Report State Aid Scoreboard - autumn 2006 update -
Date: 2006-12-11
Institutions: European Commission
Subjects: EU Member State, State aid, activity report, control of State aid

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.12.2006 
COM(2006)761 final 

REPORT 

State Aid Scoreboard 
- autumn 2006 update - 

(presented by the Commission) 

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TABLE OF CONTENTS 

Executive Summary ................................................................................................................... 3 

Introduction ................................................................................................................................ 6 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

1.5. 

1.6. 

1.7. 

1.8. 

1.9. 

Part One: Progress towards the European Strategy for Growth and Jobs (Lisbon 
Agenda) ........................................................................................................................ 7 

State aid in absolute and relative terms........................................................................ 7 

Sectoral distribution of aid ......................................................................................... 10 

State aid to the transport sector .................................................................................. 13 

State aid to the agriculture and fisheries sectors ........................................................ 15 

State aid to the coal and steel sectors ......................................................................... 16 

State aid to the shipbuilding sector ............................................................................ 17 

State aid for horizontal objectives.............................................................................. 17 

Trend in State aid for horizontal objectives and sectoral objectives.......................... 19 

State aid supporting regional development and cohesion .......................................... 22 

1.10.  Aid awarded under the block exemption regulations................................................. 24 

1.11. 

State aid instruments .................................................................................................. 26 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

2.7. 

3. 

4. 

5. 

6. 

Part Two: Special focus chapter on rescue and restructuring aid .............................. 27 

Principles for Rescue and Restructuring aid in the Guidelines.................................. 27 

Changes from 1999 to the 2004 guidelines................................................................ 28 

Commission decisions on rescue and restructuring aid 2000-2005 ........................... 29 

Expenditure on rescue and restructuring aid.............................................................. 31 

Sectoral distribution ................................................................................................... 33 

Aid instruments .......................................................................................................... 33 

SMEs in difficulty ...................................................................................................... 33 

Part Three: Recovery of Unlawful Aid ...................................................................... 34 

Part Four: Legislative and Policy Developments....................................................... 38 

Online State aid scoreboard, register and other reports on state aid .......................... 40 

Methodological Notes ................................................................................................ 41 

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EXECUTIVE SUMMARY 

This autumn 2006 update of the State Aid Scoreboard focuses on the State aid situation in the 
twenty-five Member States for the year 2005 and the underlying trends. The main aim is to 
assess  Member  States  progress  towards  meeting  the  Lisbon  objectives  and  response  to 
successive  European  Councils  call  for  “less  and  better  targeted  aid”.  This  update  of  the 
Scoreboard  also  includes  a  feature  chapter  on  rescue  and  restructuring  aid  as  well  as  its 
customary summary of ongoing efforts to recover unlawful aid and an overview of ongoing 
work to modernise State aid control through legislative and policy means. 

Part  One:  Progress  towards  the  European  Strategy  for  Growth  and  Jobs  (Lisbon 
Agenda) 

Moderate  response  by  Member  States  to  Council’s  call  for  less  State  aid:  slight 
downward trend in the overall volume of State aid 

The overall level of State aid less agriculture, fisheries and transport stood at €45 billion for 
the EU in 2005. There is a slight downward trend from an annual average of €52 billion in the 
period 2001-2003 to an annual average of €47 billion in the period 2003-2005. However, this 
decrease  can  mainly  be  explained  by  the  high  overall  aid  levels  in  the  period  2001-2002, 
caused by the restructuring aid to Bankgesellschaft Berlin (BGB). While State aid to the coal 
sector  shows  a  clear  downward  trend,  aid  to  the  environment  has  increased  significantly  in 
recent  years.  Aid  for  all  other  objectives  has  remained  relatively  stable.  The  level  of 
expenditure  has  fluctuated  in  several  Member  States.  These  fluctuations  do  not  appear  to 
reflect changes in national policies but are rather influenced by a relatively small number of 
large cases. Total State aid less agriculture, fisheries and transport relative to GDP decreased 
from 0.50% of GDP to 0.45% of GDP over the two periods under review. 

In 2005, Germany accounted for €15 billion of the total of €45 billion. More significantly its 
share  of  aid  expressed  as  percentage  of  GDP  (0.68%)  is  considerably  higher  than  the  EU 
average (0.42%). Other Member States with a high share include Sweden (0.91%) where the 
aid  is  almost  entirely  awarded  for  environmental  and  energy  saving  objectives,  as  well  as 
Cyprus  (1.0%),  Hungary  (1.08%)  and  Malta  (2.61%)  though  most  of  the  aid  measures  in 
question  are  either  being  phased  out  under  transitional  arrangements  or  limited  in  time. 
Among those Member States with a relatively low share of aid to GDP (less than 0.25%) are 
the three Baltic countries together with Belgium, Greece, Netherlands, Austria and the UK. 

More  than  half  of  Member  States  have  reacted  positively  to  Council’s  call  to  redirect 
State aid toward horizontal objectives and more than 90% of their State aid is granted 
for horizontal objectives  

There  is  a  clear  move  towards  “better  targeted  aid”  with  more  than  half  of  Member  States 
now awarding more than 90% of their aid to horizontal objectives. In welcoming this trend, 
one  should  be  aware  that  much  of  the  increase  in  horizontal  aid  can  be  attributed  to  an 
increase in tax exemptions for the environment and energy saving. Aid for the environment 
and energy saving now represents 28% of total aid less agriculture, fisheries and transport. As 
regards  the  other  Lisbon-related  areas  such  as  aid  for  R&D  (12%),  regional  economic 
development (19%), SMEs (10%), employment (8%) and training (2%), the picture in terms 
of expenditure is relatively stable.  

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State aid for R&D is stable  

The Barcelona European Council of March 2002 set the objective for expenditure on R&D to 
3% of GDP by 2010. Two thirds of this expenditure should be funded by the private sector. 

It is important to bear in mind that State aid to R&D constitutes only a small part of public 
R&D funding. State aid to R&D stood at €5.6 billion in 2005. After a significant increase in 
2001,  the  level  of  R&D  aid  has  remained  rather  stable.  State  aid  to  R&D  represents  a 
relatively small share in public funding (EU-wide, 0.05% of GDP in 2005) although there are 
significant  differences  between  Member  States.  In  six  Member  States  the  R&D  aid 
expenditure relative to the GDP in 2005 was above EU average: Czech Republic (0.10% of 
GDP),  Finland  (0.09%),  Slovenia  (0.09%),  France  (0.08%),  Germany  (0.07%)  and  Austria 
(0.06%).  

In  2005,  Member  States  granted  around  2.9  billion  of  State  aid  under  block  exempted 
measures 

By  the  end  of  June  2006,  almost  1500  information  forms  on  block  exempted  measures  had 
been submitted since the introduction of the first block exemption regulations for SMEs and 
training in 2001. In 2005 alone, the Commission received more than 400 forms on exempted 
measures. While the number of forms submitted by the Member State in the first six months 
of 2006 remained stable, the use of employment and agriculture block exemption regulations 
has increased. 

As regards expenditure, an estimated €2.9 billion was awarded in 2005 under the three block 
exemption regulations for SMEs, training and employment1. Aid to SMEs accounted for €1.5 
billion,  €1  billion  went  for  training  aid  and  €0.4  billion  for  employment  aid.  In  2005,  Italy 
made  up  for  31%  of  total  expenditure  in  the  EU  followed  by  the  United  Kingdom  (20%), 
Poland (14%) and Germany (13%).  

Part Two: Focus on rescue and restructuring aid 

Member  States  granted  majority  of  rescue  and  restructuring  aid  on  an  individual  (ad 
hoc) basis 

The  vast  majority  (almost  93%)  of  aid  for  rescue  and  restructuring  is  awarded  on  an 
individual  (ad  hoc)  basis  to  ailing  firms  and  it  is  this  aid  that  is  most  prone  to  distort 
competition. In addition to ad hoc awards of aid, several Member States have made use of the 
possibility to award aid to SMEs in difficulty through aid schemes.  

Expenditure on ad hoc rescue and restructuring aid for EU-15 amounted to 15.5 billion 
for  the  period  2000-2005  but  this  amount  is  underestimated  due  to  quantification 
problems 

For the period 2000-2005, rescue and restructuring aid amounted to €24 billion. As data for 
EU-10 Member States prior to accession in May 2004 are not fully comparable with EU-15 
data, this section focuses on aid granted by EU-15. This represents around €15.5 billion or, on 
average  around  7%  of  total  aid  less  agriculture,  fisheries  and  coal.  This  figure,  however, 
presents only part of the picture for two main reasons: 

1 

Data are not yet available for agriculture and fisheries. 

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Firstly, there is the important but difficult issue of how to quantify the advantage to an ailing 
firm which has received aid in the form of a loan or guarantee. Such forms of aid account for 
the  majority  of  rescue  and  restructuring  measures.  At  present,  various  methods  are  used  by 
Member  States  to  calculate  the  ‘aid  element’,  some  of  which  tend  to  underestimate  the 
advantage to the company in difficulty. 

Second, there are a number of cases that are difficult or impossible to quantify, e.g., part of 
the aid to France Telecom2, and are therefore not included in the Scoreboard figures.  

Majority  of  the  rescue  and  restructuring  aid  is  granted  for  limited  number  of 
companies… 

The overall volume of rescue and restructuring aid tends to be driven by a limited number of 
large cases such as the Bankgesellschaft Berlin AG in Germany, Alstom and Bull in France, 
British Energy in the United Kingdom, Alitalia in Italy and the Spanish shipyards case.  

…and by limited number of Member States 

Five Member States account for more than 95% of the rescue and restructuring aid. Germany 
made  up  56%  of  total  rescue  and  restructuring  aid,  followed  by  France  (21%),  Spain  (8%), 
United  Kingdom  (7%)  and  Italy  (5%).  A  second  group  of  five  Member  States  (Belgium, 
Greece,  Netherlands,  Austria  and  Portugal)  awarded  relatively  small  amounts  of  aid  while 
five Member States (Denmark, Ireland, Luxembourg, Finland and Sweden) did not award any 
ad hoc rescue and restructuring aid to ailing firms between 2000 and 2005. In relative terms 
(per  mille  of  GDP),  the  6  biggest  grantors  of  rescue  and  restructuring  aid  were:  Germany 
(0.65‰),  France  (0.32‰),  Spain  (0.26‰),  Belgium  (0.20‰),  Greece  (0.11‰)  and  United 
Kingdom (0.11‰). 

More than half of the Commission’s decisions on rescue and restructuring aid concerned 
unlawful aid 

More than half of the ad hoc rescue and restructuring decisions taken over the period 2000-
20053 concerned unlawful aid (new aid put into effect before approval by the Commission). 
This breach of the Treaty concerns in particular the larger cases and the larger Member States 
and is more prevalent in restructuring cases than rescue cases.  

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C13a/2003 (ex N779/2002) Commission Decision of 2 August 2004 on the State Aid implemented by 
France for France Télécom (notified under document number C(2004) 3060) 
http://ec.europa.eu/comm/competition/state_aid/register/ii/by_case_nr_c2003_000.html#13a 
The proportion of unlawful measures was highest in the period 2000-2002 due to the influence of the 
East German cases but even in the period 2003-2005 it remains above 50%. 

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INTRODUCTION 

This autumn 2006 update of the State Aid Scoreboard focuses on the state aid situation in the 
twenty-five Member States for the year 2005 and the underlying trends. The main aim is to 
assess  Member  States  progress  towards  meeting  the  Lisbon  objectives  and  response  to 
successive European Councils call for “less and better targeted aid”. The European Council of 
March 2005 invited Member States to “continue working towards a reduction in the general 
level  of  State  aid,  while  making  allowance  for  any  market  failures.  This  movement  must  be 
accompanied by a redeployment of aid in favour of support for certain horizontal objectives 
such  as  research  and  innovation  and  the  optimisation  of  human  capital.  The  reform  of 
regional aid should also foster a high level of investment and ensure a reduction in disparities 
in accordance with the Lisbon objectives.” These goals were underlined by the Commission 
Recommendation on the Broad Economic Policy Guidelines for 2005-20084. 

The Scoreboard is divided into four main parts. Part One looks at the extent to which Member 
States  have  responded  to  the  Lisbon  Strategy  by  first  providing  an  overview  of  the  amount 
and  type  of  State  aid  awarded  by  the  Member  States  in  2005  and  then  examining  the 
underlying trends. Part Two provides a special focus on State aid for rescue and restructuring 
aid for companies in difficulty, which is one of the most (potentially) distortive form of aid.  

Parts  Three  and  Four  contain  an  overview  of  ongoing  efforts  to  recover  unlawful  aid  and 
summarise ongoing work to modernise State aid control through legislative and policy means.  

In addition to this paper edition, a permanent online Scoreboard consisting of a series of key 
indicators  and  a  range  of  statistical  information  for  the  EU  Member  States  is  available  on  the 
site: 
homepage 
http://europa.eu.int/comm/competition/state_aid/scoreboard/  

Competition 

Directorate 

General’s 

Internet 

the 

of 

The spring 2007 Scoreboard will include a special focus on unlawful aid. 

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COM(2005) 141 final, 12.4.2005 

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1. 

PART  ONE:  PROGRESS  TOWARDS  THE  EUROPEAN  STRATEGY  FOR  GROWTH  AND 
JOBS (LISBON AGENDA) 

This chapter provides an overview of State aid granted in the EU Member States in 2005 and 
examines the underlying trends. The main purpose is to measure the extent to which Member 
States have met the call for less and better targeted aid. After the considerable fall in the level 
of aid at the end of the nineties, the underlying trend over the last six years has been stable 
rather  than  downward,  with  however  moderately  lower  overall  aid  levels  in  the  past  two  to 
three  years.  The  vast  majority  of  Member  States  do  however  appear  to  be  shifting  the 
emphasis  from  supporting  individual  companies  or  sectors  towards  tackling  horizontal 
objectives. 

1.1. 

State aid in absolute and relative terms 

Total  State  aid5  granted  by  the  Member  States  was  estimated  at  €64  billion  in  2005.  In 
absolute terms, Germany granted the most aid (€20 billion) followed by France (€9.7 billion), 
Italy (€6.4 billion) and the United Kingdom (€4.5 billion).  

In sectoral terms, around €41 billion of aid was earmarked for the manufacturing and service 
sectors, €17 billion for agriculture and fisheries, €4.1 billion for coal and €1.5 billion for the 
transport (excluding railways) sector. 

5 

The  total  covers  aid  to  manufacturing,  services,  coal,  agriculture,  fisheries  and  part  of  the  transport 
sector  but  excludes  aid  to  the  railway  sector,  aid  for  compensation  for  services  of  general  economic 
interest. 

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Table 1: State aid awarded in the EU Member States, 2005 

Total state aid less 
railways in billion €

Total state aid less 
agriculture, fisheries 
and transport in billion 
€

Total aid less railways 
as % of GDP

Total aid less 
agriculture, fisheries 
and transport as % of 
GDP

EU-25
EU-15
EU-10
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

63,8
58,7
5,1
1,2
0,5
1,3
20,3
0,0
0,4
3,8
9,7
1,0
6,4
0,2
0,1
0,1
0,0
1,6
0,1
2,0
1,4
1,9
1,0
0,2
0,3
2,7
3,1
4,5

45,1
42,2
2,9
0,7
0,4
1,1
15,2
0,0
0,3
3,3
6,5
0,4
5,3
0,1
0,0
0,0
0,0
0,9
0,1
1,2
0,6
0,9
1,0
0,1
0,2
0,6
2,6
3,5

0,59
0,57
0,93
0,4
0,54
0,64
0,9
0,46
0,2
0,41
0,56
0,63
0,45
1,43
0,84
0,58
0,15
1,83
3,16
0,4
0,56
0,82
0,67
0,64
0,66
1,75
1,08
0,26

0,42
0,41
0,52
0,23
0,39
0,52
0,68
0,13
0,14
0,36
0,38
0,26
0,37
1
0,23
0,12
0,15
1,08
2,61
0,24
0,24
0,37
0,65
0,36
0,64
0,38
0,91
0,2  

State aid as defined under Article 87(1) EC Treaty that has been granted by the EU Member States for all sectors 
except  railways  and  has  been  examined  by  the  Commission.  Comprehensive  data  on  transport  are  not  yet 
available for EU-10. All data are quoted at constant prices. Source: DG Competition 

State aid measured as a percentage of GDP 

In relative terms, State aid amounted to 0.6% of EU Gross Domestic Product (GDP) in 2005. 
This  average  masks  significant  disparities  between  Member  States:  the  share  of  total  aid  to 
GDP  ranges  from  0.4%  or  less  in  Belgium,  Greece,  Luxembourg,  the  Netherlands  and  the 
United Kingdom to 1.4% or more in Cyprus, Hungary, Malta, and Finland (Table 1). The high 
proportion in some of the EU-10 Member States is due largely to pre-accession measures that 
are either being phased out under transitional arrangements or limited in time. In Finland the 
explanation can be found in the relatively large amount of aid to agriculture which represents 
more than 75% of total aid in this country. Indeed, due to the particularities associated with 
aid to agriculture and fisheries, it is worth looking at total aid less these sectors. This second 
indicator  produces  a  rather  different  ranking  of  Member  States.  For  example,  such  aid  in 
Finland represents 0.38% of GDP, just below the EU-wide average of 0.42%.  

It  is  important  to  bear  in  mind  that  some  aid  measures  can  not  be  quantified.  Although  the 
number of measures is limited, the distortion of competition is often very significant and has 
an  impact  on  the  overall  level  of  State  aid,  e.g.,  the  unlimited  State  guarantees  previously 
available to Electricité de France (EDF) or the German Landesbanken. Moreover, of the 114 
recovery  decisions  adopted  since  2000,  there  are  34  cases  for  which  the  aid  can  not  yet  be 
quantified. See recovery of unlawful aid (Part Three below).  

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Moderate downward trend in the overall volume of State aid 

At  the  Stockholm  European  Council  in  2001,  the  Member  States  pledged  to  demonstrate  a 
downward trend in State aid in relation to GDP. The State aid as percentage of GDP indicator 
takes into account the general economic situation in the particular Member State. On the other 
hand, when comparing Member States it is important to bear in mind the effect that the trend 
in GDP has on this indicator. Member States that have experienced relatively high economic 
growth could theoretically increase the level of aid and still demonstrate a downward trend. 
The degree to which Member States have achieved the goal to reduce State aid or not can be 
measured by looking at total State aid relative to GDP over a period of one year, i.e. the trend 
from  2004  to  2005  or  by  observing  the  underlying  trend  over  the  periods  2001-2003  and 
2003-2005.  In  order  to  eliminate  as  far  as  possible  annual  fluctuations  and  the  effects  of 
delayed reporting6, the latter option is preferred.  

In the EU-157, the downward trend of the volume of State aid8 in the end  of the  1990s has 
leveled off since 2000 (see Table 2 below). While from 2000 to 2002 still above €60 billion9, 
it fell just below €60 billion in the years 2003-200510.  

Table 2: Trend in the level of State aid in the EU Member States, 1995-2005 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Annual 
average 
2001-03

Annual 
average 
2003-05

EU-25

Total state aid less railways in billion €

as % of GDP
Total state aid less agriculture, fisheries and 
transport in billion €

as % of GDP

EU-15

49.1

0.48

49.9

0.48

56.5

0.54

50.4

0.49

Total state aid less railways in billion €

as % of GDP
Total state aid less agriculture, fisheries and 
transport in billion €

as % of GDP

78.1

0.98

57.9

0.72

76.7

0.94

57.5

0.70

97.2

1.13

77.6

0.90

65.1

0.73

49.5

0.56

56.4

0.61

39.9

0.43

60.2

0.62

43.9

0.45

61.5

0.63

45.4

0.46

68.0

0.68

50.5

0.51

56.6

0.57

40.4

0.41

64.7

0.61

46.0

0.43

59.1

0.58

42.4

0.42

63.8

0.59

45.1

0.42

58.7

0.57

42.2

0.41

52.3

0.50

62.0

0.63

45.4

0.46

47.2

0.45

58.1

0.58

41.7
0.41  

Note:  The  exceptionally  high  figure  in  1997  can  be  largely  attributed  to  the  Credit  Lyonnais  case  in  France. 
Similarly the relatively high figure in 2002 is due in part to the substantial guarantee awarded as a part of the 
restructuring  package  to  Bankgesellschaft  Berlin  AG  (C  28/2002).  For  the  EU-10,  comprehensive  data  on 
transport  are  not  yet  available,  while  data  on  agriculture  are  available  for  2004  and  2005  only.  Source:  DG 
Competition, DG Agriculture, DG Fisheries, DG Transport. 

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9 

10 

In  spite  of  the  Member  States’  obligation  (in  the  Commission  Regulation  No  794/2004  of  21  April 
2004)  to  report  State  aid  expenditure  figures  for  the year  t-1,  some  Member  States  are  able  to  report 
figures for some measures only for year t-2. In addition, unlawfully granted State aid is included in the 
Scoreboard  data  only  after  Commission’s  decision  on  particular  unlawful  aid  case  and  retroactively 
added to the year in which the aid was granted. Therefore, overall aid levels tend to be underestimated 
for the most recent years.  
Only EU-15 is presented here because the transport aid figures for EU-10 are not comparable for the 
pre-accession period. 
Total State aid less railways. 
The high total State aid figure in 2002 can be explained by exceptional large amount (€6.2 billion) of 
restructuring aid for Bankgesellschaft Berlin AG. 
As there is a break in the times series for agriculture data, it is not possible to draw conclusions on a 
trend. For conclusions on trend the State aid less agriculture, fisheries and trend time series are more 
appropriate.  

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Total  state  aid  less  agriculture,  fisheries  and  transport  figure  (see  Table  2  above)  shows  a 
downward trend from an annual average of €52 billion in the period 2001-2003 to an annual 
average of €47 billion in the period 2003-2005. This decrease can mainly be explained by the 
high  overall  aid  levels  in  the  period  2001-2002,  caused  by  the  restructuring  aid  to 
Bankgesellschaft Berlin (BGB)11. However, this suggests that the underlying trend is slightly 
downward.  While  State  aid  to  the  coal  sector  shows  a  clear  downward  trend,  aid  to  the 
environment  has  increased  significantly  in  recent  years.  Aid  for  all  other  objectives  has 
remained relatively stable. The level of expenditure has fluctuated in several Member States. 
These  fluctuations  do  not  appear  to  reflect  changes  in  national  policies  but  are  rather 
influenced by a relatively small number of large cases (for example, €4 billion for Polish coal 
in 2003, €2 billion to the Czech banks in 2003 and €1.4 billion to Alstom in 2004, in addition 
to  around  €8  billion  to  BGB  in  2001-2002).  Total  State  aid  less  agriculture,  fisheries  and 
transport  relative  to  GDP  decreased  from  0.50%  of  GDP  to  0.45%  of  GDP  over  the  two 
periods under review. 

The EU average of State aid less agriculture, fisheries and transport expressed as percentage 
of  GDP  masks  differences  between  Member  States.  The  sharpest  falls  can  be  observed  in 
Czech Republic, Cyprus and Malta due largely to the phasing out of pre-accession measures. 
Ireland,  Denmark  and  Germany  experienced  also  a  significant  decrease.  The  decrease  in 
Ireland  was  primarily  the  result  of  a  lowering  the  Irish  Corporation  Tax12  coupled  with  an 
increase  in  GDP.  In  Denmark,  the  decrease  was  mainly  due  the  reductions  of  aid  under 
several  aid  measures  for  environment,  employment  and  energy  saving.  In  Germany  the 
decrease  can  also  be  explained  by  the  declining  aid  to  the  coal  industry  in  addition  to  the 
above mentioned BGB case. 

In contrast, State aid in relation to GDP increased significantly during the two periods under 
review in a number of Member States: in Sweden, the increase can be attributed to the aid for 
environment and energy saving measures; in Slovakia due to increased regional and sectoral 
aid  for  steel;  in  Poland  the  increase  can  be  explained  largely  by  restructuring  aid  for 
companies in difficulties. 

1.2. 

Sectoral distribution of aid 

Sectoral distribution of aid varies considerably among Member States and over time 

Although  the  data  do  not  provide  an  accurate  picture  of  the  final  recipients  of  the  aid,  they 
nevertheless give some indication as to which sectors are favoured by each Member State. In 
2005, around 65% of State aid in the Member States was earmarked for the manufacturing13 
and service sectors. A further 26% was directed towards agriculture and fisheries, 6% for coal 

11 

12 

13 

C 28/2002, Restructuring State aid for the Bankgesellschaft Berlin amounted to €8 billion (granted in 
2001 and 2002).  
The corporation tax rate in Ireland has been lowered progressively in recent years and is 12.5% from 
2003. This has reduced the comparative value of the preferential 10% rate to the manufacturing sector, 
therefore contributing to the decline, in monetary terms, of aid to this sector. 
For the purposes of the Scoreboard, the manufacturing sector includes aid for steel, shipbuilding, other 
manufacturing  sectors,  aid  for  general  economic  development  and  aid  for  horizontal  objectives 
including research and development, SMEs, environment, energy saving, employment and training for 
which  the  specific  sector  is  not  always  known.  As  a  result,  data  on  aid  to  manufacturing  may  be 
overestimated.  

EN 

10 

   EN 

 
                                                 
and 2% to the transport (excluding railways) sector and the remaining 1% went to other non 
manufacturing sectors14 (Graph 1). 

There are significant differences between Member States in the sectors to which they direct 
aid (Table 3). Aid directed at the manufacturing and service sectors represented 80% or more 
of overall aid in Luxembourg, Slovakia, Portugal, Sweden, Italy, Malta and Denmark. Aid to 
the  agricultural  and  fisheries  sectors  accounted  for  60%  or  more  of  total  aid  in  Lithuania, 
Finland and Estonia while the share of  aid to the coal  industry was relatively high in Spain 
(29%), Germany (13%) and Poland (12%). 

14 

Other  non-manufacturing  includes  aid  for  mining  and  quarrying,  oil  and  gas  extraction,  aid  for 
electricity gas and water supply and aid for construction.  

EN 

11 

   EN 

 
                                                 
Graph 1: Total State aid by sector, EU-25, 2005 

Transport excluding 
railways
2%

Coal
6%

Other non-
manufacturing
1%

Agriculture and 
Fisheries
26%

Manufacturing and 
Services
65%

Note: State aid as defined under Article 87(1) EC Treaty that has been granted by Member States for all sectors 
except railways  and  has  been  examined  by the  Commission.  Source: DG  Competition, DG Transport and DG 
Fisheries and DG Agriculture.  

Table 3: Sectoral distribution of aid by Member State, 2005 

% of total

Million euro

Manufacturing

EU-25
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

59
71
71
79
58
23
66
52
56
34
79
49
32
18
85
62
81
58
40
37
14
44
96
20
81
68

Services
(including 
tourism,
financial, 
media and
culture)
5
2
2
2
3
6
5
6
11
9
4
23
6
0
15
1
1
2
5
0
75
4
1
1
3
2

Agriculture

Fisheries

Coal

Transport 
excluding 
railways

Other non-
manufacturi
ng

Total

26
23
26
11
25
71
24
10
29
57
9
11
42
78
0
35
15
31
55
51
2
43
3
77
10
19

1
0
0
1
0
0
5
3
0
1
1
0
0
1
0
0
0
2
0
0
1
0
0
0
0
0

6
0
0
0
13
0
0
29
0
0
0
0
0
0
0
2
0
0
0
12
0
8
1
0
0
1

2
2
0
7
1
0
0
0
4
0
6
6
20
0
0
0
3
7
0
0
0
0
0
2
6
3

1
2
1
0
0
0
1
0
0
0
0
11
0
3
0
0
0
0
0
0
8
0
0
0
1
7

63750
1194
530
1322
20332
49
361
3753
9650
1004
6391
192
107
119
43
1610
142
1987
1370
1874
985
176
253
2678
3111
4518

Due to the rounding of figures, the percentages of some Member states do not sum up to exactly 100. Source: 
DG Competition, DG Transport and DG Fisheries and DG Agriculture. 

EN 

12 

   EN 

 
 
 
1.3. 

State aid to the transport sector  

The Commission’s State aid control in the transport sector is rather complex arising from the 
need to take account not only of the general provisions on State aid, but also the special rules 
in  the  Treaty  and  secondary  legislation  dealing  specifically  with  transport,  in  particular 
Article 73 of the Treaty as implemented by Regulations 1191/6915, 1107/7016 and 1192/6917. 
In addition, to reinforce the internal market and economic and social cohesion, Article 154 EC 
Treaty provides for Community support, in the context of open and competitive markets, of 
trans-European  networks.  Moreover,  many  transport  operators  perform  public  service 
functions and benefit from public financing. While Community law, in the transport field in 
particular,  does  indeed  contain  a  number  of  mechanisms  effectively  offering  the  possibility 
for Member States to provide services of general economic interest (SGEI), the Commission 
must  check  that  the  public  financing  granted  complies  with  the  rules  laid  down  in  order  to 
ensure that this financing does not distort competition. States are also involved in financing 
transport infrastructure, and this is raising more and more questions about the application of 
the State aid rules with the development of the commercial operation of certain infrastructures 
(ports,  airports,  etc.).  The  Commission  constantly  develops  and  specifies  its  practice, 
distinguishing  in  particular  between  infrastructures  used  by  an  economic  or  commercial 
operator and infrastructures that are clearly connected with public authority functions or those 
that are open to all users on a non-discriminatory basis and which do not benefit a particular 
undertaking. 

For  the  transport  sector  as  a  whole,  excluding  railways,  around  €1.6  billion  of  aid  was 
awarded  per  year  over  the  period  2003-2005,  a  slight  decrease  compared  to  the  annual 
average  over  the  period  2001-2003.  These  data  refer  to  the  EU-15  Member  States  only  as 
comprehensive data on existing aid to the transport sector are not yet available for the EU-10 
(Table 4). 

More  than  76%  of  total  transport  aid  (around  €1.2  billion  per  year)  was  awarded  to  the 
maritime  sector  during  the  period  2003-2005.  The  largest  amounts  were  given  by  Italy, 
France, Sweden and the Netherlands. 

Before liberalisation of the airline sector, considerable amounts of aid (exceeding €2.5 billion 
in  1994  and  1995)  were  awarded  to  national  airlines  for  restructuring  in  the  mid-nineties. 
Since  1997,  however,  aid  levels  to  the  industry  have  fallen  dramatically  though  some  aid 
continues to be authorised. Over the period 2003-2005, an annual average of €85 million of 
aid was awarded to the air transport sector (Table 4). 

15 

16 

17 

Regulation (EEC) No. 1191/69 of the Council of 26 June 1969 on action by Member States concerning 
the obligations inherent in the concept of a public service in transport by rail, road and inland waterway. 
Regulation (EEC) No. 1107/70 of the Council of 4 June 1970 on the granting of aid for transport by rail, 
road and inland waterway. 
Regulation  (EEC)  No.  1192/69  on  common  rules  for  the  normalisation  of  accounts  of  railway 
undertakings  is  particularly  important  from  a  State  aid  monitoring perspective  as  it  exempts  from  the 
notification  procedure  a  number  of  different  compensations  from  public  authorities  to  railway 
undertakings. 

EN 

13 

   EN 

 
                                                 
Table 4: State aid to the transport sector (excluding railways), EU-15, 2001-2005, in 
million € 

Transport sector

Annual average 2001-2003

Annual average 2003-2005

Road and combined transport
Maritime transport
Inland water transport
Air transport
Total

303
1 121
9
369
1 802

287
1 236
12
85
1 620  

Note: Comprehensive data on all existing aid to the transport sector are not yet available for the EU-10. Source: 
DG Energy and Transport 

Railways 

Much of the public financing of the railways is not notified to the Commission, either because 
the financing, due to the lack of liberalisation of the sector, is not deemed by Member States 
to  constitute  State  aid  within  the  meaning  of  Article  87(1)  of  the  Treaty,  or  because  it 
represents compensation for public services in accordance with Regulation 1191/69. Member 
States  are  however  required  to  report  to  the  Commission  overall  public  expenditure  to  this 
sector. Disparities between Member States may reflect different interpretations of the scope of 
this annual reporting exercise (Table 5). 

Table 5: Subsidies(1) to the railway sector, 2000-2005, in million €  
2002

2003

2001

2004

2000

EU-25
EU-15
EU-10
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Latvia
Lithuania
Luxemburg
Hungary
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

33 259
33 259
-
2 164
-
672
9 308
-
446
1 350
6 482
373
6 246
-
-
208
-
2 051
649
-
16
-
-
403
851
2 039

41 951
41 951
-
2 205
-
731
9 385
-
625
1 349
8 770
440
6 839
-
-
255
-
2 686
649
-
22
-
-
359
852
6 785

40 695
40 695
-
2 278
-
714
9 515
-
552
1 346
9 132
491
7 236
-
-
264
-
2 946
664
-
25
-
-
412
892
4 228

39 485
38 605
881
2 412
239
813
9 144
12
636
1 338
7 921
544
6 006
3
0
293
434
3 322
647
104
58
88
0
489
1 003
3 977

40 245
39 051
1 193
2 057
239
813
8 239
12
329
1 370
9 120
416
5 699
15
5
310
396
2 936
632
172
56
297
57
572
1 167
5 335

2005

39 850
38 708
1 141
826
264
846
8 114
12
257
455
9 912
576
6 040
23
6
315
421
2 384
636
184
0
139
93
516
1 271
6 561  

(1) Includes all public subsidies that have been communicated to the Commission as well as subsidies that have 
been  notified  and  authorised  by  the  Commission  under  relevant  State  aid  rules.  However  the  figures  exclude 
compensation for services of general economic interest. Source: DG Energy and Transport. 

See also Part IV on legislative and policy developments in the transport sector. 

EN 

14 

   EN 

 
1.4. 

State aid to the agriculture and fisheries sectors 

The total amount of State aid awarded to the agricultural sector was estimated at just over €16 
billion in 2005. Germany (€5 billion), France (€2.7 billion) and Finland (€2 billion) reported 
the highest figures. The data are based on a new annual reporting exercise introduced for the 
first time in 2004.  

Expenditure  figures  are  currently  not  available  by  type  of  aid  measure  (investment  aid, 
environmental  protection,  encouraging  quality  products  etc.)  used  by  the  various  Member 
States  in  the  agricultural  sector.  However,  an  analysis  of  the  349  decisions  taken  by  the 
Commission between 1 January 2005 and 31 December 2005 provides an useful overview of 
the situation in the EU-25 Member States.  

Table 6: Main procedure types of aid measures for the agricultural sector, EU-25, 2005 

Member State
EU-25
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

Notified aid 
236
4
5
6
19
1
1
31
18
2
74
2
8
7
0
3
0
12
5
3
4
7
2
3
2
17

Non notified aid 
25
1
0
1
2
0
1
2
5
1
5
0
1
0
0
0
0
1
1
0
0
0
0
2
0
2

Exemption agriculture
88
0
2
0
10
0
1
12
15
0
10
0
6
0
0
1
0
11
0
1
0
0
1
2
0
16

Source: DG Agriculture 

These decisions involved 236 new aid measures which comprise aid schemes and (rather rare) 
one-off support measures for individual companies. These new notifications frequently cover 
more  than  one  type  of  aid.  For  example,  investment  aid  may  be  combined  with  aid  for 
consultancy costs or technical support with aid for encouraging quality products. Furthermore 
there  were  25  non  notified  aid  measures,  aid  which  was  put  into  effect  in  breach  of  the 
obligation to notify, or before it was approved. Of the total of 261 aid measures, 79 or 30% 
were  notified  by  Italy,  followed  by  Spain  (33  / 13%),  France  (23  /  9%)  and  Germany  (21  / 
8%). 

Compared to these figures, the use among Member States of the Block Exemption Regulation 
for  certain  types  of  State  aid  granted  to  small  and  medium-sized  agricultural  enterprises  is 
rather  different.  Out  of  a  total  of  88  exemptions  the  United  Kingdom  submitted  16 
information  forms  (18%),  followed  by  France  (15  /  17%),  Spain  (12  /  14%)  and  the 
Netherlands (11 / 13%).  

EN 

15 

   EN 

 
The total amount of State aid awarded to the fisheries sector was estimated at around € 354 
million of which Spain accounted for €98 million, Italy €83 million, France €40 million and 
the Netherlands €33 million. 

1.5. 

State aid to the coal and steel sectors 

The  European  Coal  and  Steel  Community  Treaty  expired  on  23  July  2002.  Thereafter,  a 
Council  Regulation  established  a  new  legal  framework  for  state  aid  to  the  Community  coal 
industry, while the general State aid rules were applied for the steel sector, with the exception 
that no investment or restructuring aid may be granted to steel production unless it is closure 
aid18. 

The overall amount of State aid to the coal sector in the Union stood at €4.1 billion in 2005. 
The underlying trend is downward with the annual average dropping from €8.7 billion for the 
period 2001-2003 to €6.6 billion for the period 2003-2005. Germany contributed most to this 
fall (Table 7). 

In 2005, around 64% of the total related to current production. As from 2001, aid to current 
production  has  decreased  significantly  and  steadily  in  line  with  the  agreements  on  the 
reduction of volumes of aid to the coal industry. As stipulated by Regulation 1407/2002, the 
total amount of aid to current production to be granted annually shall in any event not exceed 
the amount of aid authorized by the Commission for the reference year 2001. As from 2004, 
production aid per employee in the EU was much lower than in previous years as the EU-10, 
of  which  Poland  has  by  far  the  most  workers  (around  100,000  underground),  did  not  grant 
production aid, with the exception of Hungary.  

Eight Member States granted aid to the coal sector in 2005: Germany (€ 2.7 billion), Spain (€ 
1.1  billion),  Poland  (€  219  million),  Hungary  (€  38  million),  the  United  Kingdom  (€  37 
million),  Slovenia  (€14  million),  Slovakia  (€  2  million)  and  the  Czech  Republic  (€  0.3 
million).  With  regard  to  Germany,  the  Commission  approved  the  restructuring  plan  for  the 
period 2003-2005, which foresees a reduction in total aid from € 3.3 billion in 2003 to € 2.7 
billion in 2005. For the period 2006-2010, the Commission approved a further restructuring 
plan  which  foresees  a  total  amount  of  aid  of  some  €  12  billion.  In  December  2005  the 
Commission also approved the Spanish restructuring plan concerning the period 2003-2005, 
after having opened an investigation procedure. A new restructuring plan for the period 2006-
2010  is  currently  under  investigation.  For  France,  aid  measures  were  approved  to  cover  the 
costs  of  closure  of  the  last  underground  mines  which  shut  in  April  2004.  For  the  United 
Kingdom,  the  Commission  approved  an  investment  aid  scheme  covering  the  period  2003-
2005 which amounted to just under € 90 million.  

Broadly-speaking, coal mining in the EU-10 Member States is more competitive than in the 
EU-15 Member States. Poland has by far the largest coal industry and produces far more than 
the other Member States combined. The Commission approved a long term restructuring plan 
for the period 2004-2010 which also aims at dealing with inherited liabilities of the past. The 
approved  measures  for  the  period  2004-2006  amount  to  €  1.5  billion.  For  Hungary,  the 
Commission  approved  a  long  term  restructuring  plan,  which  contains  the  granting  of 
production  aid,  up  to  the  value  of  €255  million  for  the  period  2004-2010.  For  the  Czech 

18 

Aid  under  the SME-Regulation No 70/2001  remains  possible  with  the  exception of  larger  projects as 
defined in Art. 6 of the said SME-Regulation. 

EN 

16 

   EN 

 
                                                 
Republic,  the  Commission  approved  for  the  period  2004-2007  aid  measures  not  related  to 
production  but  to  inherited  liabilities  of  the  past  amounting  to  €  74  million.  With  regard  to 
Slovakia,  the  Commission  approved  an  investment  plan  for  the  period  2005-2010  in  2006. 
State aid for Slovenia has been approved before accession in 2004. 

Table 7: State aid to coal mining, 2001 - 2005 

Yearly average of aid destined 
to current production (in million €)

Yearly average of aid not 
destined to current production
(in million €)

Yearly average of total 
aid to coal sector
(in million €)

EU-25
Czech Republic
Germany
Spain
France
Hungary
Poland
Slovenia
Slovakia
United Kingdom

2001 -2003

2003 - 2005

2001 -2003

2003 - 2005

3674
-
2641
694
291
-
-
-
-
47

3078
-
2403
565
99
11
-
-
-
-

5035
1
1138
1275
732
14
1850
12
4
8

3506
5
652
592
519
22
1669
15
2
29

2001 -2003
8709
1
3779
1969
1024
14
1850
12
4
55

2003 - 2005
6584
5
3056
1157
618
33
1669
15
2
29

Source: DG Energy and Transport 

In 2005 total aid to the steel sector amounted to €139 million, which was granted by Slovakia 
as employment aid (€95 million), the United Kingdom as environmental aid (climate change 
levy - €37 million) and the Czech Republic (€8 million). There is a clear decreasing trend in 
the aid to the steel sector from an annual average of €426 million in the period 2001-2003 to 
€378 million in the period 2003-2005. The downward trend can be largely explained by the 
fact that some Member States (such as France and Sweden) stopped or reduced considerably 
(the  Czech  Republic  and  the  United  Kingdom)  granting  State  aid  after  the  year  2003  to 
companies in the steel sector.  

1.6. 

State aid to the shipbuilding sector 

The amount of State aid to the shipbuilding sector fell from an annual average of €830 million 
for  the  period  2001-2003  to  €583  million  for  the  period  2003-2005.  In  2005,  an  estimated 
€264  million  was  granted  to  the  shipbuilding  sector  mainly  by  Germany  (28%  of  the  EU 
total), Poland (17%), the Netherlands (15%) and Italy (11%).  

1.7. 

State aid for horizontal objectives 

State  aid  for  horizontal  objectives,  i.e.  aid  that  is  not  granted  to  specific  sectors,  is  usually 
considered  as  being  better  suited  to  address  market  failures  and  thus  less  distortive  than 
sectoral  and  ad  hoc  aid.  Research  and  development,  safeguarding  the  environment,  energy 
saving, support to small and medium-sized enterprises, employment creation, the promotion 
of  training  and  aid  for  regional  economic  development  are  the  most  prominent  horizontal 
objectives  pursued  with  State  aid.  Due  to  data  constraints,  this  section  looks  at  horizontal 
objectives in the context of total aid less agriculture, fisheries and transport. 

In more than half of the EU Member States, more than 90% of all the aid awarded in 
2005 was for horizontal objectives 

EN 

17 

   EN 

 
 
On  average,  aid  earmarked  for  horizontal  objectives,  accounted  for  84%  of  total  aid  less 
agriculture,  fisheries  and  transport  in  2005.  The  three  main  horizontal  objectives  were 
environment and energy saving (28% of total aid), regional economic development (19%) and 
R&D (12%) – see Table 8.  

The  remaining  16%  was  aid  directed  at  specific  sectors:  coal  (9%),  services  (2%)19  and 
manufacturing (4%) including aid to rescue and restructure ailing firms. In interpreting these 
figures, however, it is important to bear in mind that some aid measures can not be quantified 
(see section 1.1 above). Another factor that keeps the volume of sectoral and individual aid 
artificially low is that Commission decisions which follow an unlawful aid procedure20 tend 
to refer to aid that was granted up to several years previously and involve ad hoc awards of 
aid to individual companies. Although the data for all years are adjusted retrospectively when 
the Commission takes its decision, the overall level is underestimated. 

In  thirteen  Member  States  (Belgium,  Czech  Republic,  Denmark,  Estonia,  Greece,  Italy, 
Latvia,  Luxembourg,  the  Netherlands,  Austria,  Finland,  Sweden  and  the  United  Kingdom) 
more  than  90%  of  all  the  aid  awarded  in  2005  was  earmarked  for  horizontal  objectives.  In 
another  group  of  six  Member  States  (Germany,  France,  Ireland,  Lithuania,  Poland  and 
Slovenia) the share of horizontal aid was between 70% and 90% while in several others the 
share  was  significantly  lower:  Hungary  (48%),  Cyprus  (45%),  Portugal  (26%)  and  Malta 
(3%). The low share of horizontal aid (and thus relatively high share of sectoral aid) in Malta 
can be explained with a tax relief measure under Business Promotion Act21, while in Portugal 
it  is  due  to  a  large  regional  aid  tax  scheme  in  Madeira  which  in  practice  benefits  a  limited 
number of sectors. In 2005, Hungary granted sectoral aid mainly through an Investment tax 
benefit  scheme,  while  Cyprus  granted  sectoral  aid  mainly  through  tax  relief  under  the 
International Business Enterprises Act. 

Large  disparities  between  Member  States  in  the  share  of  aid  awarded  to  various 
horizontal objectives 

When making comparisons between Member States, it is important to bear in mind that aid 
measures are classified according to their primary objective at the time the aid was approved 
and  not  according  to  the  final  recipients  of  the  aid.  Notwithstanding  the  measurement 
difficulties, the data do give an indication as to which horizontal objectives are favoured by 
Member  State  (see  Table  8).  The  largest  proportion  of  aid  was  directed  exclusively  to  the 
environment and energy saving objectives (28% of the total state aid less agriculture, fisheries 
and  transport),  which  were  extensively  supported  by  Sweden  (88%  of  the  total  aid  in  this 
country), the Netherlands (65%), Germany (47%), Denmark (47%)  and  Finland  (40%). The 
second  most  favoured  horizontal  objective  was  regional  development  (19%  of  total  aid), 
which was mainly supported by Latvia (78% of the total aid in this country), Greece (56%), 
Slovakia (55%), the Czech Republic (52%) and Lithuania (42%). An additional 12%  of  the 
aid  went  to  research  and  development  activities,  which  was  favoured  most  by  Luxembourg 
(27%  of  the  total  aid  in  this  country),  the  Czech  Republic,  Austria  and  Finland  (26%), 
Slovenia  (24%),  the  Netherlands  (22%),  France  and  Estonia  (21%).  Other  objectives  were 
supported  to  a  lesser  extent:  small  and  medium-sized  enterprises  (10%  of  total  aid), 

19 

20 
21 

These percentages exclude those measures with a horizontal objective that are nevertheless earmarked 
for the manufacturing and services sectors 
Such cases are denoted by a ‘NN’ case number 
MA/6/2002 

EN 

18 

   EN 

 
                                                 
employment  (8%),  training  (2%)  and  other  horizontal  objectives  (4%),  which  include 
objectives  such  as  commerce  and  internationalization,  innovation,  culture  and  heritage 
conservation, social aid, natural disasters, and risk capital.  

Table 8: State aid for horizontal objectives and sectoral aid as % of total aid, 2005  

Horizontal Objectives

Sectoral aid (2)

d
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a

t
n
e
m
y
o
p
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Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

(1)  Aid  for  general  regional  development  not  elsewhere  classified.  (2)  Aid  for  specific  sectors  awarded  under 
measures  for  which  there  was  no  horizontal  objective  as  well  as  aid  for  rescue  and  restructuring.  Source:  DG 
Competition. 

1.8. 

Trend in State aid for horizontal objectives and sectoral objectives 

In the mid-1990s, when State aid levels were much higher, the share of total aid granted for 
horizontal  objectives  was  around  50%.  In  line  with  the  commitments  undertaken  at  the 
various  European  Councils,  Member  States  have  however  continued  to  redirect  aid  towards 
such  horizontal  objectives.  It  is  encouraging  to  see  that  all  EU-10  Member  States  have 
progressively redirected aid towards horizontal objectives. The share of horizontal objectives 
in total aid less agriculture, fisheries and transport increased by 11 percentage points between 
2001-2003 and 2003-2005 (see Table 9 below). This upward trend was almost exclusively the 
result  of  a  significant  increase  in  aid  for  environmental  and  energy  saving  objectives  (+8 
points)  and  employment  aid  (+2  points)  as  well  as  a  reduction  in  sectoral  aid,  particularly 
services  (including  financial  services)  (-8  points)  and  coal  (-2.7  points),  for  some  Member 
States. 

EN 

19 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 9: Trend in share of primary objectives in total aid between 2001-2003 and 2003-
2005 as percentage point difference 

Horizontal Objectives

Sectoral aid (2)

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Ireland
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Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

(1)  Aid  for  general  regional  development  not  elsewhere  classified.  (2)  Aid  for  specific  sectors  awarded  under 
measures  for  which  there  was  no  horizontal  objective  as  well  as  aid  for  rescue  and  restructuring.  Source:  DG 
Competition. 

The positive trend was observed, to varying degrees, in the majority of Member States. The 
share  of  horizontal  aid  increased  more  than  the  average  (+11  points)  in  six  countries, 
particularly  in  Latvia  (+44  points),  Lithuania  (+33  points),  Ireland  (+20  points),  the  Czech 
Republic (+16 points), Germany (+15 points) and Spain (+11 points). 

In contrast, the share of horizontal aid in total aid decreased in Denmark (-3.5 points), due to 
the large amount of aid awarded to the broadcasting sector22 in 2004.  

Over  the  period  under  review,  there  were  appreciable  increases  in  the  share  of  total  aid  for 
environmental  and  energy  saving  objectives  in  Sweden  (+26  points),  Germany  (+16  points) 
and  Finland  (+11  points).  For  the  Union  as  a  whole,  there  was  no  significant  change  in  the 
share of aid for other horizontal objectives such as R&D and training.  

22 

N 313/2004 Recapitalization of TV2 Denmark. 

EN 

20 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
State aid for research and development (R&D) 

Investment  in  R&D  is  a  crucial  factor  to  make  the  EU  economy  competitive  and  to  ensure 
sustainable  growth.  The  Barcelona  European  Council  of  March  2002  recognised  this  by 
setting  the  objective  for  expenditure  on  R&D  to  3%  of  GDP  by  2010.  Two  thirds  of  this 
expenditure  should  be  funded  by  the  private  sector.  The  spring  2004  European  Council 
stressed in particular that besides public funding, increased private funding of investment is 
crucial to achieve a sustainable level of 3% and accorded priority status to the strengthening 
of business investment in R&D. 

National  governments  have  a  range  of  measures  to  choose  from  to  fund  and  consequently 
trigger R&D, the exact range and balance of which depend on the national context and form 
the policy mix. These public measures, when granted on a selective basis, might contain State 
aid. Even though State aid constitutes only a small part of public R&D funding, competition 
could  be  distorted  by  favouring  some  enterprises  over  others.  On  the  other  hand,  State  aid 
may  in  certain  circumstances  be  the  best  available  option  to  provide  incentives  triggering 
additional private R&D investment. The Commission thus tries to strike a balance through the 
application  of  the  framework  on  R&D  aid  thereby  ensuring  that  R&D  is  furthered  to  the 
largest extent while minimising distortions of competition as far as possible.  

Figures  for  2004  show  that  investment  in  R&D  is  not  sufficient  to  meet  the  Barcelona 
objectives: for the EU-25 as a whole, R&D investment stood at 1.86% of GDP, Sweden and 
Finland  being  the  only  countries  to  reach  the  3%  level  with  3.70%  and  3.51%  respectively. 
Drawing conclusions from the so far sluggish development of R&D investment, it is clear that 
with  growth  remaining  at  the  current  level,  the  European  economy  will  not  achieve  the 
Barcelona targets by 2010. Rather, growth needs to be accelerated and new impetus given to 
investment in R&D. 

As  regards  State  aid  to  R&D,  total  expenditure  stood  at  €5.6  billion  in  2005.  After  a 
significant  increase  in  2001,  the  level  of  R&D  aid  has  remained  rather  stable.  State  aid  to 
R&D represents a relatively small share in public funding (EU-wide, 0.05% of GDP in 2005) 
although there are significant differences between Member States. In six Member States the 
R&D aid expenditure relative to the GDP in 2005 was above the average mark of 0.05% of 
GDP: Czech Republic (0.10% of GDP), Finland (0.09%), Slovenia (0.09%), France (0.08%), 
Germany (0.07%) and Austria (0.06%). 

EN 

21 

   EN 

 
Table 10: State aid for research and development (R&D) 

Aid to Research & 
Development      
(in million €), 2005

Share of R&D aid 
in total aid, annual 
average 2003-2005

Share of R&D aid 
in total aid   (% 
point difference 
2001-2003 and 
2003-2005)

Share of R&D aid 
to GDP (in %), 2005

Gross domestic 
expenditure on 
R&D as a 
percentage of GDP 
in 2004

EU-25
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

5624
140
102
42
1516
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292
1362
49
737
4
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6.61
3.06
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22.41
1.99
10.55
19.40
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14.77
1.52
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25.33
32.73
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20.21
0.94
26.98
3.89
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1.86
1.9
1.27
2.48
2.49
0.91
0.57
1.07
2.16
1.2
-
0.37
0.42
0.76
1.65
0.89
0.64
1.78
2.24
0.56
0.74
1.45 
0.53
3.51
3.7
1.79  

Note: Total aid refers to total aid less agriculture, fisheries and transport. Source: DG Competition and Eurostat 

1.9. 

State aid supporting regional development and cohesion 

Each Member State targets part of  its State aid towards the least developed regions, the so-
called  ‘assisted  regions’.  For  the  Union  as  a  whole,  an  estimated  €11.3  billion  of  aid23  was 
earmarked exclusively for assisted ‘a’ regions24 in 2005. With the exception of Cyprus, and 
the  cities  of  Prague  and  Bratislava  which  qualify  for  assistance  at  ‘c’  level25,  the  entire 
territories  of  the  EU-10  Member  States  are  eligible  at  ‘a’  level.  Although  a  number  of  aid 
measures in these countries are not earmarked for a specific region, the aid is thus deemed to 
be ‘reserved for’ assisted regions. 

The EU-wide figure of €11.3 billion represented 25% of total aid (less agriculture, fisheries 
and  transport  for  which  a  regional  breakdown  is  not  available).  Disparities  between  the 
Member States in the levels of aid reserved for assisted ‘a’ regions (Table 11) reflect not only 

23 

24 

25 

This  figure  includes  all  aid  specifically  earmarked  for  assisted  ‘a’  regions  regardless  of  the  overall 
objective of the aid. However, due to an absence of data on the final beneficiaries of the aid, it is not 
possible  to  quantify  the  amount  of  aid  granted  through  nation-wide  schemes  from  which  assisted 
regions will also clearly benefit. See spring 2003 update of the Scoreboard for further information on 
methodological issues. 
Article 87(3)(a) provides that aid “to promote the economic development of areas where the standard of 
living  is  abnormally  low  or  where  there  is  serious  underemployment”  may  be  considered  compatible 
with the common market. The ‘a’ regions are largely identical to the Objective 1 regions under the EU 
Structural Funds. 
Article 87(3)(c) 

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differences in regional policy but also the size of each country’s eligible population as well as 
the extent to which each Member State grants aid at a sub-central level.  

Table 11: State aid specifically earmarked for assisted ‘a’ regions, 2005 

Total state aid less 
agriculture, fisheries and 
transport, mio €

Aid for assisted 'a' 
regions, mio €

Aid for assisted 'a' 
regions as a percentage 
of total aid less 
agriculture, fisheries and 
transport

EU-25
Czech Republic
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Latvia
Lithuania
Hungary
Malta
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
United Kingdom

45093
387
15172
14
257
3284
6486
424
5328
29
26
949
117
597
908
956
100
245
559
3509

11307
147
2896
14
244
1250
1723
329
1442
29
26
949
117
10
908
746
100
197
-
181

25
38
19
100
95
38
27
78
27
100
100
100
100
2
100
78
100
81
-
5  

Note:  There  are  no  assisted  ‘a’  regions  in  Belgium,  Denmark,  Cyprus,  Luxembourg,  the  Netherlands  and 
Sweden. For Czech Republic, Spain, Ireland, Portugal, Slovakia, all measures qualify for either ‘a’ or ‘c’ status. 
The  figures  in  the  table  above  refer  to  those  measures  which  were  specifically  earmarked  for  ‘a’  regions.  In 
Cyprus, all measures qualify for ‘c’ assisted status. All data exclude agriculture, fisheries and transport for which 
a  regional  breakdown  is  not  available.  It  is  therefore  not  possible  to  measure  aid  to  assisted  ‘a’  regions  as  a 
proportion of total State aid. Source: DG Competition. 

EN 

23 

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1.10.  Aid awarded under the block exemption regulations 

With a view to reducing the administrative burden for specific types of aid, block exemptions 
for aid to SMEs, training aid, employment aid, certain types of aid in the fisheries sector and 
aid to SMEs in the agricultural sector have come into force over the past few years26. Initial 
results  are  positive:  the  number  of  measures  being  notified  for  these  types  of  aid  has  fallen 
considerably since 2001 as Member States make increasing use of the possibilities offered by 
the7  block  exemption  regulations.  By  30  June  2006,  Member  States  had  informed  the 
Commission  that  they  implemented  almost  1500  block  exempted  measures  since  the 
introduction of the regulations for SMEs and training in 2001 (see Table 12). In 2005 alone, 
the  Commission  received  more  than  400  summary  information  forms  on  newly  introduced 
block exempted measures: 198 on aid for SMEs primarily in the manufacturing and services 
sectors,  a  further  88  for  SMEs  in  the  agricultural  sector,  69  on  training  aid,  26  on  aid  to 
employment, and 22 for exempted aid in fisheries. While the number of forms submitted by 
the Member State in the first six months of 2006 remained stable, the use of employment and 
agriculture block exemption regulations has increased.  

Table 12: Trend in the number of measures for which information forms were 
submitted under the State aid block exemption regulations, 2001-2006 (until 30.6.2006), 
EU-25 

Type of State 
aid block 
exemption
SME
Training
Employment
Agriculture
Fish
Total

2001

2002

2003

Year
2004 

2005

101
48
-
-
-
149

123
80
0

-
-

139
55
8

-
-

203

202

149
79
21
72
1
322

198
69
26
88
22
403

2006       
(1.01-30.06)
83
32
21
56
6
198

Total

793
363
76
216
29
1477

Note: The table excludes cases withdrawn. Figures for the EU-10 are included as of 1 May 2004. Source: DG 
Competition 

26 

Commission  Regulation  (EC)  No  70/2001  of  12  January  2001  on  State  aid  to  SMEs  (OJ  L  10, 
13.01.2001,  pages  33-42)  and  No  364/2004  of  25  February  2004  amending  Regulation  (EC)  No 
70/2001  as  regards  the  extension  of  its  scope  to  include  aid  for  research  and  development  (OJ  L  63, 
28.02.2004, pages 22-29); 
Commission  Regulation  (EC)  No  68/2001  of  12  January  2001  on  training  aid  (OJ  L  10,  13.01.2001, 
pages 20-29) and No 363/2004 of 25 February 2004 amending Regulation (EC) No 68/2001 (OJ L 63, 
28.02.2004, pages 20-21); 
Commission Regulation (EC) No 2204/2002 of 5 December 2002 on State aid for employment (OJ L 
337, 13.12.2002, pages 3-14); 
Commission Regulation (EC) No 1/2004 of 23 December 2003 on State aid to SMEs in the agricultural 
sector (OJ L 1, 03.01.2004, pages 1-16); 
Commission  Regulation  (EC)  No  1595/2004  of  8  September  2004  on  State  aid  to  SME  active  in  the 
production, processing and marketing of fisheries products (OJ L 291 of 14.09.2004, page 3-11). 

EN 

24 

   EN 

 
 
                                                 
 
 
 
 
The  State  aid  block  exemption  regulation  on  SMEs27  was  amended  in  February  2004  as 
regards the extension of its scope to include aid for research and development. Member States 
have increasingly used this possibility. In 2005, around 20% of all block exempted measures 
for State aid to SMEs included aid for research and development.  

See also information about the new block exemption regulation on regional investment aid in 
the Part IV on Legislative and Policy development below. 

As regards expenditure, an estimated €2.9 billion was awarded in 2005 under the three block 
exemption regulations for SMEs, training and employment28. Aid to SMEs accounted for €1.5 
billion,  €1  billion  went  for  training  aid  and  €0.4  billion  for  employment  aid.  In  2005,  Italy 
made up for 31% of total expenditure followed by the United Kingdom (20%), Poland (14%) 
and Germany (13%).  

It  is  also  worth  looking  at  the  share  of  exempted  aid  in  total  aid  directed  at  horizontal 
objectives. EU-wide, aid under the block exemption regulations represented around 8% of all 
aid  directed  at  horizontal  objectives  though  for  several  Member  States  the  share  was 
considerably higher: Poland 63%, Portugal (33%), Estonia (29%), Greece (25%) and Austria 
(20%). 

Table 13: Aid awarded under the block exemption regulations, in million €, 2005 

SME

Training

Employment

Total

Total BER as 
percentage of total 
Horizontal aid

EU-25
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovakia
Finland
Sweden
United Kingdom

1544
73
44
1
306
4
12
65
43
33
427
0
3
0
7
22
0
4
77
75
0
0
1

346

982
37
-
-
49
0
-
34
-
1
488
-
-
0
-
-
-
1
37
22
81
-
-
-
232

420
9
-
-
21
0
49
0
2
-
5
-
-
2
-
4
-
0
-
305
-
1
-
5
17

2946
120
44
1
375
4
61
100
45
34
920
0
3
2
7
26
0
5
114
401
81
1
1
5
596

7.8
17.1
11.3
0.1
3.1
29.1
24.6
4.6
0.8
10.9
18.0
0.5
11.3
7.9
16.1
5.7
0.6
0.4
20.0
62.8
33.0
0.7
0.2
0.2
18.8  

Figures  exclude  expenditure  for  measures  submitted  under  the  block  exemptions  for  agriculture  and  fisheries. 
Source: DG Competition. 

27 

28 

Commission  Regulations  (EC)  No  70/2001  of  12  January  2001  on  State  aid  to  SMEs  (OJ  L  10, 
13.01.2001) 
Data are not yet available for agriculture and fisheries. 

EN 

25 

   EN 

 
                                                 
1.11. 

State aid instruments 

Most favoured aid instrument in the EU-25 is grant  

All State aid represents a cost or a loss of revenue to the public authorities and a benefit to 
recipients.  However,  in  some  cases  the  actual  aid  element  may  differ  from  the  nominal 
amount as in the case of a subsidised loan or guarantee. 

Graph 2: Share of each aid instrument in total aid for manufacturing and services, 
EU-25, 2003–2005 

Tax e xe m ptions
39,53%

Grants
50,49%

Equity participation
1,29%

Soft loans
3,49%

Tax de fe rrals
2,15%

Guarante e s
3,06%

Note: This section on aid instruments excludes the coal sector. Source: DG Competition 

During  the  period  2003-2005,  grants  accounted  for  more  than  50%  of  total  aid  in  the 
manufacturing and service sectors. In addition to aid awarded through the budget, other aid is 
paid  through  alleviation  from  the  tax  or  social  security  system.  Tax  exemptions  made  up 
almost 40% of the total (Graph 2 and Table 14). Belgium, Denmark, Luxembourg and Austria 
provided at least 85% of their aid in the form of grants, other Member States tended to make 
greater use of tax exemptions: accounting for 70% or more of total aid in Portugal, Slovakia 
and Sweden. A similar instrument is a tax deferral which was used by twelve Member States 
during the period under review. Tax deferrals accounted for 13% of all aid in Italy compared 
with an EU average of 2%. 

EN 

26 

   EN 

 
 
Table 14: State aid to the manufacturing sector by type of instrument, 2003-2005 

          TYPE OF AID INSTRUMENT

% of  total

EU-25
Belgium
Czech Republic
Denmark
Germany
Estonia
Greece
Spain
France
Ireland
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

Grants

Tax 
exemptions

50
93
21
88
44
82
71
50
58
44
63
32
37
27
97
36
24
80
88
24
10
70
23
60
22
58

40
1
11
8
51
-
29
39
31
53
19
66
56
63
-
62
60
3
-
52
82
22
72
34
76
40

Equity 
participation
1
0
1
4
2
-
-
1
1
1
0
-
-
4
-
1
-
-
-
8
0
1
6
1
0
1

Soft loans

Tax deferrals Guarantees

3
5
1
0
1
0
-
10
8
0
5
-
7
-
3
1
5
1
10
5
6
4
-
5
1
1

2
0
-
-
-
-
-
-
0
2
13
-
0
6
-
-
9
8
-
4
2
-
-
-
-
0

3
1
66
0
2
18
-
0
2
0
0
3
1
-
-
1
2
8
2
7
0
3
-
0
0
0

Note: due to rounding not all percentage figures sum up precisely to 100. 

There are other forms of aid instrument which vary from one Member State to another. One 
such category covers transfers in which the aid element is the interest saved by the recipient 
during  the  period  for  which  the  capital  transferred  is  at  his  disposal.  The  financial  transfer 
takes the form of a soft loan or tax deferral (mentioned already above). The aid elements in 
this  category  are  much  lower  than  the  capital  values  of  the  transfers.  EU-wide,  soft  loans 
represented around 3% of all aid to manufacturing and services. In Spain, France, and Austria 
the proportion was 8% or more.  

Aid may also be in the form of state equity participation which represented around 1% of all 
aid  to  the  manufacturing  and  service  sectors.  Finally,  aid  may  be  provided  in  the  form  of 
guarantees. The aid elements are generally much lower than the nominal amounts guaranteed, 
since  they  correspond  to  the  benefit  which  the  recipient  receives  free  of  charge  or  at  lower 
than market rate if a premium is paid to cover the risk. EU-wide, guarantees made up 3% of 
total aid. During the period under review, the guarantees were used by Czech Republic (66% 
of total aid), mainly to the banking sector and in Estonia (18% of total aid).  

2. 

PART TWO: SPECIAL FOCUS CHAPTER ON RESCUE AND RESTRUCTURING AID 

2.1. 

Principles for Rescue and Restructuring aid in the Guidelines 

Rescue and restructuring aid is one of the most distortive forms of aid, but may in exceptional 
circumstances  be  justified  by  the  countervailing  benefits.  Such  benefits  are  seen  in  the 
restoration of the long term viability of a firm in difficulty and thus the firm’s survival which 

EN 

27 

   EN 

 
 
may be desirable for employment considerations. While the guidelines leave it to the Member 
States  to  assess  whether  it  is  worthwhile  subsidizing  the  company  to  reach  the  desired 
objectives, the  guidelines  impose  on  the beneficiaries strict conditions in  order  to  guarantee 
that the distortive effects are limited to the minimum.  

Legally, the Rescue and Restructuring Guidelines lay down the application of Article 87(3)(c) 
EC in the particular case of firms in difficulty29. On the basis of the Guidelines, State support 
for such firms may be found compatible with the EC Treaty. This concerns first rescue aid in 
so  far  as  the  ailing  firm  is  provided  with  ad  hoc  short  term  liquidity  support  to  overcome 
acute  financial  shortcomings  or  restructuring  aid  in  form  of  longer  term  support  in  order  to 
redirect the company’s operations. In the case of SMEs, rescue and restructuring aid may also 
be granted on the basis of schemes. 

Rescue  aid  can  be  provided  for  a  period  of  six  months  to  help  the  company  cover  its 
immediate  liquidity  needs  and  undertake  other  urgent  structural  measures.  It  is  limited  to 
temporary support to enable the ailing company to come up with a restructuring plan.  

Restructuring aid can be provided on the basis of a comprehensive restructuring plan with the 
aim  to  restore  long  term  viability.  The  plan  must  define  the  restructuring  period  and  the 
restructuring  costs  as  well  as  the  measures  necessary  to  turn  around  the  company.  Such 
measures should imply operative, industrial and financial restructuring.  

Further conditions for the granting of restructuring aid are first that the aid is limited to the 
minimum  necessary.  To  this  end,  a  predetermined  minimum  threshold  for  private  co-
financing  of  the  restructuring  is  introduced  (the  so  called  significant  own  contribution).  As 
this own contribution normally requires the involvement of external financing it also ensures 
that  the  capital  markets  believe  in  the  restructuring  project’s  ability  to  restore  long  term 
viability. Secondly, in order to compensate for the distortion of competition caused by the aid, 
compensatory measures (e.g. divestment of assets, reductions in capacity or market presence 
and reduction of entry barriers on the markets concerned) are normally obligatory.  

Finally, the "one-time, last-time" principle ensures  in  cases of both rescue and restructuring 
aid that a firm that has received already rescue and restructuring aid in the last ten years is no 
longer eligible for any further aid. A firm has thus only one chance to restructure itself with 
the help of aid. 

2.2. 

Changes from 1999 to the 2004 guidelines 

The 2004 Guidelines impose a closer scrutiny of the distortion created by aid for rescue and 
restructuring operations of large firms. They introduced a stricter application of the "one time, 
last time" principle and reinforced the provision of a significant own contribution by imposing 
fixed  minimum  thresholds.  The  provisions  on  the  avoidance  of  undue  distortions  of 
competition  have  also  been  tightened  in  so  far  as  compensatory  measures  have  become 
compulsory.  

Moreover, the guidelines clarify that aid  to companies in difficulty can only be assessed on 
the basis of the Rescue and Restructuring Guidelines, unless it is automatically exempted by a 

29 

The meaning of «a firm in difficulty» is defined in the point 2.1. of the Community guidelines on State 
aid  for  rescuing  and  restructuring  firms  in  difficulty  OJ  C  244,  1.10.2004,  p.  2–17.http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52004XC1001(01):EN:NOT 

EN 

28 

   EN 

 
                                                 
regulation  (de  minimis  aid,  investment  aid  to  SMEs,  etc).  The  Rescue  and  Restructuring 
Guidelines  reiterate  that  a  firm  in  difficulty  cannot  be  an  appropriate  vehicle  for  promoting 
other  public  policy  objectives  (for  instance  environmental  aid).  Therefore  also  aid  for  other 
public policy objectives, which would normally be compatible under approved schemes, must 
be considered as restructuring aid if it is granted to a company in difficulty.  

Experience as to the practical consequences of the application of the new rules is nevertheless 
limited by now. So far the Commission has taken on the basis of the new Guidelines only a 
few  rescue  aid  decisions,  two  no  objection  decisions  as  regards  restructuring  aid  and  no 
negative decision. 

The new guidelines also introduced two procedural novelties:  

•  First, a simplified procedure for rescue aid was introduced, under which the Commission 
will  decide  within  one  month.  However,  given  that  this  is  tied  to  certain  thresholds  the 
usage has been limited.  

•  Second,  the  Commission  has  left  the  scrutiny  of  restructuring  plans  of  SMEs  to  the 
Member States who are now expected to assess and approve the plans themselves before 
they notify them to the Commission. However, Member States appear to be rather reluctant 
to make use of that provision and seem to prefer to rely on the Commissions assessment in 
any event. 

2.3. 

Commission decisions on rescue and restructuring aid 2000-2005 

There are two  possible  ways  to  look  at Member  States’ use of rescue  and  restructuring aid. 
One is based on the number of rescue and restructuring decisions taken by the Commission in 
the reference period, 2000–2005, whereas the second is based on actual expenditure reported 
by  Member  States.  The  decision-based  approach  also  includes  measures  under  which 
expenditure was made before 2000 (unlawful aid) as well as measures under which aid was 
(or  will  be)  granted  after  2005  (due  for  example  to  the  time  needed  for  Member  States  to 
complete  its  own  granting  procedures).  The  second,  reporting  based  approach  shows  aid 
measures  under  which  expenditure  was  made  between  2000  and  2005  even  if  the 
Commission’s decision was taken before 2000 or after 2005. This section (3.3) presents facts 
and findings based on the first approach while sections 3.4 – 3.7 are based on the expenditure 
approach. As data for the EU-10 Member States30 prior to accession in May 2004 are not fully 
comparable  with  EU-15  data,  this  section  focuses  on  aid  granted  by  the  EU-15  Member 
States. 

The  vast  majority  of  aid  for  rescue  and  restructuring  is  awarded  on  an  individual  (ad  hoc) 
basis  to  ailing  firms,  thus  being  the  type  of  aid  which  is  most  prone  to  distort  competition. 
While some Member States have frequently awarded such aid over the period under review, 
the majority have clearly not adopted such a policy. Looking at the 115 decisions (involving 
compatible and incompatible aid measures) taken on ad hoc rescue and restructuring cases31 
between 2000 and 2005, Germany tops the list with 74 decisions followed by France with 13, 
Italy 9, Spain 7, the United Kingdom 3, Belgium 3, Portugal 2 and the Netherlands 2. Greece 

30 

31 

The  total  for  the  EU-10  Member  States  is  estimated  at  €8.3  billion  though  aid  to  the  Czech  banking 
sector accounts for around 80% of this figure. 
Excluding a small number of rescue and restructuring cases in the agricultural field 

EN 

29 

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and  Austria  each  have  1  case  leaving  five  EU-15  Member  States  (Denmark,  Ireland, 
Luxembourg, Finland and Sweden) with no cases at all. 

Table 15: Number of decisions on rescue and restructuring cases, 2000-2005 

Rescue aid

Restructuring

Total Rescue and 
restructuring

EU-15
Belgium
Germany
Greece
Spain
France
Italy
Netherlands
Austria
Portugal
United Kingdom

35
2
21
0
2
4
3
1
0
0
2

80
1
53
1
5
9
6
1
1
2
1

115
3
74
1
7
13
9
2
1
2
3  

It  is  important  to  note  that  approximately  three-quarters  of  German  cases  concerned  the 
restructuring of former East German companies for which aid was awarded in the late 1990s. 
Most of the decisions on these cases were taken in the period 2000 to 2002 under the 1999 
guidelines which contained some special clauses for assessing restructuring aid. This largely 
explains the drop in the number of ad hoc rescue and restructuring cases for EU-15 on which 
the Commission took a decision32 over the period 2000-2005.  

Table 16: Trend in the number of decisions on rescue and restructuring cases, 2000-2005 

EU-15

26

25

23

15

17

9

2000

2001

2002

2003

2004

2005

Total

115  

Although the EU-15 figure in 2005 is relatively low, there were an additional 5 cases for the 
EU-10  Member  States  and,  more  significantly,  there  are  currently  around  30  rescue  and 
restructuring cases being examined by the  Commission. Around half of these cases concern 
the EU-10. 

Of the 115 decisions on ad hoc cases, 35 concerned rescue aid and 80 restructuring aid. As 
regards  rescue  aid,  Germany  accounted  for  21  cases  with  6  other  EU-15  Member  States 
making up the total of 35. By the end of October 2006, the Commission had taken 3 decisions 
on rescue cases involving one of the EU-10 Member States (Poland).  

As regards restructuring aid, again Germany accounted for more than half of the 80 cases. In 
addition  to  the  EU-15  Member  States,  the  Commission  had,  as  of  October  2006,  taken  9 
decisions  on  restructuring  aid  measures  in  the  Czech  Republic,  Lithuania,  Poland  and 
Slovakia.  

32 

This  includes  no  objection  decisions  and  final  decisions  after  a  formal  investigation  procedure.  It 
therefore excludes decisions to open proceedings, injunctions, etc. 

EN 

30 

   EN 

 
                                                 
Unlawful aid 

More than half of the ad hoc rescue and restructuring decisions over the period 2000-200533 
concerned unlawful aid, i.e., aid which Member States failed to notify to the Commission or 
aid  notified  but  awarded  prior  to  Commission  approval.  Such  aid  is  granted  without 
respecting  the  standstill  obligation  under  Article  88  (3)  of  the  EC  Treaty.  It  is  important  to 
bear  in  mind  that  a  case  is  classified  as  ‘unlawful’  if  at  least  part  of  the  aid  has  not  been 
notified or has been implemented prior to the Commission decision.  

Unlawful  aid  occurs  more  often  in  the  context  of  larger  cases  and  is  more  prevalent  in 
restructuring cases than rescue cases. It is well recognised that Member States may be under 
significant time pressure to rescue an ailing firm with immediate action being perceived as the 
only way to keep a firm afloat, although this cannot justify a breach of the Treaty. This reason 
of time pressure cannot to the same extent be applied to restructuring aid where there is a need 
to prepare a restructuring strategy which should solve a firm’s problems in the longer term. 
However,  despite  the  possibility  to  grant  rescue  aid,  many  restructuring  cases  involving 
unlawful aid do not make use of such an option which would allow to keep a firm afloat while 
at the same time complying with the Treaty obligations. 

Compatible versus incompatible aid 

Around 30 of the 115 cases were found to be incompatible (fully or partly) though only 7 of 
these  were  negative  decisions  on  notified  aid  and  thus  never  implemented.  Of  the  negative 
decisions, two-thirds were taken in the period 2000-2002 and mostly concerned aid to former 
East  German  companies.  On  top  of  the  negative  decisions,  there  were  4  cases  where  the 
notification was withdrawn after opening of the formal investigation procedure.  

It is important to note that in reaching a positive (compatible) decision, the Commission does 
not necessarily approve the aid project as notified or presented by the Member State. After a 
first consultation, Member States often modify the aid measure in order to have it approved 
by  the  Commission.  In  this  way,  the  Commission’s  scrutiny  contributes  to  reducing  the 
(potential) distortion of competition. 

2.4. 

Expenditure on rescue and restructuring aid 

For  the  period  2000-2005,  ad  hoc  rescue  and  restructuring  aid  amounted  to  €24  billion. 
Excluding  the  EU-10  Member  States  for  which  data  are  not  fully  comparable,  the  EU-15 
figure was around €15.5 billion or, on average around 7% of total aid34. This figure, however, 
presents only part of the picture due to two main reasons: 

•  Firstly, there is the important but difficult issue of how to quantify the advantage (known 
as  the  ‘aid  element’)  to  an  ailing  firm  which  has  received  aid  in  the  form  of  a  loan  or 
guarantee. Such forms of aid account for the majority of rescue and restructuring measures. 
At present, various methods are used by Member States to calculate the aid element, some 
of which tend to underestimate the advantage to the company in difficulty. The rescue and 
restructuring Guidelines define a company in difficulty as one that without aid is unable to 
stem losses that “will almost certainly condemn it to going out of business in the short or 

33 

34 

The proportion of unlawful measures was highest in the period 2000-2002 due to the influence of the 
East German cases but even in the period 2003-2005 it remains above 50%. 
The relevant total used for this calculation is total aid less railways, agriculture, fisheries and coal 

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31 

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medium term.” This implies that the aid element could be as high as 100% of the loan or 
guarantee. The Commission services are currently exploring ways in which the calculation 
of the aid element could be improved and harmonised to a greater extent. 

•  Second, there are a number of cases that are difficult or impossible to quantify, e.g., part of 
the aid to France Telecom35, and are therefore not included in the Scoreboard figures.  

The overall volume of rescue and restructuring aid tends to be driven by a limited number of 
large cases such as the Bankgesellschaft Berlin AG in Germany, Alstom and Bull in France, 
British Energy in the United Kingdom, Alitalia in Italy and the Spanish shipyards. Altogether, 
the  ten  largest  cases  in  the  reporting  period  account  for  more  than  90%  of  total  rescue  and 
restructuring aid. 

The figures per Member State reveal that the five largest EU-15 Member States account for 
more  than  95%  of  the  aid.  Germany  made  up  56%  of  total  rescue  and  restructuring  aid, 
followed  by  France  (21%),  Spain  (8%),  United  Kingdom  (7%)  and  Italy  (5%).  A  second 
group of five Member States (Belgium, Greece, Netherlands, Austria and Portugal) awarded 
relatively  small  amounts  of  aid  while  five  Member  States  (Denmark,  Ireland,  Luxembourg, 
Finland  and  Sweden)  did  not  award  any  ad  hoc  rescue  and  restructuring  aid  to  ailing  firms 
between 2000 and 2005.  

In  relative  terms  (per  mille  of  GDP),  the  6  biggest  grantors  of  rescue  and  restructuring  aid 
were Germany (0.65‰), France (0.32‰), Spain (0.26‰), Belgium (0.20‰), Greece (0.11‰) 
and United Kingdom (0.11‰). 

Table 17: Rescue and restructuring aid, total expenditure 2000-2005, in million € 

Rescue aid

Restructuring

Total rescue and 
restructuring aid

Permille of GDP

EU-25
EU-15
EU-10
Belgium
Germany
Greece
Spain
France
Italy
Netherlands
Austria
Portugal
United Kingdom

2 257
2 177
80
161
480

573
107
9

847

21 617
13 371
8 246
176
8 159
110
1 292
2 630
631
0
78
19
275

23 873
15 548
8 326
337
8 639
110
1 292
3 203
738
9
78
19
1 122

0,38
0,26
2,81
0,20
0,65
0,11
0,26
0,32
0,09
0,00
0,06
0,02
0,11  

The total amount of restructuring aid awarded by the EU-15 Member States over the period 
2000-2005  is  estimated  at  €13.4  billion.  By  comparison,  cases  of  rescue  aid  account  for  a 
small proportion of the total - €2.2 billion over the period under review awarded by six of the 
EU-15 Member States. Although the amount of rescue aid is relatively low, it is worth noting 
that  a  significant  number  of  restructuring  cases,  which  were  not  preceded  by  rescue  cases, 
also included a rescue component. This rescue component is then assessed together with the 
restructuring part of the aid. 

35 

C13a/2003 (ex N779/2002) Commission Decision of 2 August 2004 on the State Aid implemented by 
France for France Télécom (notified under document number C(2004) 3060) 
http://ec.europa.eu/comm/competition/state_aid/register/ii/by_case_nr_c2003_000.html#13a 

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32 

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2.5. 

Sectoral distribution 

Although  a  sectoral  distribution  is  largely  dependent  on  the  large  aid  cases,  it  nevertheless 
provides an indication of the sectors benefiting from rescue and restructuring aid. Due almost 
entirely  to  the  Bankgesellschaft  Berlin  AG  case,  55%  of  total  rescue  and  restructuring  aid 
granted between 2000 and 2005 was awarded to the financial services sector. A further 32% 
of  the  total  went  to  the  manufacturing  sector  in  nine  EU-15  Member  States.  The  non-
manufacturing sector, made up largely of aid to British Energy, accounted for 7% while the 
transport  sector  (less  railways)  accounted  for  6%.  More  than  half  the  aid  to  this  sector  was 
awarded to the airline Alitalia.  

Table 18: Rescue and restructuring aid by sector, 2000- 2005, in million € 

Financial services

Manufacturing 
Sectors

EU-15
Belgium
Germany
Greece
Spain
France
Italy
Netherlands
Austria
Portugal
United Kingdom

8 677

8 496

102

78

4 860
202
117

1 291
3 203
25
9

6
8

Other Non 
Manufacturing 
sectors

1 116

1

1

0

1 115

2.6. 

Aid instruments 

Other services

Transport 
excl.railways

Total

0
0

895
135
25
110

611

13

15 548
337
8 639
110
1 292
3 203
738
9
78
19
1 122 

The  type  of  aid  instrument  varies  considerably  from  one  Member  State  to  another  and 
between rescue aid and restructuring aid. Over the period 2000-2005, soft loans accounted for 
77% of total rescue aid followed by guarantees (23%). In contrast, guarantees made up 50% 
of  total  restructuring  aid  followed  by  grants  or  capital  injections  (37%)  and  equity 
participation (11%).  

Table 19: Rescue and restructuring aid by type of instrument, 2000-2005, in million €  

Rescue aid

Restructuring aid

Grants

Soft loans Guarantees

Total 
rescue

Grants

Tax 
exemptions

Equity 
participation

Soft loans

Tax 
deferrals

Guarantees

Total 
restructuring

Total 
rescue and 
restructurin
g

EU-15
Belgium
Germany
Greece
Spain
France
Italy
Netherlands
Austria
Portugal
United Kingdom

135

135

0

1 535

14

573

92

9

847

507

26

466

15

2 177

4 993

161

480

573

107

9

847

1 883

558

2 013

258

6

275

114

0

114

1 495

176

8

110

616

197

373

13

0

0

86

0

1

4

82

0

6 683

0

6 266

0

339

78

0

13 371

15 548

176

8 159

110

1 292

2 630

631

0

78

19

275

337

8 639

110

1 292

3 203

738

9

78

19

1 122

2.7. 

SMEs in difficulty 

In addition to ad hoc awards of aid, eight EU-15 Member States made use of the possibility in 
the rescue and restructuring Guidelines to award aid to SMEs in difficulty through schemes. 
The  Commission  took  a  decision  on  just  over  30  such  schemes  over  the  period  2000-2005. 
The vast majority of schemes were approved. The total amount of aid awarded through such 
schemes was estimated at €1.1 billion. 

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33 

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3. 

PART THREE: RECOVERY OF UNLAWFUL AID

36 

Article 14 (1) of Council Regulation 659/1999 states that “where negative decisions are taken 
in cases of unlawful aid, the Commission shall decide that the Member State concerned shall 
take all necessary measures to recover the aid from the beneficiary.”  

As  of  30  June  2006,  there  were  80  pending  recovery  decisions,  compared  to  84  on  31 
December 2005. In the first half of 2006, 8 pending recovery cases were closed, whilst four 
new  recovery  decisions  were  taken  (Table  20).  The  geographical  distribution  of  pending 
recovery cases remains relatively stable: Germany accounts for the largest number of pending 
recovery cases (30%). Taken together, Spain, Italy and France account for a further 53% of all 
pending recovery cases. There are no pending cases in 13 Member States. 

Table 20: Pending recovery cases by Member State, first semester 2006 

EU-25
Germany
Spain
Italy
France
Belgium
Netherlands
Greece
Portugal
Ireland
Poland
Finland
Slovakia

Situation 31/12/2005
84
26
19
15
11
2
3
4
1
1
1
1
0

New cases in 1 SEM 2006
4
1
0
0
0
0
1
1
0
0
0
0
1

Cases closed in 1 SEM 2006
8
3
0
2
1
0
1
1
0
0
0
0
0

Situation 30/06/2006
80
24
19
13
10
2
3
4
1
1
1
1
1

Source: DG Competition, DG Fisheries, DG Energy and Transport. 

Table  21  provides  data  on  the  amounts  of  aid  to  be  recovered  under  the  114  recovery 
decisions  adopted  since  200037.  For  80  of  these  decisions,  relatively  accurate  information 
exists on the amount of aid involved. This information shows that the total amount of aid to 
be  recovered  on  the  basis  of  decisions  adopted  between  1/1/2000  and  30/06/2006  is  €  9.3 
billion38.  

36 
37 

38 

Excluding recovery cases in the agriculture sector. 
On  30/06/2006,  there  were  still  a  further  14  recovery  decisions  pending  that  were  adopted  before 
1/1/2000. 
The  autumn  2005 Scoreboard reported  a  total  of €9.4 billion.  This  discrepancy  is  due to  the fact  that 
some Member States submitted a revised estimate of the amounts to be recovered under some schemes. 

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34 

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Table 21: Trend in the number of recovery decisions and amounts to be recovered, 
2000-1st semester 2006 

No. of decisions adopted
No. of decisions for which the amount is 
known
Total aid to be recovered (in million €) 
(1)
Amounts recovered:(In million €)

Date of Decision

2000

2001

2002

2003

2004

2005

1S 2006 Total

16

15

20

11

25

18

10

7

27

20

12

6

4

3

114

80

247,0

1032,5

1258,7

1015,6

5160,4

507,9

76,6

9298,7

225,0

1062,2

1442,0

1230,3

4407,7

2,5

0,0

8369,7

  Of which:
  (a) Principal reimbursed/or in blocked 
account
  (b) Aid lost in bankrupcty
  (c) Interest
Aid registered in bankruptcy
Amount outstanding (2)
% still pending to be recovered
(1)  Only  for  Decisions  for  which  the  aid  amount  is  known.  (2)  Amount  excluding  interest.  Source:  DG 
Competition, DG Fisheries, DG Energy and Transport. 

1078,5
8,7
3008,8
22,0
8,9% 4,8% 17,5% 11,8% 39,0% 99,5% 100% 32,4%

6008,8
281,1
2079,8

3146,1
0,0
1261,6

1037,4
1,2
403,4

911,2
71,3
79,7

894,6
0,7
335,0

905,4
2014,3

17,1
207,9

7,5
505,5

6,2
220,1

133,8
120,3

2,4
0,0
0,1

0,0
0,0
0,0

16,9
50,0

0,0
76,6

For 34 of the recovery decisions adopted since 2000, the Member State concerned has not yet 
submitted reliable information on the aid amount involved. The availability of information on 
amounts to be recovered is particularly limited in the case of aid schemes, especially tax or 
quasi-tax aid measures, and aid measures involving guarantees. The Commission continues its 
efforts to obtain information from the Member States on the aid amounts involved.  

Of  the  €  9.3  billion  of  aid  to  be  recovered  under  decisions  adopted  since  2000,  some  €  6.0 
billion  (i.e.  67.6%  of  the  total  amount)  had  been  effectively  recovered  by  the  end  of  June 
2006. In addition, € 2.1 billion of recovery interests had been recovered and a further € 281 
million of aid was lost in bankruptcy proceedings. A further € 1078.5 million of illegal and 
incompatible aid have been registered in ongoing bankruptcy proceedings. 

Recovery  of  incompatible  State  aid  is  a  lengthy  process:  16  of  the  recovery  decisions  still 
pending  at  the  end  of  June  2006  were  adopted  before  the  year  2000.  Of  the  114  decisions 
adopted  between  2000  and  first  half  of  2006,  only  51  have  been  closed  by  the  end  of  June 
2006 (Table 22). 

Table 22: Trend in the closure of recovery cases 

No. of recovery decisions 
adopted
No. of recovery cases that 
are closed on 30/06/2006

Date of the Decision

2000

2001

2002

2003

2004

2005

1S 2006

Total

16

13

20

7

25

12

10

4

27

12

13

3

3

0

114

51

Source: DG Competition, DG Fisheries, DG Energy and Transport. 

As underlined in the State Aid Action Plan (SAAP), the effectiveness and credibility of State 
aid  control  presupposes  a  proper  enforcement  of  the  Commission’s  decisions.  The 
Commission  therefore  announced  in  the  SAAP  that  it  will  seek  to  achieve  a  more  effective 
and immediate execution of the recovery decisions, which will ensure equality of treatment of 

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35 

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all beneficiaries. To this effect, the SAAP announces that the Commission will monitor more 
closely the execution of the recovery decisions by Member States. Where Member States do 
not  take  all  measures  available  to  implement  such  decisions,  the  Commission  will  more 
actively pursue non-compliance under Articles 88(2), 226 and 228(2) of the Treaty. 

Table 23 below gives an overview of the pending recovery cases for which the Commission 
has decided to initiate action under Art. 88 (2) or Art 228 (2) EC Treaty. 

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36 

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Table 23: The pending recovery cases for which the Commission has decided to bring 
the case before the Court of Justice 

Case number/title

CR44/97 – Magefesa 

MS
ES

CR49/98
measures 

–

Employment

IT

CR48/99 – CR50/99
CR52/99 – CR54/99
Basque fiscal aid schemes
CR03/99 – Spanish shipyards I

ES

ES

CR38/98
Clark/Scott Paper

–

Kimberly

FR

CR27/99 – Municipalizzate

IT

–

CR62/00
Porzellan (Kahla)
CR62/03
–
employment measures 

Thuringen

DE

Urgent

IT

CR 58-59-60/00 – Basque
fiscal aid schemes

CR 57/03 – Tremonti Bis

CR 36/01– Beaulieu Ter
Lembeek
CR 8/04 – Fiscal incentives for
newly listed companies
CR13/B/2003- France Telecom-
Business Tax Scheme

-

Exonérations
CR57/02
fiscales en faveur de la reprise
d'entreprises
en difficulté -
Article 44 septies CGI
C11/04 - Olympic Airways

C19/02 - Olympic Airways

ES

IT

BE

IT

FR

FR

EL

EL

State of play and recent developments
13/10/99: Commission decision to initiate Art. 88(2) action
against ES
02/07/02: ECJ judgment condemning ES for
implement CEC decision
20/11/00: Commission decision to initiate Art. 88(2) action
against IT
01/04/04: ECJ
implement CEC decision 
05/03/03: Commission decision to initiate Art. 88(2) action
against ES

judgment condemning IT for

failing to

failing to

failing to

26/06/03: ECJ judgment condemning ES for
implement CEC decision
18/10/04: Commission sent letter of formal notice to Spain 
06/10/04: Commission decision to initiate Art. 88 (2) action
against FR 
05/10/06: ECJ judgment condemning FR for failing to execute
CEC decision
19/01/05: Commission decision to initiate Art. 88(2) action
against IT
01/06/06: ECJ judgment condemning IT for failing to execute
CEC decision
16/02/05: Commission decision to initiate Art. 88(2) action
against DE
06/04/05: Commission decision to initiate Art. 88(2) action
against IT

21/12/05: Commission decision to initiate Art. 88(2) action
agains ES

25/01/06: Commission decision to initiate Art. 88(2) action
against IT

25/01/06: Commission decision to initiate Art. 88(2) action
against BE
19/07/06: Commission decision to initiate Art. 88(2) action
against IT 
19/07/06: Commission decision to initiate Art. 88(2) action
against FR

24/10/06: Commission decision to initiate Art. 88(2) action
against FR

14/09/2005: Commission decision to initiate Art. 88(2) action 
against EL
Art 228 failure to comply with judgement of Court of Justice 
(case C415/03)

Source: DG Competition, DG Fisheries, DG Energy and Transport. 

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4. 

PART FOUR: LEGISLATIVE AND POLICY DEVELOPMENTS 

State Aid Action Plan 

Following an extensive consultation process, the Commission has begun to implement various 
aspects  of  the  State  aid  Action  Plan  (SAAP)39,  which  set  out  in  June  2005  the  guiding 
principles  for  a  comprehensive  reform  of  State  aid  rules  and  procedures  over  the  next  five 
years. Since the last Scoreboard was published in the spring, the Commission has adopted the 
following final or draft legislative texts: 

Guidelines for risk capital 

The  Commission  adopted  in  July  2006  Community  guidelines  on  state  aid  to  promote  risk 
capital investments in small and medium-sized enterprises40. The rules will facilitate access to 
finance for SMEs in their early stages of development, particularly where alternative means of 
funding from financial markets are lacking. Better access to capital should spur their growth 
and  create  more  jobs  in  the  EU.  The  Guidelines  form  part  of  the  Commission’s  efforts, 
announced  in  the  SAAP,  to  encourage  Member  States  to  focus  state  aid  on  improving  the 
competitiveness of EU industry, in particular through innovation, and on creating sustainable 
jobs, while minimising distortions of competition. The Guidelines include a ‘safe harbour’ of 
€1.5  million  investment  per  SME  over  12  months  (below  which  a  market  failure  has  been 
found  to  exist),  a  light  assessment  procedure  for  clear  cut  cases  fulfilling  certain  conditions 
and  assessment  criteria  which  ensure  that  state  funding  will  leverage  private  investment, 
target market failures and be proportionate. 

Block Exemption Regulation (BER) for Regional Investment Aid 

In  October  2006,  the  Commission  adopted  a  new  block  exemption  regulation  for  regional 
investment aid41. The Regulation is based on the new Guidelines for regional aid 2007-2013 
which  were  adopted  in  December  2005.  The  objective  of  the  new  Regulation  is  to  simplify 
administrative  procedures  for  Member  States,  while  reinforcing  transparency  and  legal 
certainty. The Regulation exempts Member States to notify regional investment aid schemes 
to  the  Commission  under  Article  88(3)  of  the  EC  Treaty,  if  the  scheme  complies  with  the 
regional aid map and fulfils certain conditions. The Regulation will in particular block exempt 
transparent  forms  of  regional  investment  aid,  that  is  schemes  for  which  it  is  possible  to 
calculate precisely the aid intensity as a percentage of the investment costs ex ante without the 
need for a risk assessment. Regional aid schemes involving public shareholdings, risk capital 
and state guarantees will in principle remain subject to prior notification to the Commission. 
The Commission has also adopted new notification forms for regional aid schemes that do not 
meet the conditions of the new Regulation (e.g. schemes providing for operating aid) and thus 
still  have  to  be  notified  individually  to  the  Commission  for  endorsement  prior  to  their 
implementation.  

39 

40 
41 

COM(2005) 107 final, 7.6.2005, 
http://europa.eu.int/comm/competition/state_aid/others/action_plan/ 
OJ C 194, 18.08.2006, pages 2-22 
OJ L 302 of 01.11.2006, p. 29  

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38 

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Regional aid maps 2007-2013 approved for a first group of Member States 

By the end of November 2006 the Commission has approved under EC Treaty State aid rules 
the  regional  aid  maps  covering  the  period  2007-2013  for  Estonia,  Greece,  Hungary,  Latvia, 
Luxembourg, Malta, Poland, Slovakia, Slovenia, the Czech Republic, Ireland, Lithuania and 
Germany. These decisions form part of a wider exercise to review regional aid systems in all 
Member  States.  A  regional  aid  map  defines  the  regions  of  a  Member  State  eligible  for 
national  regional  investment  aid  for  large  enterprises  under  EC  Treaty  state  aid  rules  and 
establishes the maximum permitted levels of such aid in the eligible regions. The adoption of 
the  map  for  the  Member  State  concerned  is  a  pre-condition  to  ensure  the  continuity  of  the 
regional policy and Structural Fund programmes after 2006, as all current maps will expire on 
31.12.2006.  

Community framework for State aid for research and development and innovation 

In  November  2006,  the  Commission  adopted  a  new  State  aid  Framework  for  Research, 
Development  and Innovation.  The new Framework  will  help  Member  States  wishing  to  use 
State  aid  as  a  complementary  instrument  to  boost  Research,  Development  and  Innovation. 
The Framework sets out a series of guidelines for specific types of State aid measures – such 
as aid for R&D projects, aid to young innovative enterprises and aid to innovation clusters – 
that could encourage additional R&D&I investments by private firms, thus stimulating growth 
and employment and improving Europe’s competitiveness. These guidelines allow individual 
Member States to tailor aid measures to particular situations, subject to the overall test that the 
aid  must  address  a  defined  market  failure,  must  be  well  designed  and  that  the  identified 
benefits  must  outweigh  the  distortions  to  competition  resulting  from  the  aid.  The  new 
Framework is due to apply from 1st January 2007. 

Commission Regulation on de minimis aid 

The  Commission  adopted  in  September  2006  a  revised  draft  regulation  reviewing 
Commission Regulation No 69/2001 on de minimis aid42. Interested stakeholders were invited 
to  comment  on  this  proposal  by  October  after  which  it  was  discussed  with  Member  States 
experts in an advisory committee in November. Currently, discussions are ongoing as to the 
possibility to include the transport sector in the scope of the regulation. The Commission aims 
to adopt a final text by the end of 2006. 

Prolongation of block exemption regulations  

The Commission adopted in July 2006 a draft Commission Regulation43 to extend at least by 
one  year,  the  period  of  application  of  Regulations  (EC)  No  2204/2002  on  State  aid  for 
employment, (EC) No 70/2001 on State aid for small and medium sized enterprises and (EC) 
No 68/2001 on training aid. The prolongation of the validity of these regulations is sought to 
allow for the necessary period of preparation of a future single block exemption Regulation, 
which will regroup the current regulations and possibly add other areas, as announced in the 
State  Aid  Action  Plan.  The  proposals  were  discussed  twice  with  Member  States  experts  in 
advisory committees while stakeholders had the possibility via the internet to comment. The 
Commission aims to adopt a final text by the end of 2006. 

42 

43 

See State aid reform section of the DG Competition website. 
http://ec.europa.eu/comm/competition/state_aid/reform/reform.html 
OJ C 172 of 25.07.2006, p. 6 

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39 

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State Aid to the Transport Sector 

to 

future,  by  allowing 

in  December  2005.  Apart  of  encouraging  modal  shift 

One  of  the  main  objectives  of  the  common  transport  policy  is  the  promotion  of 
environmentally friendly modes of transport in order to achieve a reduction of road transport. 
For this purpose, two elements are essential. First, Member states need to encourage cleaner 
modes of transport and measures to increase energy efficiency.  This has been  underlined in 
the Commission green paper on energy efficiency from May 2005 and in the proposal for a 
Commission  directive  to  promote  the  purchase  of  clean  vehicles  by  public  authorities, 
less  polluting 
adopted 
transport means,  the  Commission  also  approved  State  aid schemes  to fill the  gap left 
behind the  community's regulatory  framework  aiming  at  producing  cleaner  new vehicles  in 
the  present  and 
filters 
on highly polluting  old vehicles. During  the  ongoing  revision  of  the  guidelines  for  State  aid 
for  environmental  protection,  the  Commission  should  pay  particular  attention  to  the 
promotion of clean transport and energy-efficient transport. Second, the revitalisation of the 
railway sector is considered as a key element in the Community’s common transport policy. 
Rail transport has to be made, once again, competitive enough to remain one of the leading 
players in the transport system in an enlarged Europe. By 2007, the entire European freight 
network, both internationally as well as  nationally, will have  been opened up  completely to 
competition. The arrival of new railway companies should make the sector more competitive 
and  encourage  the  national  companies  to  restructure.  In  this  context,  specific  guidelines  for 
the railway sector will be developed in 2007 with a view to establishing a common approach 
to public contributions to the railway sector. It is necessary from both a legal and a political 
point of view that national authorities, companies and individuals are made aware, in a clear 
and transparent way, of the rules applicable to the railway sector in this new more competitive 
environment. This initiative will significantly increase transparency and legal certainty. 

retrofit particulate 

for  subsidies 

to 

5. 

ONLINE STATE AID SCOREBOARD, REGISTER AND OTHER REPORTS ON STATE AID 

The online Scoreboard contains electronic versions of this and previous Scoreboards as well 
as 
tables: 
http://europa.eu.int/comm/competition/state_aid/scoreboard/ 

indicators 

statistical 

a  wide 

array 

and 

key 

set 

of 

of 

a 

Any  queries  or  requests  for  data  should  be  sent 
Stateaid-Scoreboard@ec.europa.eu 

to 

the  scoreboard  mailbox  at 

State aid Register – a second transparency tool 

The  Commission’s  State  aid  Register  has  been  online  since  2001.  The  Register  provides 
detailed information on all State aid cases which have been the object of a final Commission 
decision  since  1st  January  2000  as  well  as  block  exemption  cases  published  in  the  Official 
Journal.  It  is  updated  daily  and  thus  ensures  that  the  public  has  timely  access  to  the  most 
recent  State  aid  decisions.  It  is  available  on  the  homepage  of  the  Competition  Directorate 
General’s Internet site:  

http://europa.eu.int/comm/competition/state_aid/register/ 

Following an extensive review, a major revamp of the Register is foreseen and should be fully 
operational in early 2007. 

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Annual Competition Report  

The Commission publishes an Annual Report on Competition Policy which summarises the 
most important legal developments and case-law of the year as well as statistical data on the 
Commission’s work during the relevant year. 

http://europa.eu.int/comm/competition/annual_reports/ 

Competition Policy Newsletter 

A  Competition  Policy  Newsletter  is  also  published  three  times  a  year  by  the  Competition 
Directorate-General  of  the  European  Commission.  It  aims  at  describing  and  discussing  in 
more detail legislative developments as well as interesting case-law and covers generally the 
preceding four months. 

http://europa.eu.int/comm/competition/publications/cpn/ 

State aid E-News 

State aid e-News is issued every week to present the latest developments in the area of State 
aid. It features information on new legislative texts and proposals, decisions of the European 
Commission and the Courts of the European Union and other state aid-related documents and 
events.  

http://ec.europa.eu/comm/competition/state_aid/overview/newsletter.html 

6. 

METHODOLOGICAL NOTES 

The Scoreboard covers State aid as defined under Article 87(1) EC Treaty that is granted by 
the  Member  States  and  has  been  examined  by  the  Commission.  Accordingly,  general 
measures  and  public  subsidies  that  have  no  effect  on  trade  and  do  not  distort  or  threaten  to 
distort  competition  are  not  dealt  with  in  the  Scoreboard  as  they  are  not  subject  to  the 
Commission’s  investigative  powers.  For  example,  a  general  tax  break  for  expenditure  on 
research  and  development  is  not  considered  as  State  aid  although  it  may  well  appear  in 
Member  States  national  budgets  as  public  support  for  research  and  development. 
Furthermore, Community funds and instruments are also excluded. See also box on “What is 
a State aid” on page 11 of the spring 2005 update of the Scoreboard. 

All State aid data refer to the implementation of Commission decisions and not cases that are 
still  under  examination.  There  may  be  discrepancies  with  figures  published  in  previous 
Scoreboards  for  a  number  of  reasons:  first,  provisional  or  estimated  figures  may  now  be 
replaced by final data; second, when the Commission takes a decision on a non-notified aid 
measure, the aid in question is attributed to the year(s) in which it was awarded. In cases that 
result in expenditure over a number of years, the total amount is attributed to each of the years 
in  which  expenditure  took  place.  All  data  are  provided  in  million  (or  billion  where 
appropriate) euro at constant 1995 prices but have been re-referenced on the year 2005.  

This autumn 2006 edition of the Scoreboard focuses largely on the year 2005. As in previous 
years, State aid data collected for the Scoreboard are grouped according to primary objectives 
which may be either horizontal or sector-specific. Information on the objective of the aid, or, 
the sector to which the aid is directed, refers to the time the aid was approved and not to the 

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final recipients of the aid. For example, the primary objective of a scheme which, at the time 
the aid was approved, was exclusively earmarked for SMEs is classified as aid for ‘SMEs’. In 
contrast, aid granted under, say, a regional development scheme may ultimately be awarded to 
SMEs, but is not regarded as such if, at the time the aid was approved, the scheme was open 
to all enterprises.  

The following symbols have been used in the Scoreboard: 

n.a. 

not available 

- 

0 

real zero 

less than half the unit used 

Further information on methodological issues may be found on the online Scoreboard: 

http://europa.eu.int/comm/competition/state_aid/scoreboard/conceptual_remarks.html 

EN 

42 

   EN