions
together determine the German regional aid map as
defined in point 5.1 of the guidelines.

(b) Methodology and indicators

(35) Germany’s notification of 2 February 2000, amended in
relation to the Article 87(3)(c) areas, is examined in the
light of Article 87(3)(c) of the EC Treaty and, in particular,
in the light of the guidelines.

(a) Homogeneous geographical unit

(36) Pursuant to the first

the

regions

indent of point 3.10.3 of the
to
guidelines,
Article 87(3)(c) of the EC Treaty must conform to NUTS
level
in justified circumstances, to a different
homogeneous geographical unit. Only one type of geo-
graphical unit may be submitted by each Member State.

proposed

pursuant

III or,

(41) As set out in points 3.10.1 and 3.10.2 of the guidelines,
the methodology and the indicators for the regions
proposed under Article 87(3)(c) of the EC Treaty must
satisfy a number of conditions.

income,

(42) Germany presents its methodology in a clear and detailed
fashion, and the Commission can therefore assess its
merits. Each indicator is based on reliable statistical
sources. Unemployment,
infrastructure and
employment up to 2004 may be regarded as relevant to
the examination of the socioeconomic circumstances of
a labour market region. All the indicators are based on
statistical series covering a period including at least the
three years prior to the notification or are derived from
the last survey carried out, where the relevant statistics
are not available on an annual basis. The fourth indicator
is based on a statistical projection method using time
series data from at least the last three years.

(37) As described in recital 11, Germany justifies its departure
III on the grounds that regional
from NUTS level
economic problems in Germany cannot be properly
reflected at this level.

(43) The objective subindicators make it possible to measure
the disparities in the socioeconomic circumstances of the
regions in question. The Commission therefore accepts
that Germany has met all conditions
in
points 3.10.1 and 3.10.2 of the guidelines.

set out

(38) The Commission notes that Eurostat uses NUTS level III
for the purposes of collecting regional statistics in the
Community. The demarcation is based almost exclusively
on administrative boundaries as communicated to Euros-
tat by the various Member States. In Germany, the NUTS
level III corresponds to the level of a district (Kreis). From
a statistical point of view, comparing the 15 Member
States, these are small units, both in terms of population
and in terms of geographical area.

(39) Consequently, Germany uses a concept which, compared
with NUTS level III, covers a larger geographical area and
a higher population figure. All the labour market regions
consist of one or more NUTS level III regions. The
underlying idea is the functional economic areas identified
by commuter patterns and accessibility analyses.
In
Germany’s view, the statistical units so obtained best
reflect the regional problems that need to be dealt with
by regional policy measures.

(c) The labour market region of Berlin

(44) The city of Berlin, a German Land in its own right,
corresponds to the statistical units of NUTS levels I, II,
and III at the same time. Together with its surrounding
region, which belongs to the Land of Brandenburg, Berlin
is a labour market region. The NUTS level II region of
Brandenburg meets the exemption criteria of Article
87(3)(a) of the EC Treaty, a fact which is acknowledged
by the Commission.

(45) Germany argues that it would be unfair if the city of
Berlin could not be proposed under Article 87(3)(c) of
the EC Treaty on the grounds that part of the labour
market region meets the socioeconomic criteria for
classification as an Article 87(3)(a) region.

(40) The Commission accepts that Germany is using the
labour market regions as a homogeneous geographical
unit and acknowledges that this is compatible with the
first indent of point 3.10.3 of the guidelines.

(46) The Commission acknowledges the special geographical
position of the city of Berlin. Germany undertakes in any
case to treat the entire labour market region of Berlin as
an Article 87(3)(c) assisted area. This would mean the aid
potential would not be fully used in the surrounding area

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of Brandenburg (10). The Commission notes that this
commitment means that aid intensities in those parts of
Brandenburg that belong to the labour market region of
Berlin may not exceed the aid intensities approved for
Berlin and that no operating aid may be granted.

17,7 % for the assisted areas coming under Article
87(3)(c) of the EC Treaty. The proposed regions, with a
total of 14 546 097 inhabitants, account for 17,7 %
of the total German population and can be declared
compatible with the common market.

(47) All these considerations lead the Commission to conclude
that the city of Berlin is covered by the derogation of
Article 87(3)(c) of the EC Treaty.

(d) List of assisted regions, population ceiling and

standard deviation

(48) The original notification of the list of assisted regions was
not in line with the guidelines and with the assisted
area population ceilings set by the Commission. The
population ceiling was exceeded (see recital 44 of the
decision initiating the procedure), and Germany did not
comply with the principle of a single, homogeneous
geographical unit, since there was an exchange of regions
(see recital 38 of the Decision).

(49) During the course of the procedure, so as to bring
the notification into line with the guidelines, Germany
provided a list of regions that was reduced to the
population ceiling set by the Commission and which
complied with the principle of a single, homogeneous
geographical unit.

(50) In selecting the regions for the Annex, Germany did
not exchange any regions. Furthermore, the population
ceiling set for Germany is complied with: on 21 January
1999, the Commission published the national ceilings for
regional aid coverage under the exceptions provided for
in Article 87(3)(a) and (c) of the EC Treaty for the period
2000 to 2006 (OJ C 16, 21.1.2001, p. 5). Germany was
informed by letter dated 30 December 1998 (SG(98)
D/12384). According to this, the population ceiling for
Germany is 34,9 %, a figure which applies to the entire
territory of Germany and covers the regions eligible
under Article 87(3)(a) and (c) of the EC Treaty. In the
notification of 23 April 1999, Germany proposed
17,16 % of
its total population for the derogation
provided for in Article 87(3)(a) of the EC Treaty; the
Commission declared this compatible with the common
market. Germany therefore has a population ceiling of

(10) Germany’s comments on the decision to initiate the formal
investigation procedure, fax dated 17 September 1999, p. 10.

(51) As stated in the third indent of point 3.10.3 of the
guidelines, the list of regions must be arranged on the
basis of the indicators selected. The regions proposed
must show significant disparities (half of the standard
deviation) compared with the average of the potential
Article 87(3)(c) regions in Germany, in respect of one or
other indicator used in the method.

(52) The Commission has checked the ranking order and the
deviation requirement and considers that this criterion
has been complied with in relation to the Annex.

(53) The list of assisted regions presented by Germany and set
out in the Annex to this Decision can therefore be
regarded as compatible with the common market pursu-
ant to Article 87(3)(c) of the EC Treaty.

(54) The Commission also considers it necessary for Germany
to take measures at national level to demarcate quite
clearly those regions covered by Article 87(3)(a) of the
EC Treaty from those regions which are covered by
Article 87(3)(c) of the EC Treaty and to make it clear
that only such regions are entitled to receive regional
assistance within the meaning of the guidelines. The
Commission therefore considers it appropriate to impose
a requirement along these lines in this Decision.

(e) Aid intensities

(55) Point 3.10 of the guidelines requires Member States to
notify the relative aid intensities in the Article 87(3)(c)
areas in accordance with points 4.8 and 4.9 of the
guidelines. Under the second paragraph of point 4.8 of
the guidelines, the aid intensity must not in principle
exceed 20 % nge. However,
if the proposed Article
87(3)(c) region has, at NUTS level III, both a higher per
capital GDP/PPS and a lower unemployment rate than
the respective Community average, the fourth paragraph
of point 4.8 of the guidelines provides that the intensity
of regional aid must not exceed 10 % nge. The fourth
paragraph of point 4.8 of the guidelines provides that,
exceptionally, in the case of regions subject to the ceiling
of 10 % nge, a maximum aid intensity of 20 % nge may
be approved for regions (corresponding to NUTS level III
level or smaller) adjoining a region with Article 87(3)(a)
status. Under point 4.9 of the guidelines, a supplement of
10 percentage points gross is allowed for SMEs, except
transport firms.

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(56) Germany has notified for the assisted regions in West
Germany 28 % (gross) for SMEs and 18 % (gross) for
large firms and, for Berlin, 43 % (gross) for SMEs and
28 % (gross) for large firms (see recitals 16 and 18).

the guidelines, since footnote 11 in point 2.5.1 in Part II
of the outline plan does not refer specifically to Berlin.
Consequently, the aid intensities for the city of Berlin can
be considered compatible with the guidelines only if the
following nge rates are not exceeded:

(57) A comparison of the Commission’s letter to Germany
dated 30 December 1998 (SG(98)D/12384) with the list
of regions in the Annex shows that the following NUTS
level III regions have both a higher per capita GDP/PPS
and a lower unemployment rate than the respective
Community average and do not adjoin regions with
Article 87(3)(a) status: Hameln-Pyrmont, the cities of Hof
and Passau.

— 20 % nge

and a 10 % gross supplement for SMEs.

(63) Germany has complied with the criterion that no sup-
plements may be granted to SMEs in the transport sector,
since the outline plan is not applicable to transport firms
in general.

(58) The following regions proposed in the Annex are covered
by the exception provided for in the fourth paragraph
of point 4.8 of the guidelines: Wunsiedel, Hersfeld-
Rotenburg, Göttingen and the city of Berlin.

(f) Possible cumulation

(59) Germany states that, because of Land-specific circum-
stances, the aid intensities cannot be given in nge, but
only in gross terms. However, Germany has undertaken
to comply with the gross aid intensities and accepts that
the Commission approves the maximum aid intensities
in nge for reasons of comparability between Member
States. Since the nge cannot be equated with the gross
value of a given grant of aid, the Commission is bound
to approve maximum aid intensities for the German
regional aid map in nge, even though the notification was
submitted in gross terms. The supplements for SMEs are
expressed in gross terms.

(60) For those regions for which the guidelines specify a
maximum aid intensity of 10 % nge, it is made clear in
the relevant outline plan (footnote 11 in point 2.5.1 in
Part II) that the nge ceiling must not be exceeded.

(61) The Commission therefore considers that the following
maximum aid intensities in West Germany are compatible
with the guidelines:

— in the areas Hameln-Pyrmont, the cities of Hof and

Passau:

— 10 % nge

and a 10 % gross supplement for SMEs,

— for the remaining West German assisted areas,

except the city of Berlin:

— 18 % nge

and a 10 % gross supplement for SMEs.

(62) The gross aid intensities for the city of Berlin (43 % and
28 %, see recital 58) exceed the maximum specified in

(64) Point 4.18 of the guidelines provides that the regional aid
intensity ceilings, expressed in nge, apply to the total
amount of aid, whether the aid comes from local,
regional, national or Community sources. This rule
ensures that whenever regional aid is granted to an
undertaking, relating to the same eligible costs,
the
amount of aid must be totalled and may not exceed the
aid ceiling for a given region. Point 4.20 of the guidelines
relates to the combining of regional aid with aid for other
purposes. In such cases, the most favourable ceiling will
apply (11).

(65) In Part II, point 2.5.1 of the outline plan, Germany
provides for the possibility of cumulation of regional aid.
In conjunction with footnote 11 in point 2.5.1 of the
outline plan, this provision explicitly makes it clear that,
even in the event of cumulation with other types of aid,
the maximum aid intensities allowed must not exceed the
gross intensity rate laid down in the outline plan or the
maximum aid intensities approved by the Commission in
nge.

(66) As noted in recital 62, footnote 11 does not apply to the
city of Berlin. Consequently, the cumulation rules do not
comply with the guidelines. However, if the national legal
framework clearly stipulates that
the maximum aid
intensities of 20 % nge and 20 % nge plus 10 % gross in
the case of SMEs will be complied with, even in the event
of cumulation of regional aid,
the Commission can
consider the cumulation rules to be compatible with the
guidelines.

(11) It should be noted that, in the notification of the 29th outline
plan (see N 767/99), Germany lays down the rules for the
combining of regional aid with aid for other purposes. Conse-
quently, this aspect is dealt with in the context of the notification
registered under N 767/99.

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6.4.2001

(g) Principle of adjustment

(67) The Commission accepts Germany’s argument that, with
the exception of the city of Berlin, the German maximum
aid intensities are below the ceilings laid down in the
guidelines. Below this ceiling, Germany has a further two-
tier distinction (see recital 61). This gradation and the fact
that in each individual case the maximum aid intensity
ceiling laid down in the regional aid map may be
exhausted only if specific structural effects so require,
leads the Commission to conclude that the regional aid
map takes appropriate account of the criteria set out in
point 4.8 of the guidelines.

only very small geographical units (municipalities) and
only a small percentage of the population (2 %)’ and that
‘such an exchange merely helps to mitigate the effects
arising from the juxtaposition of regions receiving differ-
ent levels of assistance’, only allow the conclusion to be
drawn that
the
guidelines is of a less serious nature.

the infringement of point 3.10 of

(73) Germany’s view that

the exchange of regions is in
accordance with the spirit though not the letter of the
guidelines is not explained in any greater detail and is not
shared by the Commission.

(68) The Commission also notes that

the maximum aid
intensities have not been increased in relation to those in
the previous German regional aid map (see State aid Case
N 613/96).

(74) In any case, Germany has amended its list of assisted
regions eligible under Article 87(3)(c) of the EC Treaty
without applying the exchange of regions method. The
amended proposal is deemed compatible with the com-
mon market.

(h) Exchange of regions

VII. CONCLUSIONS

(69) Point 3.10 of the guidelines sets out the main criteria
which the Member States must comply with in selecting
the regions to be proposed as regions eligible for
assistance under Article 87(3)(a) and (c) of the EC Treaty.
An exchange of regions clearly goes beyond these criteria
and results indirectly in the introduction of a new
indicator.

(70) The indicators and the methodology are intended to
enable Member States to select those regions which are
in a particularly difficult socioeconomic situation and
hence require State aid in accordance with the guidelines.

(71) Member States can set their own priorities in the choice
of methods and indicators. The Commission does not
intervene in such decisions, nor does it have the power
to correct the outcome, if both are acceptable. While the
assisted regions are selected at Federal level, the Länder
are involved in that they have a say in the determination
of the indicators and the methodology.

The German regional aid map could, in the Commission’s
view, be deemed compatible with the common market if:

1. Germany introduces at national

level measures
which quite clearly distinguish those regions which
are eligible under Article 87(3)(a) of the EC Treaty
from those regions which are eligible under
Article 87(3)(c) of the EC Treaty and which clearly
establish that only these regions are entitled to
receive regional aid pursuant to the guidelines;

2.

3.

the aid intensities for the city of Berlin are limited to
the ceiling of 20 % nge, plus a possible supplement
of 10 % gross for SMEs;

possible cumulation is limited to the regional aid
ceilings approved by the Commission,

HAS ADOPTED THIS DECISION:

Article 1

(72) The various arguments put

forward to justify the
exchange of regions, for example, the argument that ‘this
practice does not lead to an increase in the population
living in assisted (c) regions, because the municipalities
affected by this exchange programme comply with the
national population ceiling’, that ‘this exchange involves

The regional aid map for the period 1 January 2000 to
31 December 2003 in relation to the regions eligible under
Article 87(3)(c) of the EC Treaty is compatible with the
common market, subject to the conditions set out in Article 2.

6.4.2001

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Official Journal of the European Communities

L 97/35

Article 2

Article 3

Germany shall

introduce at national

1.
level measures
which quite clearly distinguish those regions which are eligible
under Article 87(3)(a) of the EC Treaty from those regions
which are eligible under Article 87(3)(c) of the EC Treaty and
which clearly establish that only these regions are entitled to
receive regional aid within the meaning of the guidelines on
national regional aid.

Germany shall inform the Commission, within two months of
notification of this Decision, of the measures taken to comply
with it.

Article 4

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 14 March 2000.

2.
The maximum aid intensities for the city of Berlin shall,
even in cases of cumulation, be limited to 20 % nge, plus a
possible supplement of 10 % gross for SMEs.

For the Commission

Mario MONTI

Member of the Commission

L 97/36

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Official Journal of the European Communities

6.4.2001

ANNEX

List of areas assisted under Article 87(3)(c) of the EC Treaty representing 17,73 % of the population

No

Land

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Population (at 31 December 1997)

District
(Kreis)

Labour
market
region

Total
(%)

1

Berlin

Berlin

City of Berlin and munici-
palities in Brandenburg in
the Berlin conurbation
including City of Berlin

Total

Population of assisted area: 3 425 759.

4 253 418

3 425 759

3 425 759

4,18

No

2

Labour market region

Land

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Schleswig-
Holstein

14

18

Husum

Lübeck

LK Nordfriesland

City of Lübeck

LK Ostholstein

Population (at 31 December 1997)

District
(Kreis)

Total
(%)

Labour
market
region

162 084

215 376

199 229

414 605

22

Flensburg

City of Flensburg

85 547

LK Schleswig-Flensburg

192 895

278 442

33

Heide

LK Dithmarschen

Total

Population of assisted area: 990 904.

135 773

990 904

1,21

Population (at 31 December 1997)

Labour
market
region

Total
(%)

District
(Kreis)

88 950

99 419

56 057

244 426

100 900

Labour market region

Land

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

No

3

Lower
Saxony

1

2

4

5

6

8

9

Wilhelms-
haven

City of Wilhelmshaven

LK Friesland

LK Wittmund

Helmstedt

LK Helmstedt

Uelzen

LK Lüchow-Dannenberg

52 129

Leer

LK Uelzen

LK Leer

Bremerhaven LK Cuxhaven

Osterode

LK Osterode am Harz

Goslar

LK Goslar

96 541

148 670

157 051

200 636

87 531

158 979

6.4.2001

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Official Journal of the European Communities

L 97/37

No

Land

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Population (at 31 December 1997)

District
(Kreis)

Labour
market
region

Total
(%)

10

Emden

City of Emden

51 546

Einbeck

Hameln

LK Aurich

LK Northeim

LK Hameln-Pyrmont

Göttingen

LK Göttingen

Cloppenburg LK Cloppenburg

Westerstede

LK Ammerland

Celle

LK Celle

Nordenham LK Wesermarsch

Holzminden

LK Holzminden

Nordhorn

LK Grafschaft-Bentheim

12

15

16

23

26

27

31

34

37

182 991

234 537

152 988

163 723

268 099

144 526

106 688

180 269

94 551

83 008

127 470

Total

2 654 052

3,23

Population of assisted area: 2 654 052.

No

Land

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

4

Bremen

6

Bremerhaven City of Bremerhaven

Total

Population of assisted area: 126 997.

Population (at 31 December 1997)

District
(Kreis)

Total
(%)

Labour
market
region

126 997

126 997

0,15

No

5

Labour market region

Land

Ranking

Name

Hagen

Gelsen-
kirchen

North Rhine-
Westphalia

17

24

28

32

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

City of Hagen

City of Gelsenkirchen

City of Bottrop

City of Herne

Population (at 31 December 1997)

Total
(%)

Labour
market
region

209 027

District
(Kreis)

286 432

121 565

177 863

Kreis Recklinghausen

662 309 1 248 169

Heinsberg

Kreis Heinsberg

Duisburg

City of Duisburg

City of Oberhausen

529 062

223 399

243 796

Kreis Wesel

469 980 1 222 441

40

Dortmund

City of Dortmund

City of Hamm

Kreis Unna

Total

Population of assisted area: 4 126 560.

594 866

181 194

427 067 1 203 127

4 126 560

5,03

L 97/38

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Official Journal of the European Communities

6.4.2001

No

Land

6

Hessen

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Eschwege

Werra-Meißner-Kreis

Hersfeld

LK Hersfeld Rotenburg

Population (at 31 December 1997)

District
(Kreis)

Total
(%)

Labour
market
region

116 580

132 618

7

19

35

38

Kassel

City of Kassel

199 453

LK Kassel

244 192

443 645

Schwalm-
Eder

Schwalm-Eder-Kreis

193 802

886 645

1,08

Total

Population of assisted area: 886 645.

No

7

Labour market region

Land

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Rhineland
Palatinate

3

Pirmasens

City of Pirmasens

City of Zweibrücken

Population (at 31 December 1997)

Labour
market
region

Total
(%)

District
(Kreis)

47 184

35 885

11

21

Idar-
Oberstein

Kaiserslau-
tern

Total

Population of assisted area: 647 780.

LK Südwestpfalz

105 843

188 912

LK Birkenfeld

90 746

City of Kaiserslautern

Donnersbergkreis

LK Kaiserslautern

LK Kusel

101 315

77 279

109 917

79 611

368 122

647 780

0,79

No

Land

8

Saarland

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

30

39

Merzig

LK Merzig-Wadern

Saarbrücken Association

of

towns
(Stadtverband) Saarbrücken
LK Saarlouis

Population (at 31 December 1997)

Total
(%)

Labour
market
region

106 138

District
(Kreis)

355 865

215 216

Total

826 938

1,01

LK Neunkirchen

149 719

720 800

Population of assisted area: 826 938.

6.4.2001

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No

Land

Labour market region

Ranking

Name

Cities or rural districts
(Landkreise — ‘LK’)
comprised in labour
market region

Population (at 31 December 1997)

District
(Kreis)

Total
(%)

Labour
market
region

82 080

9

Bavaria

13

20

Freyung

LK Freyung-Grafenau

Marktredwitz

LK Wunsiedel

88 378

LK Tirschenreuth

80 544

168 922

25

Hof

City of Hof

LK Hof

29

36

41

Regen-Zwiesel

LK Regen

Cham

Passau

LK Cham

City of Passau

LK Passau

Total

Population of assisted area: 860 462.

51 781

110 340

162 121

82 573

130 325

50 468

183 973

234 441

860 462

1,05