WRITTEN QUESTION E-0296/04 by Theresa Villiers (PPE-DE) to the Commission. Interim procedure on state aids paid in accession countries.
Date: 2004-02-06
Institutions: European Parliament, Provisional data
Subjects: EU Accession Treaty, State aid, accession to the European Union, application of EU law, control of State aid, restriction on competition, transitional period (EU)

3.4.2004

EN

Official Journal of the European Union

C 84 E/567

(2004/C 84 E/0644)

WRITTEN QUESTION E-0292/04

by Esko Seppänen (GUE/NGL) to the Commission

(6 February 2004)

Subject: Ship-building in Italy

In Trieste, Italy, in recent years, shipyard capacity has increased substantially and orders have been received
for ships in a way which prompts observers to suspect that operators there may have received State
shipyard subsidies in a manner which differs from the practice in other EU Member States and on more
favourable terms. Has the Commission investigated whether the Italian State is paying shipyard subsidies
on the same basis as other EU Member States, or whether different, more favourable conditions apply
there? If
this distorts both competition in shipbuilding and
subcontracting of work on ships.

the conditions are more favourable,

Answer given by Mr Monti on behalf of the Commission

(17 March 2004)

In the EU, the aid to ship-building is regulated, since 1 January 2004, by the Framework on State aid to
shipbuilding (1) that replaced Council Regulation (EC) No 1540/98 of 29 June 1998 establishing new rules
on aid to shipbuilding (expired on 31 December 2003) (2).

Italy has adopted a number of schemes based on the (EC) No 1540/98 Shipbuilding Regulation. These
schemes were notified and approved by the Commission.

The Commission is not aware of any unwarranted applications or any illegal aid granted by the Italian
State to the ship-building companies.

(1) OJ C 317, 30.12.2003.
(2) OJ L 202, 18.7.1998.

(2004/C 84 E/0645)

WRITTEN QUESTION E-0296/04

by Theresa Villiers (PPE-DE) to the Commission

(6 February 2004)

Subject: Interim procedure on state aids paid in accession countries

The competition chapter of the Accession Treaty provides for an interim procedure to be applied to state
aids paid in acceding countries prior to their accession, which focuses on whether aid is ‘applicable after
accession’.

In view of the number and complexity of the state aid cases, could the Commission please specify:

1. How will

it assess the criteria of applicability and,

in the absence of any definition, would the
Commission agree that it should be consistent with the plain meaning of the term? In this context,
would the Commission agree, for example, that a guaranty outstanding at accession, or post-accession
instalment payments of operating aid promised pre-accession, is ‘applicable’?

2. How can it ensure that its interpretation of ‘applicable after accession’ is neither too broad nor too
narrow, as this would greatly impact upon the number of distortive state aid measures to be reviewed
by the Commission under the Interim Procedure?

3. What criteria and conditions will it employ in deciding whether a state aid is still applicable after
accession? In particular, under what circumstances does the Commission consider aid granted to
individual companies to be ‘still applicable after accession’?

C 84 E/568

Official Journal of the European Union

EN

3.4.2004

Answer given by Mr Monti on behalf of the Commission

(17 March 2004)

Annex IV.3 of the Accession Treaty sets out the ‘interim mechanism’ procedure.
It provides a legal
framework for the assessment of aid schemes and individual aid measures put into effect in a new Member
State before the date of accession and still applicable after accession. This procedure applies to those
schemes and measures which have not already been included in the list of ‘existing aid’ measures attached
to Annex IV and which were put into effect from 10 December 1994 onwards. Measures that are
applicable after accession, which were put into effect before 10 December 1994 are regarded upon
accession as existing aid within the meaning of Article 88(1) of the EC Treaty.

Under this ‘interim mechanism’ procedure, the compatibility with the common market of the aid measures
applicable after accession must in the first instance be assessed by the national authority responsible for
monitoring State aid in the relevant acceding country.

This monitoring authority can seek legal certainty by notifying the measures to the European Commission.
Upon notification, the Commission will consider the compatibility with the common market of notified
measures; this would logically be the case only for those measures which are considered ‘applicable after’.

If the Commission has serious doubts regarding the compatibility of the notified measures with the ‘acquis
communautaire’,
it can raise objections within three months from the date of receiving a complete
notification. If the Commission does not object to notified measures within this deadline, the notified
measures will be regarded as existing aid from the date of accession.

Aid measures that are not applicable after accession cannot be examined by the Commission under the
procedures laid down in Article 88 of the EC Treaty. Given that the interim mechanism only determines
whether a given measure constitutes existing aid for the purpose of State aid procedures taking place after
accession,
it neither requires nor empowers the Commission to review aid measures which are not
applicable after accession.

Only such measures that can still give rise, after accession, to the grant of additional aid or to an increase
in the amount of aid already granted, may qualify as existing aid by virtue of the interim mechanism (cid:1) if
they fulfil the relevant conditions (cid:1) and are therefore subject to it. On the other hand, the interim
mechanism is devoid of any purpose in respect of aid measures that have already been finally and
unconditionally granted for a given amount before accession. Here again, in order to determine whether
this is the case, the relevant criterion is the legally binding act by which the competent national authorities
undertake to grant aid.

In recognising the immediate economic impact of state aid interventions, a measure must be assessed at
the point in time when the aid is granted; it is the legal commitment of the state that is synonymous with
the granting of aid and not the mere payment thereof. Any payment, current or future, under a legal
commitment is an act of simple implementation and cannot be construed to be new or additional aid.
Therefore, the Commission considers that for a measure to be considered as applicable after accession it
must be shown that it is liable to produce an additional benefit that was not known, or not precisely
known, when the aid was granted.

As it concerns more specifically State guarantees, it is difficult to take a definitive and general position,
given the wide range of different guarantees that potentially exist.

Indeed, only the appraisal of the different characteristics of a given guarantee can allow the Commission to
determine whether that guarantee can still give rise, after accession, to the grant of additional aid or to an
increase in the amount of aid already granted.