European Parliament resolution on the role of direct State aid as a tool of regional development (2004/2255(INI))
Date: 2005-12-15
Institutions: Committee on Development, European Parliament, Provisional data
Subjects: State aid, aid system, economic and social cohesion, regional aid, regional development, regional disparity

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Thursday 15 December 2005

40.
Suggests that the Commission undertake a comprehensive study on the existence and functioning of
ADR organisations to identify the need for other initiatives and support at EU level which could supplement
ECC-Net and which could also be better targeted at the specific situation of the new Member States;

Encourages the establishment in all Member States of independent consumer protection agencies with

41.
full power to bring proceedings before national courts in order to protect the interests of consumers;

42.
Encourages the Parliament and the Council as the budgetary authority to consider devoting more
financial resources to enhancing consumer protection in the new Member States, along the lines, as set
out, of this resolution;

Stresses that the EU institutions should maintain their focus on consumer protection in the new

43.
Member States, since there are still serious issues of concern in this regard, as raised by this resolution;

44.
Suggests that the same institutions mainstream consumer issues in their legislative and non-legislative
work, taking special account of the specific situation of the new Member States; stresses that it is particu-
larly important to take into account the specific situation of the new Member States in relation to consumer
and health strategy;

*

*

*

Instructs its President to forward this resolution to the Council, the Commission and the govern-

45.
ments of the Member States.

P6_TA(2005)0527

Direct State aid as a tool of regional development

European Parliament resolution on the role of direct State aid as a tool of regional development
(2004/2255(INI))

The European Parliament,

— having regard to the draft communication from the Commission — Guidelines on National Regional

Aid for 2007-2013 (draft Regional Aid Guidelines),

— having regard to the ‘non-paper’ by the Commission's DG Competition for discussion at a first multi-

lateral meeting with experts from the Member States,

— having regard to Articles 87(3), 158 and 299(2) of the EC Treaty,

— having regard to the Commission Communication — Third report on economic and social cohesion

(COM(2004)0107),

— having regard to its resolution of 22 April 2004 on the third report on economic and social cohe-

sion (1),

— having regard to its position of 12 April 2005 on the proposal for a Regulation of the European
Parliament and the Council amending Regulation (EC) No 1059/2003 of the European Parliament and
of the Council on the establishment of a common classification of territorial units for statistics (NUTS)
by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta,
Poland, Slovenia and Slovakia to the European Union (2),

(1) OJ C 104 E, 30.4.2004, p. 1000.
(2) Texts adopted, P6_TA(2005)0083.

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— having regard to its resolution of 6 July 2005 on the proposal for a Council regulation laying down
general provisions on the European Regional Development Fund, the European Social Fund and the
Cohesion Fund (1),

— having regard to the objectives of the Lisbon and Gothenburg Strategies,

— having regard to the conclusions of the Barcelona and Gothenburg European Councils, and in particular
the provisions under which the Member States agreed to reduce the level of State aids in the European
Union, limiting them to subjects of common interest, including economic and social cohesion,

— having regard to Rule 45 of its Rules of Procedure,

— having regard to the report of the Committee on Regional Development (A6-0364/2005),

A. whereas cohesion policies and State aid policies are complementary, and structural fund regulations and
regional aid guidelines should be as consistent as possible, especially in the definition of geographic
areas to benefit from support,

B. whereas direct State aid in its key function as an instrument of regional development is a major tool for
achieving the priority cohesion objective, and whereas a variable approach must therefore be taken to
such aid in the general treatment applicable to State aid in the context of a market economy,

C. whereas State aids have an impact on economic, social and territorial cohesion within the EU,

D. whereas most Member States have reduced State aid and reoriented it towards horizontal objectives in
line with EU strategy, and reorientation towards cohesion objectives is less evident since regional aid
has declined,

E. whereas the cohesion objective should be strengthened by reinforcing the territorial dimension,

F. whereas regional State aid oriented to promoting the economic development of certain disadvantaged
regions and economic growth areas takes into account the need for an appropriate increase in the
strategic economic competitiveness of the region concerned (Article 87(3)(c) of the Treaty),

G. whereas the Commission should also take into account the total value of State aid per capita in each

particular region when evaluating the effects of regional State aids,

H. whereas only about 10 % of overall State aid is regulated by the draft Regional Aid Guidelines, whereas

State aid can give a positive stimulus to economic development in a region lagging behind,

I. whereas the allocation of State aid should be fully transparent so as to constitute an equitable instru-
ment for balanced sustainable regional development and the strengthening of economic and social
cohesion, and also offer a means of conducting State aid impact analyses and thereby allowing the
application of the ‘better value for money’ principle,

J. whereas a variety of sophisticated and precise indicators of regional development and competitiveness
should be used when setting criteria and evaluating the effects of State aid, including the total amount
of aid granted to particular region,

K. whereas promoting growth and jobs creation should be the paramount aim when granting regional aid,

(1) Texts Adopted, P6_TA(2005)0277.

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Notes the Commission's draft communication on the guidelines on national regional aid for 2007-

1.
2013;

Thursday 15 December 2005

Calls on the Commission not to adopt draft Regional Aid Guidelines until the financial perspective for
2.
the European Union has been set by the Member States and the regional and cohesion policy budget has
been decided;

3.
Believes that, on the basis of the principle of fairness, the ceilings of aid intensities applicable to all the
categories set out in Article 87(3)(a) of the Treaty and to the outermost regions should remain the same in
the new programming period as in the previous 2000-2006 period;

4.
Asks that the differential should not exceed 10 percentage points with a view to preventing relocations
and consequent destructive competition between disadvantaged areas in the Member States within the
meaning of Article 87(3)(a) of the Treaty;

5.
Submits that the outermost regions should automatically receive the status of areas within the scope
of Article 87(3)(a) of the Treaty, and by the same token suggests the same for regions suffering from severe
and permanent natural, geographic or demographic handicaps;

6.
Stresses the importance of all dimensions of cohesion and requests that appropriate attention be paid
to rural areas, areas affected by industrial transition, urban areas in decline and regions which suffer from
severe and permanent natural or demographic handicaps, such as regions with very low population density,
cross-border regions, islands and mountain regions; calls on the Commission, however, to consider drawing
up specific criteria that will make it possible to identify the above-mentioned regions and provide them with
a level of aid commensurate with the scale of the problems they face;

7.
Believes that the statistical effect regions must maintain their status as areas within the scope of Arti-
cle 87(3)(a) of the Treaty as already requested in its above-mentioned resolution on the third report on
economic and social cohesion granting them the same treatment as applied to convergence objective regions
by the general provisions for Structural Funds and Cohesion Fund; calls, therefore, for the maintenance of
the relevant provisions in respect of the statistical effect regions until the end of the programming period, i.
e. until 2013, without a review of their situation in 2009;

Appreciates that the Commission intends to use the unemployment rate as a supportive indicator for
8.
eligible areas to be defined by Member States under Article 87(3)(c) of the Treaty, but stresses the need for
indicators to be introduced which will highlight the various differences in regional development, thereby
enabling the Member States to measure more accurately the areas' relative degree of prosperity and con-
sequently their eligibility for support;

9.
Notes the additional allocation of eligible areas for designation as having the status of areas within the
scope of Article 87(3)(c) of the Treaty according to the country ceilings determined by the Commission,
which also takes into account variations in unemployment between the regions; as regards the total popu-
lation ceiling, calls nonetheless on the Commission to adopt distribution criteria which take into consider-
ation the relative disadvantages of certain Member States so as not to impose stiff penalties on the ones
which still display significant and objective internal differences due in part to the existence of underdevel-
oped regions with the status of Article 87(3)(a) of the Treaty areas; calls, therefore, for adoption of the same
distribution criteria and the same correctives laid down in the current guidelines and for authorisation of
the requisite modest increase in the total 25-Member EU population ceiling which is eligible for regional aid;

10.
Considers that economic-development regions should be entitled to the maximum levels of aid inten-
sity laid down in Article 87(3)(c) of the Treaty, in order to prevent a sudden change in aid level from
hindering their consolidation of the progress they have so far made;

Reaffirms that any regional aid covered by the derogation in Article 87(3)(c) of the Treaty must be

11.
part of a coherent and integrated regional policy of the Member States;

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Asks the Commission to urge Member States to outline in a transparent manner both the economic
principles and the statistical criteria which they intend ultimately to use to identify the Article 87(3)(c) of the
Treaty regions; reminds Member States that, in the process of defining Article 87(3)(c) regions at national
level, local and regional governments should be consulted;

13.
Asks the Commission to ensure that the competent authorities of the regions are allowed to apply
the partnership principle to prioritise investment projects of particular interest to their regions, as stated in
the draft Regional Aid Guidelines;

14. Welcomes the Commission's intention to apply an additional safety net in order to ensure that no
Member State loses more than 50 % of the population coverage during the period 2000-2006, but recom-
mends that the Commission modify the safety net by lowering the 50 % threshold, in order to avoid a
significant reduction in the population coverage in the period 2007-2013;

15.
Calls, in order to avoid too severe a reduction in the population coverage, for a transitional system
for areas within the meaning of Article 87(3)(c) of the Treaty similar to the transitional mechanism set up
for regions eligible under Article 87(3)(a);

Calls on the Commission to introduce a transitional aid-reduction period for current Article 87(3)(c)

16.
regions which, under the new proposal, would become unassisted regions;

17.
Express its satisfaction with the Commission's proposal to allow Member States to use regional State
aid to address particular economic problems, including localised regional disparities below the NUTS III
level, evidenced by lower Gross Domestic Product (GDP), higher unemployment or other recognized econ-
omic indicators, by giving them the possibility of granting State aid also to large companies; welcomes in
this context the application of relevant bonuses for small and medium-sized enterprises (SMEs);

Emphasises, however, the usefulness of other indicators allowing for better evaluation of the devel-

18.
opment difficulties experienced by certain regions;

Emphasises in this connection the importance of ensuring a strong synergy between any future glo-
19.
balisation fund designed to address particular economic problems caused by restructuring, and the Regional
Aid Guidelines;

20.
Understands that adequate operating aid for regions suffering from structural handicaps is an appro-
priate way to supplement investment aid in those regions and welcomes the Commission's desire to allow
Member States flexibility in this area;

21.
Expects the Commission to consider authorising operating aid for areas which from 2007 onwards
will lose Article 87(3)(a) of the Treaty status and to allow appropriate additional amounts of operating aid to
regions suffering from natural, geographic or demographic disadvantages;

22. Welcomes the Commission's setting of an effective maximum aid differential for less assisted regions
sharing a land border with a better assisted region and recommends that such provision should also apply
to regions sharing a sea border without a lowering of aid ceilings in better assisted areas;

23.
Appreciates that the Commission permits Member States to grant substantial additional amounts of
regional State aid to SMEs; proposes that the increase be adjusted upwards through the setting of a single
20 % figure for both small and medium-sized businesses, so as not to discourage the growth of small enter-
prises;

24.
Believes that the Horizontal Aid Guidelines too must take due account of territorial differences, in
order not to jeopardise cohesion objectives — for which reason such aid should be kept in its current
proportion;

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25.
Urges, therefore, the Commission to raise the ceiling of State aid intensity further to include a
regional component for the benefit of poorer regions, in cases of State aid granted on the basis of the
new Horizontal Aid Guidelines; such an aid bonus for horizontal aid should be differentiated according to
the categorisation of regional aid intensity outlined in paragraphs 41 to 46 of the draft Regional Aid Guide-
lines;

26.
Supports the definition of initial investment suggested by the Commission and, in particular, the
differentiation of eligible expenses between SMEs and large companies as outlined in paragraphs 31 et seq.
of the draft Regional Aid Guidelines, but hopes for greater flexibility allowing for specific situations, where
this is justified; calls on the Commission, however, to clarify whether, on the basis of the draft Regional Aid
Guidelines, the provision of services will be eligible for aid, as well as the supply of products; furthermore
considers that, when defining initial investment, the current requirement that the investment should lead to
fundamental changes in terms of the rationalisation, diversification or modernisation of the product or
production process should continue to be used, since it seems less restrictive than the requirement to
bring a completely new product onto the market;

Proposes that, in the light of current practice, the Commission allow Member States that have not
27.
adopted the single currency to be able to apply the exchange rate ‘on the date when the application for aid
is received’ for projects forming part of adopted programmes, because the specific level of aid already needs
to be known at the time when the project is assessed, not only on the day when the decision is made;

28.
Calls on the Commission to specify more precisely what constitutes eligible expenditure in order to
allow categories thereof to be set more accurately and in order that decision-making on the eligibility of
expenditure may be left to the Member States;

29. Welcomes the Commission's acknowledgement that the form of regional aid can be variable and asks
the Commission to carry out a study assessing which type of State aid seems to be most beneficial for
regional development and to entail a lesser risk of distorting competition;

30. Welcomes the Commission's intention to require that eligible intangible assets must remain within
the eligible region, which will be ensured by a number of conditions laid out in paragraph 53 of the draft
Regional Aid Guidelines; requests clarification, however, as to whether the transfer of an undertaking from
one eligible region to another also represents a breach of the condition allowing aid intended to finance a
particular investment or whether it is only the transfer of an investment to a non-eligible area that would
give rise to the sanctions laid down;

31. Welcomes the fact that temporary and decreasing operating aid will continue to be allowed for
Article 87(3)(a) of the Treaty regions, provided that it addresses clearly defined problems in regional devel-
opment and is proportionate; urges the Commission, however, to provide a more precise definition of the
eligibility criteria for operational aid;

32. Welcomes the fact that operating aid that is neither degressive nor subject to a time limit will con-
tinue to be authorised in regions suffering from permanent handicaps;

33.
Believes that operating aid covering the additional costs of transport should be allowed in the outer-
most regions and low population density regions, if it complies with certain objective criteria as defined in
paragraph 79 of the draft Regional Aid Guidelines and provided that the public procurement rules guarantee
fair price-setting by the companies receiving State aid; also believes that the grant of aid should be permitted
for boosting regional development in EU regions with permanent geographic handicaps, such as islands and
mountainous areas, since it would help to bring about better integration of the EU;

34.
Suggests that operating aid also be selectively allowed under certain conditions, in view of identified
additional costs and an opportunity to have equal access to the market, for regions which suffer from severe
and permanent natural or demographic handicaps, such as the regions with very low population density,
regions undergoing depopulation and island, cross-border and mountain regions; nevertheless urges the
Commission to define precisely the eligibility criteria for operational aid in the above-mentioned regions;

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Calls for recognition of the fact that direct aid for transport can contribute to greater economic
integration of island regions within the EU and allow them to take advantage of their geographical position
in the maritime areas surrounding the EU;

36. Welcomes the Commission's introduction of a maximum percentage of the overall amount of State
aid granted for certain intangible investment projects for large companies, in order to limit the maximum
amount of their funding in relation to total investment;

Emphasises that the general requirement to maintain investment supported by State aid in a particu-

37.
lar region should correspond to the requirements regarding Structural Funds;

Recognises that the obligation to maintain investment within the regions has been fixed at a general
38.
level for a minimum of five years after its completion; calls for this rule to be applied with some flexibility
so as not to stifle innovation through the replacement of plant or equipment which has become out-dated
within this five year-period due to rapid technological change;

Urges the Commission to define Regional Aid Guidelines on the basis of the principle of propor-

39.
tionality for the recovery of aid, in the event of such obligations not being respected;

Considers that EU aid for company relocations does not provide any European added value and must

40.
therefore be avoided;

Emphasises that all economic sectors should be treated equally and that coherence between all rel-

41.
evant legal instruments must be duly maintained;

42. Welcomes in principle the Commission's intention to integrate the multi-sectoral framework into the
new Regional Aid Guidelines without reducing the intensities indicated therein;

43. Warns that the Commission's proposal to base the maximum aid percentage on gross grant levels
(unlike in the previous period in which the different taxation systems were taken into account via the net
grant equivalent (NGE) formula) could increase the differences between aid that may be received by com-
panies in regions of different Member States, not taking account of cohesion criteria;

44.
Notes with concern that the reduction in ceilings for the purpose of establishing the maximum aid
intensity (per capita GDP) combined with the change in the calculation method (gross instead of net sub-
sidy) results in practice in a very severe cutback in aid with no regard for the effectiveness thereof as an
instrument of convergence and cohesion; calls, therefore, on the Commission to provide — in the interests
of aid-management transparency — an objective justification of the need for such a change;

Urges the Commission to consider a way of using the NGE formula to calculate the actual impact of

45.
State aid on regional development;

46. Welcomes the new form of aid for small businesses in assisted regions, as well as the specific
measures concerning low density population regions and small islands in the context of the compatibility
criteria for this aid;

47. Welcomes the Commission's intention to extend block exemptions from prior notification for trans-
parent forms of regional
investment aid and recommends that the ceilings for block exemptions take
account of inflation;

48.
Emphasises that rules on exemption should explicitly include the possibility for Member States to
notify aid projects and for the Commission to evaluate their compatibility using more flexible criteria, so
that account may be taken of any specific regional or sectoral characteristics, as well as innovative
approaches;

Expects the Commission to make the rules for block exemptions simple and transparent, but also to

49.
introduce an appropriate control mechanism to prevent abuse of block exemptions;

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Calls on the Commission to examine whether

50.
threshold, currently set at
EUR 100 000, could be raised, which would provide relief and cut down on bureaucracy for SMEs and
new businesses;

the de minimis

Points out that national State aid is an important financial instrument for economic, social and terri-
51.
torial cohesion, and must therefore be incorporated into the national reference framework and be approved
as part of the multiannual national programme;

Appreciates the Commission's intention to improve the transparency of regional State aid in an
52.
enlarged EU and supports easy access for all interested parties to the full text of all applicable regional aid
schemes in the EU;

53.
Calls for the fundamental rules on State aid associated with the Structural Funds to be incorporated
into the Council regulation laying down general provisions on the European Regional Development Fund,
the European Social Fund and the Cohesion Fund;

Thanks the Commission for having taken account of Parliament 's considerations during the consul-

54.
tation period leading to the drafting of the draft Regional Aid Guidelines;

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

55.
of the Regions.

P6_TA(2005)0528

EU Development Strategy

European Parliament resolution on a Joint Statement by the Council and the representatives of the
Governments of the Member States meeting within the Council, the European Parliament and the
Commission on European Union Development Policy: ‘The European Consensus on Development’

The European Parliament,

— having regard to the consensus reached by the General Affairs and External Relations Council of 21 and
22 November 2005, in agreement with the Commission, on a ‘Joint Statement by the Council and the
representatives of the Governments of the Member States meeting within the Council, the European
Parliament and the Commission on European Union Development Policy: The European Consensus on
Development’,

— having regard to the European Community's Development Policy Statement adopted by the Council and

the Commission on 10 November 2000,

— having regard to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000 and the

amending agreement, signed in Luxembourg on 25 June 2005,

— having regard to the United Nations Millennium Declaration of 8 September 2000, which sets out the
Millennium Development Goals (MDGs) as criteria established jointly by the international community
for the elimination of poverty,

— having regard to its resolutions of 17 November 2005 on the proposal for a Joint Declaration by the
Council, the European Parliament and the Commission on the European Union Development Policy —
‘The European Consensus’ (1); of 17 November 2005 on a development strategy for Africa (2); and of
12 April 2005 on the role of the European Union in the achievement of the Millennium Development
Goals (MDGs) (3),

— having regard to Rule 103(2) of its Rules of Procedure,

(1) Texts Adopted, P6_TA(2005)0446.
(2) Texts Adopted, P6_TA(2005)0445.
(3) Texts Adopted, P6_TA(2005)0115.