Proposal for a Council Decision on the position to be taken by the Community within the Association Committee established by the Europe Agreement between the European Communities and their Member States, of the one part, and Bulgaria, of the other part, with regard to the adoption of a Regional aid map on the basis of which regional aid granted by Bulgaria will be assessed
Date: 2003-08-07
Institutions: European Commission
Subjects: Bulgaria, European Association Agreement, accession to the European Union, control of State aid, eligible region, regional aid, regional policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 7.8.2003
COM(2003) 486 final

2003/0186 (ACC)

Proposal for a

COUNCIL DECISION

on the position to be taken by the Community within the Association Committee
established by the Europe Agreement between the European Communities and their
Member States, of the one part, and Bulgaria, of the other part, with regard to the
adoption of a Regional aid map on the basis of which regional aid granted by Bulgaria
will be assessed

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

This  is  a  proposal  for  the  adoption  of  a  Regional  aid  map  on  the  basis  of  which
regional aid granted by Bulgaria will be assessed.

According to Article 64(4)(a) of the  Europe  Agreement, the Parties  recognised that
during  the  first  five  years  after  its  entry  into  force,  any  regional  aid  granted  by
Bulgaria shall be assessed taking into account the fact that Bulgaria 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.

On  28  February  2000  the  EU-Bulgaria  Association  Council  adopted  decision
No 1/2000 with regard to the extension for a further period of five years of Bulgaria
as an area identical to those areas of the Community described in Article 87(3)(a) of
the Treaty establishing the European Community. The decision was applied as from
1 January 1998.

Article  2  of  decision  No  1/2000  obliged  Bulgaria  to  submit  the  GDP  per  capita
figures which have been harmonised at NUTS level II to the European Commission
within  six  months  of  the  date  of  the  adoption  of  the  decision.  On  that  basis,  the
Bulgarian  Ministry  of  Finance  and  the  European  Commission  jointly  evaluated  the
eligibility of the regions as well as the maximum aid intensities in relation thereto, in
order to draw up the regional aid map on the basis of the Community guidelines on
national regional aid 1.

The  joint  evaluation  by  the  Bulgarian  Ministry  of  Finance  and  the  European
Commission  demonstrates  that  per  capita  Gross  Domestic  Product,  measured  in
Power Purchasing Standards (GDP/PPS) in all NUTS level II regions in Bulgaria is
significantly  lower  than  60%  of  the  Community  average.  In  view  of  this  and  in
reference  to  Article  4(2)  of  the  Implementing  Rules  for  the  application  of  the
provisions on State aid of the Europe Agreement, it is considered that the duration of
the Regional aid map should not be limited to 31 December 2002, the expiry date of
the period for which Bulgaria is considered as an area identical to those areas of the
Community  described  in  Article  87(3)(a)  of  the  Treaty  in  accordance  with  the
decision  of  decision  No  1/2000  of  the  EU-Poland  Association  Council  of  28
February 2000. Instead, it is proposed to extend the duration of the regional aid map
until  the  date  of  accession  or  to  31  December  2006,  whatever  comes  first.  The
inclusion of 31 December 2006 as end date is important to maintain consistency with
the maps for the current Member States, all of which (except the map for Germany)
will  expire  on  that  date,  as  well  as  with  the  programming  of  Structural  Funds
support.

2.

According  to  the  Community  guidelines  on  national  regional  aid,  in  the  case  of
regions falling under Article 87(3)(a) of the Treaty the intensity of regional aid must not
exceed the  rate of  50%  net  grant  equivalent  (NGE),  except  in  the  outermost  regions,
where  it may  be  as  much  as  65%  NGE.  In  the  NUTS  level  II  regions  eligible  under
Article  87(3)(a)  whose  per  capita  GDP/PPS  is  greater  than  60%  of  the  Community
average,  the  intensity  of  regional  aid  must  not  exceed  40%  NGE,  except  in  the
outermost regions, where it may be as high as 50% NGE. The GDP/PPS of each region

1

OJ C 74 of 10.3.1998, p. 9.

2

                                                
and the Community average to be used in the analysis must relate to the average of the
last three years for which statistics are available.

All  the  above  mentioned  ceilings  may  be  raised  by  15  percentage  points  gross  grant
equivalent (GGE) in the case of aid granted to small and medium-sized enterprises2.

The  above  ceilings  constitute  upper  limits  which  apply  to  the  total  aid  whenever
assistance  is  granted  concurrently  under  several  regional  schemes,  and  regardless  of
whether it comes from local, regional, national or Community sources. Beneath  these
ceilings, regional aid intensity ceilings are to be adjusted to reflect the seriousness and
intensity  of  the  regional  problems  addressed.  The  seriousness  and  intensity  of  the
regional  problems  must  be  assessed  within  the  broader  context  of  the  Community
and of the countries with which Europe agreements have been concluded.

Bulgaria  consists  of  seven  NUTS  level  II  regions,  of  which  none  has  a  per  capita
GDP/PPS  that  exceeds  60%  of  the  Community  average,  according  to  statistical  data
available for the years 1998-2000;

In the proposed regional aid map, all NUTS level II regions are therefore granted the
Article  87(3)(a)  status.  The  relative  per  capita  GPP/PPS  levels  of  the  seven  NUTS
level II regions do not justify any differentiation of the regional aid intensity ceilings;

The maximum aid intensities applicable in each of the above mentioned regions, as
jointly  evaluated  by  the  Bulgarian  Ministry  of  Finance  and  the  European
Commission,  are  in  conformity  with  the  requirements  set  by  the  Community
guidelines on national regional aid;

The Commission hereinafter submits the  joint proposal  to the Council and requests
the Council to adopt the attached proposal for an Association Committee Decision.

3.

4.

5.

6.

2

OJ L 107 of 30.4.1996, p. 4.

3

                                                
2003/0186 (ACC)

Proposal for a

COUNCIL DECISION

on the position to be taken by the Community within the Association Committee
established by the Europe Agreement between the European Communities and
their Member States, of the one part, and Bulgaria, of the other part, with
regard to the adoption of a Regional aid map on the basis of which regional aid
granted by Bulgaria will be assessed

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) first subparagraph
first sentence and second subparagraph thereof;

Having regard to the proposal of the Commission.

Whereas:

(1)

(2)

(3)

(4)

The  European  Communities  and  their  Member  States  signed  the  Europe
Agreement with the Bulgaria in March 1993.

Article  64(4)(a)  of  the  Agreement  provides  that  the  Parties  recognise  that
during  the  first  five  years  after  the  entry  into  force  of  this  Agreement,  any
public  aid  granted  by  the  Bulgaria  shall  be  assessed  taking  into  account  the
fact that the Bulgaria shall be regarded as an area identical to those areas of the
Community  described  in  Article  92  (3)  (a)  of  the  Treaty  establishing  the
European Economic Community.

Article 4(2) of the Implementing Rules for the application of the provisions on
State Aid of the Europe Agreement, as adopted by the Decision No.2/2001 of
the  EU  Bulgaria  Association  Council  0f  23  May  2001,  provides  that  the
monitoring authorities shall jointly evaluate the  maximum aid  intensities  and
specific regional coverage of the areas eligible for national regional aid. They
shall  submit  a  joint  proposal  to  the  Association  Committee  which  shall
establish a decision to this effect.

Article 2 of the decision No 1/2000 of the EU – Bulgaria Association Council
of 28 February 2000 with regard to the extension for a further period  of  five
years  of  Bulgaria  as  an  area  identical  to  those  areas  of  the  Community
described  in  the  Article  87(3)(a)  of  the  Treaty  obliged  Bulgaria  within  six
months  of  the  date  of  the  adoption  of  the  decision  to  submit  the  GDP  per
capita figures which have been harmonised at NUTS level II to the European
Commission;

4

(5)

(6)

(7)

(8)

(9)

The  Bulgarian  Ministry  of  Finance  and  the  European  Commission  jointly
evaluated the eligibility of the regions as well as the maximum aid intensities
in relation thereto in order to draw up the regional aid map on the basis of the
Community guidelines on national regional aid 3;

According  to  Article  4(2)  of  the  Implementing  Rules,  in  conjunction  with
Article  2,  third  sentence  of  Decision  No  1/2000  of  the  EU-Bulgaria
Association  Council,  a  joint  proposal  shall  be  submitted  to  the  Association
Committee, which shall take a decision to this effect;

According to the Community guidelines on national regional aid, the eligibility
conditions  for  the  derogation  foreseen  under  Article  87(3)(a)  of  the  Treaty  are
fulfilled  if  a  region,  being  a  NUTS  level  II  geographical  unit,  has  a  per  capita
gross domestic product, measured in purchasing power standards (GDP/PPS), of
less than 75% of the Community average;

In the case of regions falling under Article 87(3)(a) the intensity of regional aid
must not exceed 50% NGE, except in the outermost regions, where it may be as
much as 65% NGE. In the NUTS level II regions eligible under Article 87(3)(a)
whose per capita GDP/PPS is greater than 60% of the Community average, the
intensity  of  regional  aid  must  not  exceed  40%  NGE,  except  in  the  outermost
regions, where it may be as high as 50% NGE;

The  GDP/PPS  of  each  region  and  the  Community  average  to  be  used  in  the
analysis must relate to the average of the last three years for which statistics are
available;

(10) Within the limit of 75% NGE, all the above mentioned ceilings may be raised by
15 percentage points gross grant equivalent (GGE) in the case of aid granted to
small and medium-sized enterprises4;

(11)

The above aid intensity ceilings constitute upper limits which apply to the total
aid whenever assistance is granted concurrently under several regional schemes,
and regardless of whether it comes from local, regional, national or Community
sources.  Beneath  these  upper  limits,  regional  aid  intensity  ceilings  are  to  be
adjusted  to  reflect  the  seriousness  and  intensity  of  the  regional  problems
addressed;  the  seriousness  and  intensity  of  the  regional  problems  must  be
assessed  within  the  broader  context  of  the  Community  and  of  the  countries
with which Europe Agreements have been concluded;

(12) Bulgaria  consists  of  seven  NUTS  level  II  regions,  of  which  none  has  a  per
capita  GDP/PPS  that  exceeds  60%  of  the  Community  average,  according  to
statistical data available for the years 1998-2000;

(13)

The relative per capita GPP/PPS levels of the seven NUTS level II regions do not
justify any differentiation of the regional aid intensity ceilings;

3

4

OJ C 74 of 10.3.1998, p. 9.
OJ L 107 of 30.4.1996, p. 4.

5

                                                
(14)

The  maximum  aid  intensities  applicable  in  each  of  the  above  mentioned
regions,  as  jointly  evaluated  by  the  Bulgarian  Ministry  of  Finance  and  the
European  Commission,  are  in  conformity  with  the  requirements  set  by  the
Community guidelines on national regional aid;

HAS DECIDED AS FOLLOWS:

Sole article

The  position  to  be  taken  by  the  Community  within  the  Association  Committee
established  by  the Europe  Agreement  between  the  European  Communities  and  their
Member  States,  of  the  one  part,  and  Bulgaria,  of  the  other  part,  with  regard  to  the
adoption  of  the  regional  aid  map  shall  be  based  on  the  draft  decision  of  the
Association Committee annexed to this Decision.

Done at Brussels,

For the Council
The President

6

ANNEX

ASSOCIATION
BETWEEN THE
EUROPEAN UNION
AND BULGARIA

__________

- The Association Committee-

DECISION No …/2002 OF THE ASSOCIATION COMMITTE

BETWEEN THE EUROPEAN COMMUNITIES

AND THEIR MEMBER STATES, OF THE ONE PART,

AND BULGARIA, OF THE OTHER PART,

of

adopting a regional aid map on the basis of which regional aid

granted by Bulgaria will be assessed

THE ASSOCIATION COMMITTEE,

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

Having  regard  to  Article  4(2)  of  the  Implementing  Rules  for  the  application  of  the
provisions on State aid of the Europe Agreement, as adopted by Decision No 2/2001
of the EU-Bulgaria Association Council of 23 May 2001;

Having regard to decision No 1/2000 of the EU-Bulgaria  Association Council  of 28
February  2000  with  regard  to  the  extension  for  a  further  period  of  five  years  of
Bulgaria  as  an  area  identical  to  those  areas  of  the  Community  described  in  Article
87(3)(a)  of  the  Treaty  establishing  the  European  Community,  and  in  particular  its
Article 2, third sentence;

Whereas:

(1)

(2)

Article  2  of  the  decision  No  1/2000  obliged  Bulgaria  within  six  months  of
the date of the adoption of the decision to submit the GDP per capita figures,
which have been harmonised at NUTS level II, to the European Commission;

the  Bulgarian  Ministry  of  Finance  and  the  European  Commission  jointly
evaluated the eligibility of the regions as well as the maximum aid intensities

7

in relation thereto in order to draw up the regional aid map on the basis of the
Community guidelines on national regional aid 5;

according  to  Article  4(2)  of  the  Implementing  Rules,  in  conjunction  with
Article  2,  third  sentence  of  Decision  No  1/2000  of  the  EU-Bulgaria
Association  Council,  a  joint  proposal  shall  be  submitted  to  the  Association
Committee, which shall take a decision to this effect;

according  to  the  Community  guidelines  on  national  regional  aid,  the
eligibility conditions for the derogation foreseen  under  Article  87(3)(a)  of the
Treaty are fulfilled if a region, being a NUTS level II geographical unit, has a
per  capita  gross  domestic  product,  measured  in  purchasing  power  standards
(GDP/PPS), of less than 75% of the Community average;

in the case of regions falling under Article 87(3)(a) the intensity of regional aid
must not exceed 50% NGE, except in the outermost regions, where it may be as
much as 65% NGE. In the NUTS level II regions eligible under Article 87(3)(a)
whose per capita GDP/PPS is greater than 60% of the Community average, the
intensity  of  regional  aid  must  not  exceed  40%  NGE, except in  the  outermost
regions, where it may be as high as 50% NGE;

the  GDP/PPS  of  each  region  and  the  Community  average  to  be  used  in  the
analysis must relate to the average of the last three years for which statistics are
available;

within the limit of 75% NGE, all the above mentioned ceilings may be raised
by 15 percentage points gross grant equivalent (GGE) in the case of aid granted
to small and medium-sized enterprises6;

the above aid intensity ceilings constitute upper limits which apply to the total
aid  whenever  assistance  is  granted  concurrently  under  several  regional
schemes, and regardless of  whether  it comes from  local,  regional,  national  or
Community sources. Beneath these upper limits, regional aid intensity ceilings
are  to  be  adjusted  to  reflect  the  seriousness  and  intensity  of  the  regional
problems  addressed;  the  seriousness  and  intensity  of  the  regional  problems
must  be  assessed  within  the  broader  context  of  the  Community  and  of  the
countries with which Europe Agreements have been concluded;

Bulgaria  consists  of  seven  NUTS  level  II  regions,  of  which  none  has  a  per
capita  GDP/PPS  that  exceeds  60%  of  the  Community  average,  according  to
statistical data available for the years 1998-2000;

the relative per capita GPP/PPS levels of the seven NUTS level II regions do
not justify any differentiation of the regional aid intensity ceilings;

the  maximum  aid  intensities  applicable  in  each  of  the  above  mentioned
regions,  as  jointly  evaluated  by  the  Bulgarian  Ministry  of  Finance  and  the

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

5

6

OJ C 74 of 10.3.1998, p. 9.
OJ L 107 of 30.4.1996, p. 4.

8

                                                
European  Commission,  are  in  conformity  with  the  requirements  set  by  the
Community guidelines on national regional aid;

HAS DECIDED AS FOLLOWS:

Article 1

The entire territory of Bulgaria shall be regarded as an area eligible for regional aid,
identical to those areas in the Community described in Article 87(3)(a) of the Treaty
establishing the European Community.

Article 2

The regional aid intensity ceilings applicable throughout Bulgaria shall be limited to
50% net grant equivalent.

The regional aid intensity ceilings referred to under Article 2, paragraph 1, may be raised
by  15 percentage  points  gross grant  equivalent  in  the case  of aid  granted to small  and
medium-sized enterprises7.

The regional aid intensity  ceilings referred to under Article  (2), paragraphs  1 and 2,
shall  constitute  upper  limits  which  apply  to  the  total  aid  whenever  assistance  is
granted  concurrently  under  several  regional  schemes,  and  regardless  of  whether  it
comes from local, regional, national or Community sources.

Article 3

This Decision shall  enter into force on  the  day of  its  adoption.  It  shall expire on 31
December 2006 or the date of Bulgaria’s accession to the European Union, whichever
comes earlier.

Done at Brussels,

For the Association Committee
The President

7

OJ L 107 of 30.4.1996, p. 4.

9