European Parliament resolution on sectoral aspects of the State Aid Action Plan: aid for innovation (2006/2044(INI))
Date: 2006-04-27
Institutions: Committee on Economic and Monetary Affairs, European Parliament
Subjects: European Employment Strategy, State aid, economic growth, governance, innovation, new technology, research and development, sustainable development

6.12.2006

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Official Journal of the European Union

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Thursday 27 April 2006

Points out that it would be beneficial if the Level 3 committees adhered more closely to the prin-

50.
ciples of simplicity, clarity and practicability and developed more common methods among themselves;

Notes that the Lamfalussy process did not exist when Directive 85/611/EEC was adopted, and that,
51.
because of the detailed legislation currently in force, Directive 85/611/EEC cannot be transformed into a
Lamfalussy-style directive without being completely revised and restructured; does not consider this to be
appropriate at present but believes that it would be worth considering if measures taken in the near future
are not effective;

52. Welcomes the fact that some Lamfalussy-style mechanisms are already being applied, for instance the
consultation and cooperation of all stakeholders and the convergence of best practices, and recommends, as
a practical solution, that legislative amendments to Directive 85/611/EEC, as amended by UCITS III, should
be compliant with Lamfalussy;

53.
Encourages the Council and the Commission to conclude, in a satisfactory manner for all parties, the
current negotiations on comitology so as to give the Parliament full call-back rights in all comitology
procedures related to codecision procedures; considers that the conclusion of such an agreement is a pre-
condition for the continuance of the Lamfalussy process;. recalls that sunset clauses as regards key financial
services directives such as MiFID and the forthcoming recast directives on credit institutions and capital
adequacy of investment firms and credit institutions will become effective on 1 April 2008 if no full call-
back right is given to the Parliament before that date;

54.

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

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P6_TA(2006)0182

State aid for innovation

European Parliament resolution on sectoral aspects of the State Aid Action Plan: aid for innovation
(2006/2044(INI))

The European Parliament,

— having regard to the Commission Communication of 21 September 2005 entitled, ‘Consultation Docu-

ment on State Aid for Innovation’ (COM(2005)0436),

— having regard to the Commission's State aid action plan, Less and better-targeted State aid: a roadmap

for State aid reform 2005-2009 of 7 June 2005 (COM(2005)0107),

— having regard to its resolution of 14 February 2006 on State aid reform 2005-2009 (1),

— having regard to the draft Commission Communication of 21 December 2005 entitled, ‘Guidelines on

National Regional Aid for 2007-2013’ (2),

— having regard to the Community Framework for State aid for Research and Development (3),

(1) Texts Adopted, P6_TA(2006)0054.
(2) OJ C 54, 4.3.2006, p. 13.
(3) OJ C 45, 17.2.96, p. 5 as last amended by the Commission communication concerning the prolongation of the

Community Framework for State Aid for Research and Development, OJ C 310, 8.12.2005, p. 10.

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— having regard to the 2005 EU Industrial R&D Investment Scoreboard (1),

— having regard to the Commission Communication on State aid and risk capital (2),

— having regard to the Commission Communication of 12 October 2005 entitled,

‘More Research and

Innovation — Investing for Growth and Employment: A Common Approach’ (COM(2005)0488),

— having regard to Commission Regulation (EC) No 2204/2002 of 5 December 2002 on the application

of Articles 87 and 88 of the EC Treaty to State aid for employment (3),

— having regard to the objectives of the Lisbon Strategy,

— having regard to Articles 2, 5, 81, 82, 87, 88 and 163 of the EC Treaty,

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

— having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of

the Committee on Industry, Research and Energy (A6-0073/2006),

A. whereas the EU aims to reduce the general level of State aid and redeploy it in favour of horizontal

objectives,

B. whereas the level of innovation in the EU is sub-optimal and lags behind its trading partners as regards
both R&D investment and productivity growth; whereas the trend of the ‘brain drain’ and the invest-
ment flow from the EU to other parts of the world should be reversed,

C. whereas in the case of innovation and R&D, horizontal aid exists in a field which is vital to the EU's
competitiveness and one in which our competitors provide substantially more State aid than is per-
mitted in the EU,

D. whereas innovation processes need scope for development and room for experimentation,

E. whereas the innovation performance gap between the EU and its global competitors is due to factors
such as low public and private investment in R&D, an insufficient number of skilled workers, and
disincentives inherent in EU rules on patents,

F. whereas public support ranks very low among the factors influencing investment decisions in R&D;
whereas the significance of direct public support varies considerably from one Member State to another
and is one of the factors taken into account by enterprises for their investment decisions in R&D,
which should not be isolated from an R&D-favourable business environment and should be subject to
EC competition rules,

G. whereas innovation policy in the fields of technology and R&D accounts for a manifestly small propor-
tion of Member States' national budgets and GDP, which is in turn a factor that contributes to the delay
in implementing the Lisbon Strategy objectives and achieving the goals of boosting employment and
cohesion,

H. whereas State aid should remain the exception, an instrument to correct imbalances that cannot be
addressed by regular policy instruments, and whereas the low level of investment in R&D requires a
more comprehensive policy approach,

(1) Published by the Commission on 9.12.2005.
(2) OJ C 235, 21.8.2001, p. 3.
(3) OJ L 337, 13.12.2002, p. 3.

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I. whereas,

in line with the Presidency conclusions of the Luxembourg European Council of 22 and
23 March 2005, State aid should act as a lever for developing research, education and innovation,
and should permit a genuine dialogue to take place between interested parties in the public and private
sectors,

J. whereas it is very important to define clearly what is meant by R&D in order to prevent the abuse of

the State aid rules,

I. GENERAL REMARKS

1.
Recalls that State aid should remain the exception: an instrument to correct imbalances that cannot be
addressed by regular policy instruments; underlines the importance of guaranteeing coherence between such
measures and those aimed at reducing unnecessary regulation and introducing further deregulation
measures, investing in education and training, providing adequate infrastructure, ensuring that the patent
regime is conducive to innovation, ensuring fair competition, facilitating access to risk capital, encouraging
an entrepreneurial spirit, removing obstacles to the freedom of movement for workers and researchers
within the EU, and adopting a common policy for legal immigration, which enables the EU to attract the
best and the brightest;

Stresses that further clarification is needed of how the State aid rules will apply to international cross-

2.
border economic activities of companies, research establishments, and academic institutions;

Considers that State aid for innovation should be complementary to the corresponding uniform Com-
3.
munity policies and should import clear, measurable added value for the immediate beneficiaries as well as a
secondary impact on the broader local, regional and national economy;

Stresses the need to draw conclusions from past cases in which State aid failed to achieve its aims, as
4.
well as from those cases in which it proved to be an effective instrument for attaining the desired objectives;

5. Welcomes the Commission's open consultation and encourages the continuation of dialogue in order
to clarify all points before finalisation of the new framework, which should be implemented as soon as
possible; considers, that the objective of innovation is multidimensional and complex and that very restric-
tive definitions and arrangements should be avoided; recommends an interim deadline for revising the
framework in the event of the need for improvement; notes, moreover, that the revision of the Oslo Manual,
which lays down the methodological framework for measuring innovation, should be taken into account;

6.
Asks the Commission to provide more detailed information about the possible distortional effects of
State aid and to take into account State aid granted by the EU's international competitors, both at sectoral
and horizontal level and its possible distortional and incentive effects on a global scale; points out that the
effective governance of innovation policy, international benchmarking, trans-national policy learning, moni-
toring, and conducting impact assessments are the most appropriate responses to the challenges of global
competition;

II. PRINCIPLES GOVERNING CONTROL OF STATE AID FOR INNOVATION

7. Welcomes the approach of incorporating new rules, which support concrete and well-identified inno-
vation-related activities, in the existing acquis communautaire, provided that this is done in a coherent and
transparent way;

8. Welcomes the economic approach to State aid for innovation and would welcome the introduction of
ex ante rules, where appropriate, if these are transparent, non-discriminatory, practicable, and provide for
legal certainty; insists that the Commission, in close cooperation with Parliament, periodically review and
evaluate the appropriateness of such rules; it should be emphasised that criteria for granting subsidies for
innovation should be conditional on several factors, such as the characteristics of the economic sector, the
market structure, and the market power of the company;

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9.
Insists that the promotion of cross-border cooperation and public-private partnerships in research, the
dissemination of the results of the research, and major research programmes, should be fundamental prior-
ities of State aid for R&D;

10.
Insists that State aid for innovation should be temporary, granted according to transparent and
rational criteria, proportionate, strictly and effectively controlled, and subject to periodic impact assessments
through ex post analyses conducted by the Member States and the Commission; insists also that State aid
should take into account ‘remoteness from the market’, in other words, the non-commercial phase of the
innovation process; stresses that the increasing importance of innovation must not be a pretext for granting
State aid to companies;

Recalls that innovation is an integral part of all business activities and stresses that rules and criteria
11.
must clarify that innovative processes per se do not merit State aid; stresses that State aid should be granted
only for innovation that cannot be financed by normal commercial means and that contributes to the
overall goals of business life and society;

Considers the term ‘market inefficiency’ more appropriate than ‘market failure’, and asks for a more
12.
detailed and operational definition; suggests that the identification of obstacles limiting innovation, as well
as the quantification of its effective value, should be subject to further scrutiny;

Stresses the need for reliable statistical data both on market and on State aid inefficiencies in the field

13.
of innovation, as well as on the effectiveness of State aid for innovation;

14.
Recognises that SMEs and start-ups are most affected by market inefficiencies; notes, at the same
time, that the effect of State aid is less distorting when granted in favour of activities at a distance from
the market or to SMEs and start-ups;

Stresses the need to create an innovation-friendly environment for SMEs in order to stimulate their

15.
untapped innovation potential;

16.
Stresses that the importance in this connection of SMEs, which, by their nature, have only limited
funds at their disposal, makes it necessary for them to be allocated a higher proportion of the aid available;
to make this possible, a greater role needs to be played by innovation intermediaries once their nature and
role has been clarified further and the necessary infrastructure which they should provide has been extended
to include IT infrastructure, and networking and link-up to international databases;

Points out that SMEs are often not willing to take the high risks associated with technological inno-
17.
vation, even though this could not only bring individual benefits, but could also potentially benefit society
as a whole; stresses the need urgently to target State aid at supportive actions that motivate SMEs and
diminish the risks linked with technological innovation processes, as well as the need to improve the overall
conditions of the business environment;

18.
Regards large companies as an essential component of the innovation system; considers, however,
that State aid to large companies is appropriate for encouraging cooperation within innovation clusters and
poles of excellence (large companies, SMEs and knowledge centres), provided that they meet the criteria of
the ex ante rules;

Is aware that State aid may be necessary in order to set in motion innovative projects or scientific or

19.
technological research projects which are distant from the marketplace;

20.
Notes that the incentive effect of different State aid instruments is difficult to demonstrate but may
be facilitated by a standardised set of questions; considers that as little use as possible should be made of
direct grants;

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21.
Questions the distinction between technological and non-technological innovation; notes the import-
ance of non-technological innovation, particularly in the acquisition of competitive advantages by SMEs;
favours,
instead, a definition of innovation distinguishing between the regular day-to-day operations of
companies and their activities relating to innovation; proposes that projects eligible for State aid should be
those that provide additional or new client benefits, entail risk, are intentional, have transferable benefits,
and create positive externalities;

22.
Considers that regional aid and State aid for innovation are complementary and should focus on less-
developed regions in order to promote economic and social cohesion; considers that otherwise such aid will
only promote the growth of more developed regions and countries; considers that regional aid schemes,
whenever additional to State aid for innovation, must be compatible with the internal market and the
competition rules; considers, moreover, that particular importance should be attached to the definition of
and eligibility for State aid for innovation in relation to regional SMEs for which it is vitally important to
have access to innovation;

Calls on the Commission to make the regional aid schemes more forward-looking, allowing,

23.
particular, support for intangible investments;

in

24.
Calls on the Commission to ensure that EU structural funding will not be regarded as unlawful State
aid when combined with co-funding from other sources; further asks that the relevant procedures be modi-
fied so that dual notification to the Commission of such funding is avoided;

III. SUPPORTING RISK-TAKING AND EXPERIMENTATION

25.
Agrees that State aid should be allocated on the basis of criteria favouring innovative start-ups and
SMEs, rather than on the basis of eligible costs; notes that decisions on the grant of State aid should be
taken in an efficient manner and within clearly defined time lines;

Proposes that the existence period requirement for companies with a longer R&D cycle be extended

26.
to eight years;

27.
Supports the proposal that financial support is given by means of risk capital not only for the seed
and start-up phase, but also for the post-seed phase; stresses, however, that this solution is not optimal and
that any aid should be of a short-term character and complementary to primarily private investments;

28.

Emphasises that the limits on R&D costs should be carefully monitored;

Notes that in regions and countries in which the innovation environment is particularly disadvan-
institutions of higher risk may work as a major

29.
taged, a perception by private investors and financial
innovation-inhibiting factor;

30.
Realises that innovative SMEs' access to risk capital is currently considerably limited, primarily in the
first phases of their development; supports, therefore, the idea of using State aid to attract private capital
investment to regional risk-capital funds working as public-private partnerships with higher flexibility of
investment tranches for public resources;

IV. A SUPPORTIVE BUSINESS ENVIRONMENT FOR INNOVATION

31.
Calls for the further clarification of the legal status of intermediaries in regard to the scope of the
services that they provide; supports the voucher system but proposes introducing an element of co-financ-
ing, in order to attract more private investment; believes, however, that the reimbursement of 100 % might
lead to the distortion of competition;

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32.
Recommends that universities and their research centres should take part in or cooperate closely
with regional public-private partnerships as ‘innovation intermediaries’; considers that this would create a
large synergy effect with better interconnection between the research and innovation activities of universities
and the needs of individual innovative SMEs and innovative business clusters;

Asks for further clarification on how the State aid rules apply to universities and research establish-

33.
ments when they are engaged in economic activities;

34.
Questions the appropriateness of allowing State aid to SMEs for hiring highly qualified staff, since
SMEs may have access to specialist knowledge and skills through the services of intermediaries and experts;

Is convinced of the need to step up links between businesses and universities, inter alia by increasing
35.
the mobility of highly qualified personnel of all specialities between universities and businesses, particularly
SMEs; considers that aid, particularly via support schemes, should encourage such links; welcomes the
Commission's proposal to divide intellectual property rights between the partners (industry and public
research organisations) in research and innovation programmes in accordance with each partner's level of
participation, considering that this will give a great boost to the creation of poles of excellence; calls on the
Commission, therefore, to submit specific proposals to clarify the legal status of intellectual property in
these circumstances;

Believes that clusters develop organically and should therefore be eligible for State aid only on a
36.
temporary basis, during the start-up phase, in order to meet administrative problems and obstacles linked
with cooperation;

Believes that State aid for infrastructure should fulfil the requirement of technical neutrality and open

37.
access, address identified market failures, and enhance innovative potential;

38.

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

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P6_TA(2006)0183

Road safety: bringing eCall to citizens

European Parliament resolution on Road safety: bringing eCall to citizens (2005/2211(INI))

The European Parliament,

— having regard to the Commission White Paper ‘European transport policy for 2010: time to decide’

(COM(2001)0370), and its resolution of 12 February 2003 thereon (1),

— having regard to the Commission Communication ‘Information and Communications Technologies for

Safe and Intelligent Vehicles’ (COM(2003)0542),

— having regard to the Commission Communication ‘European Road Safety Action Programme —
Halving the number of road accident victims in the European Union by 2010: A shared responsibility’
(COM(2003)0311) and its publication ‘Saving 20 000 lives on our roads’ of October 2004,

(1) OJ C 43 E, 19.2.2004, p. 250.