State aid in cross-border cooperation projects.
Date: 2016-03-16
Institutions: European Committee of the Regions
Subjects: EU programme, European cooperation, State aid, cooperation policy, cross-border cooperation, regional and local authorities, regional cooperation, report

State aid in cross-border 
cooperation projects 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This report was written by Jürgen Pucher and Christine Hamža 
(METIS GmbH). 

It does not represent the official views of the Committee of the Regions. 

More information on the European Union and the Committee of the Regions is 
available  online  at  http://www.europa.eu  and  http://www.cor.europa.eu 
respectively. 

Catalogue number: QG-01-16-281-EN-N 
ISBN: 978-92-895-0868-1 
doi:10.2863/525677 

© European Union, 2016 
Partial  reproduction  is  permitted,  provided  that  the  source  is  explicitly 
mentioned.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contents 

Executive Summary ............................................................................................ 1 

1  Overview of main EU State aid legislation used in ETC 

programmes ................................................................................................. 5 
1.1  De minimis .............................................................................................. 10 

1.2  General Block Exemption Regulation (GBER) ...................................... 13 

1.3  Considerations on specific types of infrastructure and services ............. 18 

1.4  Revenue generation ................................................................................. 21 

1.5  Practical issues regarding State aid in ETC ............................................ 24 

2 

Survey among selected programmes ....................................................... 29 

3  Conclusions ................................................................................................ 37 

4  References .................................................................................................. 41 

 
 
 
 
List of Tables and Boxes 

Table 1. Key criteria related to State aid ............................................................... 8 
Table 2. State aid provisions of potential importance in ETC .............................. 9 
Table 3. Specific provisions related to De minimis ............................................ 10 
Table 4. GBER – aid categories of potential relevance for ETC ........................ 13 
Table 5. The Altmark criteria .............................................................................. 20 
Table 6. Approaches related to revenue-generation in projects .......................... 23 
Table 7. State aid from the perspective of the PCM ........................................... 26 
Table 8. Strategic approaches of programme managements (MA, JTS) ............ 27 
Table 9. GBER options relevant for Interreg Baltic Sea Region (BSR) ............. 31 
Table 10. Actors involved in knowledge management ....................................... 37 

Box 1. State aid in ETC programmes in 2007-2013 programming period ......... 28 

 
 
 
 
 
Abbreviations 

AA 
BSR   
CBC   
ECJ 
ERDF 
ETC   
FLC   
GBER 
IP 
JS 
LP 
LRA   
MA 
MC 
NPA   
NWE  
PCM   
PSO   
SGEI  
SME(s) 
TFEU  

Audit Authority 
Baltic Sea Region 
Cross Border Cooperation 
European Court of Justice 
European Regional Development Fund 
European Territorial Cooperation 
First Level Control 
General Block Exemption Regulation 
Investment Priority 
Joint Secretariat 
Lead Partner 
Local and Regional Authorities 
Managing Authority 
Monitoring Committee 
Northern Periphery and Arctic Programme (Interreg V-B) 
North West Europe Programme (Interreg V-B) 
Project Cycle Management 
Public Service Obligation 
Service of General Economic Interest 
Small and Medium Enterprise(s) 
Treaty on the Functioning of the European Union () 

 
 
 
 
 
 
 
 
 
 
 
Acknowledgements 

This study has benefitted to a significant extent from the efforts carried out by 
Interact. The institution’s recently published Question and Answers on State aid 
in  ETC  have  been  a  valuable  source  in  structuring  the  Study.  Further  on  we 
would  like  to  thank  the  representatives  of  those  programmes  that  provided  us 
with  information.  We  fully  respect  their  wish  to  handle  the  information  with 
discretion  since  all  persons  surveyed  have  confirmed  that  State  aid  as  a  legal 
matter ranks among the trickiest elements in project management. Therefore any 
decision  taken  in  practice  bears  a  certain  risk  of  misjudgement  given  that 
important factors can be omitted. 

 
 
 
Executive Summary 

State aid is a legal matter which, even though it is based on clear principles, in 
practice is being governed by a number of secondary regulations and guidelines. 
Practice is acquired by the know-how gained in notification procedures with the 
European Commission and the decisions taken by the European Court of Justice 
(ECJ). Thus State aid is a field of legal expertise where experience-based know-
how is particularly important for taking adequate and proportionate decisions. 

Compared to other types of EU-programmes, European Territorial Cooperation 
(ETC) programmes are challenged by: 

  the  fact  that  the  range  of  possible  activities  is  usually  rather  broad  and 

there are hardly any standardised project types; 

  Funding  volumes  per  partner  are  often  quite  small  -  thus  from  the 
perspective of national State aid authorities ETC is not a main concern. 

Responsibility versus access to expertise 

It  is  mainly  the  Managing  Authorities  (MA)  who  bear  the  responsibility  for  a 
properly  functioning  system  ensuring  State  aid  relevance  in  projects.  The 
responsibilities might be shared between Member States according to provisions 
laid  down  either  in  the  cooperation  programme  or  in  separate  memoranda 
between  the  Member  States.  In  practice  there  is  a  clear  gap  between  the 
responsibility  taken  and  the  access  to  expertise:  national  State  aid  authorities 
have limited capacities and thus it is often hard for programme authorities to get 
any  advice  on  projects.  A  major  systemic  weakness  is  the  general  lack  of 
expertise and capacity in the operative units of ETC programmes – this refers in 
particular to Interreg V-A where Joint Secretariats (JS) are usually rather small 
units  compared  to  the  transnational  or  interregional  strands,  and  often  the 
number of projects they are responsible for are considerable. 

The  experiences  “on  the  ground”  with  external  experts  (legal  advisers)  are 
mixed.  Their  statements  show  that  while  in  some  cases  external  legal  advice 
worked well and was considered helpful, it turned out to be unnecessary in other 
cases. 

De minimis and Block Exemption Regulations as key options 

The  main  options  applied  by  programmes  in  order  to  cope  with  economic 
responsibilities,  i.e.  activities  which  are  State  aid  relevant,  are  in  practice  the 

1 

 
 
 
 
 
 
 
 
 
Block  Exemption  Regulations  (BER)  and  De  minimis.  De  minimis  allows  to 
work without modifications to the co-funding rate. Its key principle is that it is 
applied per undertaking per Member State, which allows for certain flexibility. 

From the BERs the General Block Exemption Regulation (GBER) is in practice 
most frequently applied - several interviewees confirmed that the ‘ETC-specific’ 
Article  20  of  GBER  on  Small  and  Medium  Enterprises  (SMEs)  in  ETC  is  in 
principle a very interesting option but they assume that the effort required in the 
assessment process will still remain considerable. 

There  has  only  been  one  case  reported  where  a  fully-fledged  notification 
procedure has been carried out for an ETC project. 

Specific  types  of  infrastructure  and  services  deserve  particular  attention.  The 
Study points out the following cases: 

  For  research  infrastructure  a  different  perspective  comes  in:  the 
Framework for State aid in research, development and innovation allows 
for the exemption of organisations or infrastructure which is used almost 
exclusively for non-economic activities. 

  Transport  infrastructure  where  State  aid  relevance  has  become  a  major 
point in particular concerns airports and ports. In ETC, ports in particular 
have  frequently  been  the  beneficiaries  in  transnational  programmes  –  an 
extension  of  the  BER  is  in  discussion  to  clarify  port  activities  to  be 
exempted. 

  Services  of  General  Economic  Interest  (SGEI)  as  an  evolving  concept 
which  is  strongly  shaped  by  national  perceptions  deserve  particular 
attention  –  for  such  cases  a  specific  ‘extended’  De  minimis  option  is  in 
place. 

In cases where economic activities are relevant for State aid, the application of 
De  minimis  or  BER  exempts  the  beneficiary  from  the  obligation  to  consider 
revenue generation. But revenues can also stem from non-economic activities: in 
case  of  net-revenue  generating  services  or  infrastructure,  the  intent  of 
Regulations  is  to  consider  the  ex-ante  aspect.  Depending  on  the  financial 
volume of the project as well as the character of the revenues in practice several 
options for the handling of revenues exist. 

2 

 
 
 
 
 
 
 
 
 
Practical issues 

When  considering  the  Project  Cycle  Management  (PCM)  it  becomes  apparent 
that consideration of State aid (and also of revenue generation) goes through all 
of the major stages: 

  The  understanding  of  the  concept  of  State  aid  and  its  handling  is 
particularly relevant at the stages of assessment as well as verification of 
expenditures. 

  The  principle  of  transparency  is  decisive  for  the  guidance  to  applicants, 
the selection in the Monitoring Committee and subsequent contracting. 

One approach could be avoiding any activities that are relevant to State aid: the 
main  and  safe  options  are  the  application  of  public  procurement  or  to  charge 
market  prices  from  the  end  users.  A  frequently  applied  approach  has  been  to 
resort  to  the  publication  and  dissemination  of  results.  But  this  might  not  be 
sufficient to eradicate State aid relevance since it could be rated even as crucial 
(economic)  marketing  activity  or  it  could  be  interpreted  as  sector  specific 
approach. 

Section 2 is devoted to a survey among a limited number of programmes. The 
documents  (programme  manuals)  present  sound  information:  the  interviewed 
programme  managers  from  Joint  Secretariats  have  expressed  concern  that  any 
decision taken in practice entails a considerable risk of misjudgement. 

The  Study  also  presents  a  couple  of  cases  from  the  previous  programming 
period as well as approaches for assessing the current period. 

Conclusions 

The considerations on State aid in ETC projects laid down in this Study point at 
a  major  challenge  in  terms  of  knowledge  management.  The  challenge  goes 
through  all  levels,  i.e.  from  the  European  level  over  Member  States  to 
authorities involved in ETC programmes as MAs. For the due consideration of 
State aid, two elements of knowledge management are of particular importance. 

First, the role of intermediaries such as Interact is crucial in order to: 

  transform  the  expert  language  into  key  questions  and  information  which 
can  be  used  for  awareness-raising,  guidance  and  in  order  to  develop  a 
basic  understanding  to  sort  out  critical  cases  from  a  large  number  of 
incoming projects; 

3 

 
 
 
 
 
 
 
 
 
 
  develop and manage a targeted repository of information which is easily 

accessible such as the Base Camp on State aid run by Interact. 

Second, the option to have access to ad-hoc expertise at national level is crucial 
for  the  management  of  ETC  programmes.  It  is  neither  feasible  nor  efficient  to 
develop  substantial  capacities  for  the  assessment  of  State  aid  relevant  at 
programme  level.  Ideally,  the  officials  working  for  the  institution  hosting  the 
MA would have sufficient knowledge to sort out critical cases and pass them on 
to the national unit for a quick screening and decision. This way, the MA would 
be  enabled  to  take  a  substantiated  decision  based  on  an  adequate  and 
proportional  approach.  However,  this  is  currently  not  a  reality  for  many  ETC 
programmes. 

Sound knowledge management and capacity-building rests on communication at 
eye level and mutual respect rather than on exercising control. Open and shared 
learning between the MA, Audit Authority (AA) and State aid units is currently 
the  exception  rather  than  the  rule.  Functioning  systems  for  the  efficient  and 
effective implementation of State aid rules will in many Member States require 
new  approaches  for  communication  and  interaction  between  the  main  bodies 
involved. 

4 

 
 
 
 
1  Overview of main EU State aid legislation 

used in ETC programmes 

The principles of State aid are defined in the Articles 107-109 of the Treaty on 
the  Functioning  of  the  European  Union  (TFEU).  The  basic  definition  of  State 
Aid is found in Article 107 of the  TFEU, which  states;  “Any aid granted by a 
Member State or through State resources in any form whatsoever which distorts 
or  threatens  to  distort  competition  by  favouring  certain  undertakings  or  the 
production of certain goods in so far as it affects trade between Member States.” 

The challenge underlying the assessment of State aid relevance 

State aid as such is a legal matter which is based on clear principles but de facto 
is governed by a number of secondary regulations and guidelines. Practice is in 
the  end  learned  by  the  know-how  gained  in  notification  procedures  with  the 
European Commission and the decisions taken by the European Court of Justice 
(ECJ). The European Commission has a key role in reviewing existing aid and 
in deciding on plans to grant aid at the level of the Member States. 

In order to address the call for more practice-related information, the European 
Commission has launched a public consultation to specify the concept of  State 
aid  in  a  more  comprehensive  manner  seeking  to  address  a  broad  public.  The 
‘Draft  Commission  Notice  on  the  notion  of  State  aid  pursuant  to  Article 
107(1)  TFEU’  was  subject  to  a  consultation  closed  on  31  March  2014.  The 
document  contains  a  compilation  of  existing  laws  and  refers  to  the  ‘decisional 
practice’ of the Commission. 

While  the  MAs  and  Member  States  representatives  consider  the  note  to  be 
helpful, it still leaves room for interpretation and uncertainty. The document has 
not  been  approved  and  finalised  yet,  and  it  is  therefore  currently  not  legally 
binding. 

Generally speaking State aid is a field of legal expertise where experience-based 
know-how  is  particularly  important  to  take  adequate  and  proportionate 
decisions. 

The challenge in ETC 

State aid does have relevance in ETC programmes and projects more than it had 
been assumed so far. This is partly owed to the fact that: 

5 

 
 
 
 
 
 
 
 
 
  there  is  an  increasing  awareness  for  State  aid  relevance  on  the  part  of 

programme authorities; 

  many programmes entering their third or even fifth programming period 
turn  their  attention  to  projects  which  include  an  increasing  share  of 
activities that can potentially be classified as economic ones; 

  the growing interest of private actors raises the attention to the notion of 
undertakings; the programme period 2014-2020 aims to include SMEs in 
ETC. 

The tendency calls for further detailed analysis of the State aid framework. 

Compared to other types of EU-programmes, ETC programmes are challenged 
by: 

  the  fact  that  the  range  of  possible  activities  is  usually  quite  broad  and 
there are hardly any standardised project types; activities at partner level 
might be State aid relevant and since these activities are not standardised 
it  requires  often  considerable  expertise  to  assess  the  potential  State  aid 
relevance and to apply adequate provisions. 

  Funding  volumes  per  partner  are  often  rather  small  -  thus  from  the 
perspective of national State aid authorities, ETC is not a main concern. 

The access to expertise is in practice often difficult: national State aid authorities 
have limited capacities and thus it is often hard for programme authorities to get 
any advice on projects. Moreover the advice is often required on a short notice 
since  the  periods  from  the project  application  to  the  project  selection  are short 
when taking the perspective of an authority facing staff constraints. 

A  study  launched  by  the  German  Federal  Institute  BBSR  launched  in  20111 
came  to  the  following  conclusion  based  on  a  survey  among  programme 
representatives of transnational cooperation: 

  Legally binding advice is almost completely lacking. Clearer guidelines in 
terms  of  code  of  practice  are  expected,  especially  from  the  European 
Commission. 

1 Rupprecht, Werdermann 2011, p. 29. 

6 

 
 
 
 
 
 
 
 
 
 
                                           
  There are discrepancies in practice between the responsible Directorates-
General  Regional  Policy  and  Competition.  Stronger  coordination  is 
called for. 

  Regionally active programme actors and practitioners feel abandoned by 
their  national  authorities,  while  they  themselves  can  only  become  active 
in a limited way. 

A  major  point  is  the  lack  of  expertise  and  capacities  in  the  operative  units  of 
ETC programmes – this refers in particular to Interreg V-A where JS are usually 
small  in  size  compared  to  the  transnational  or  interregional  strands  and  the 
number of projects managed is often quite high. It is obvious that a large number 
of  incoming  applications  with  a  comparatively  small  financial  volume  per 
project partner are a further impediment for a thorough assessment on potential 
State aid relevance. 

Experience with external experts (legal advisers) has been mixed: 

  For  some  programmes  it  has  proven  as  a  valuable  help  in  the  period  of 
2007-13, e.g. the Central Europe programme which has subjected a large 
number of projects to a screening by external State aid experts. 

  In  other  cases  –  e.g.  in  the  Slovak-Austrian  programme  (SK-AT 
programme)  2007-13  a  pilot  for  assessment  run  by  the  MA  did  not 
provide  convincing  results;  in  the  end  ad-hoc  advice  from  the  national 
authority  in  Austria  had  been  sought;  in  the  Slovak  Republic  the 
responsible  Ministry  could  provide  in-house  experience  during  the  first 
years of programme implementation. 

Responsibilities in State aid assessment 

The detailed role and responsibilities of programme bodies and Member States – 
represented in the Monitoring Committee (MC) – needs to be decided in detail 
at  programme  level.  Granting  and  reporting  State  aid  is  ultimately  the 
responsibility of national authorities.2 In each  Member State there is a national 
body or authority and the fact that the arrangements for the effective application 
of State aid rules (mainly ensuring administrative capacity) have become part of 
the  so-called  ex-ante  conditionalities  might  improve  the  availability  and 
accessibility of such expertise for the programmes. DG Competition as a main 
repository  of  knowledge  is  in  practical  terms  hardly  accessible  to  programme 

2 Interact Q&A, 2015, p. 6. 

7 

 
 
 
 
 
 
 
                                           
bodies.  Requests  are  channelled  through  Member  States.  A  major  point  is  that 
DG Competition does not consider hypothetical cases. 

One important point is that at first, i.e. during the designation procedure3 as well 
as at a later state, i.e. when dealing with the AA, it is mainly the MA who bears 
the responsibility for a properly functioning system to check State aid relevance 
in projects. Responsibilities can be shared between Member States according to 
provisions  laid  down  either  in  the  cooperation  programme  or  in  separate 
Memoranda between the Member States. 

The MA might also have specific responsibilities in preparing options related to 
State aid relevant activities as well as in reporting. 

Key criteria related to State aid 

The level of preparedness in the programmes varies to a significant extent. The 
most  advanced  guidance  documents  have  been  found  for  Interreg  V-B 
programmes,  i.e.  the  transnational  strand.  Several  MAs  of  ETC  programmes 
provide guidance on State aid rules and possible solutions dealing with State aid 
relevant projects. 

Table 1. Key criteria related to State aid 

Criteria 
(all 5 must apply) 

Criterion satisfied in ETC 

Undertaking 
activity 

/  economic 

This is the first criterion which requires due consideration and 
the  assessment  is  not  that  easy.  The  guiding  question  is 
whether any products or services are being offered on a market. 

The  key  point  is  to  decide  whether  the  entity  carries  out  an 
economic activity in the ETC project. Undertakings are entities 
engaged in an economic activity, regardless of their legal status 
and  their  principle  aim  to  make  profit.  Economic  activity  is 
broadly  defined  as  ‘offering  goods  or  services  on  a  given 
market’  (European  Commission  2007).  It  might  be  helpful  to 
consider  whether  the  activities  could  be  implemented  by  a 
private body or in order to make profit. 

There  are  no  exhaustive  lists  either  on  economic  or  on  non-
economic  activities.  Typical  examples  of  non-economic 
activities  are  state  prerogatives  such  as  public  safety,  general 
infrastructure,  and  primary  activities  of  research  bodies  or 
education. 

3 In brief the system check done by an independent body which is a pre-condition that a ETC-programme can 
disburse ERDF to beneficiaries. 

8 

 
 
 
 
 
 
 
                                           
Transfer of state resources  Yes (up to 85% from ERDF) 

Advantage 
Does the measure confer an 
the 
advantage 
undertaking? 

on 

Selectivity 
Is the measure selective? 

This is the most difficult criterion to determine and it concerns 
whether there is a benefit that the undertaking would not gain 
under  ‘normal  market  conditions’  or  whether  it  is  relieved  of 
costs that it would normally have to meet. Where a transaction 
is  carried  out  on  market  terms  –  determined,  for  example,  on 
the basis of an open tender process – there is no advantage, and 
therefore no aid. Another option could be that the service is a 
Service  of  General  Economic  Interest  (SGEI)  meeting  the 
Altmark criteria.  

ETC programmes are by their nature selective. 

Does it have the potential to 
affect competition and trade 
between 
the  Member 
States? 
Source: Interact Q&A, 2015, Factsheet 1 – State aid in Interreg Baltic Sea Region. 

ETC programmes are not intended to have purely local effects 
thus it is always presumed yes, provided there is an advantage 

Main options to fund state-aid relevant activities in ETC 

In  ETC  projects  there  are  two  general  options  to  fund  state-aid  relevant 
activities: De minimis and the General Block Exemption Regulation (GBER). 

The  table  below  provides  an  overview  on  the  main  implications  of  these  two 
options in terms of funding from the programme. 

Table 2. State aid provisions of potential importance in ETC 

State aid legal basis 

Absolute ceiling 

Comments 

No aid (the activity is not 
economic or the support is 
not State aid relevant) 

none 

Standard co-financing rate 

De minimis (general 
regulation) 

GBER Article 20  
Aid for SMEs 
participating in ETC 
projects 

GBER – other Articles 

In general EUR 200,000 in a 3-
year period  

Standard co-financing rate of 
the Programme 

EUR 2 million per 
undertaking, per project 

50% of eligible expenditure 

Variable, depending on 
policy objective. 

Variable, depending on policy 
objective, but lower than the 
standard co-financing rate of 
the programme. 

Source: Factsheet 1 – State aid in Interreg Baltic Sea Region. 

9 

 
 
 
 
 
 
1.1 De minimis 

De  minimis  aims  to  support  economic  entities  with  comparatively  small 
amounts.  The  underlying  assumption  is  that  small  amounts  of  support  do  not 
have  a  significant  impact  on  competition  and  trade  in  the  European  Economic 
Area (EEA). De minimis is probably the preferred option in most programmes 
in the Interreg V-A, i.e. the cross-border strand where partner budget and project 
volumes are quite small and due to its relative simplicity in handling the option 
lends itself to be applied as safe option in case of doubts. 

Table 3. Specific provisions related to De minimis 

Sector 

In general 

Ceiling 

EUR 200,000 in three fiscal years per single undertaking, per 
Member State 

Freight transport 

EUR 100,000 

Fisheries and 
aquaculture4 
Agriculture5 
SGEI6 

EUR 30,000 and national capping on spending 

EUR 15,000 

EUR 500,000 for SGEI that do not clearly meet the four Altmark 
criteria- see the considerations on SGEI in section 1.3 

Source: Interact Q&A, p. 18. 

The fact that De minimis applies per Member State would allow in principle for 
a new perspective which has been labelled as proportional approach.7 It requires 
clear  reasoning  and  a  shared  view  among  the  participating  Member  States.  In 
principle two Member States cooperating in an Interreg V-A programme could 
agree  that  the  European  Regional  Development  Fund  (ERDF)  granted  to  one 
beneficiary  in  a  project  counts  for  two  Member  States:  for  example  a  grant 
amounting to EUR 200,000 to a single undertaking could count for two Member 
States, i.e. EUR 100,000 per Member States. For the undertaking it would mean 
that it had received EU 100,000 from Member States A and EUR 100,000 from 
Member  States  B.  Thus  in  accordance  with  the  principle  that  De  minimis  is 
applied  per  Member  States  the  undertaking  could  receive  further  grants.8   In 
order to allow for this approach the Member States would have to take an initial 
agreement  that  each  ERDF  contribution  is  considered  as  split  in  equal  shares 

4 Regulation (EU) No 717/2014. 
5 Regulation  (EU) No 1408/2013. 
6 Regulation (EU) No 360/2012. 
7 Cf. Interact Q&A, 2015, p. 19. 
8 E.g.  from  Member  States  A  another  grant  amounting  to  EUR  100,000  –  then  the  limit  of  EUR  200,000  for 
Member States A would have been reached; the total grant to the undertaking would amount to EUR 300,000.-; 
thereof EUR 200,000 from Member States A and EUR 100,000 from Member States B. 

10 

 
 
 
                                           
(50/50). As regards the split of shares, other options such as the relative shares 
according to the programme allocations per Member States could be considered. 

It is evident that the proportional approach to De minimis would allow de-facto 
for grants which exceed EUR 200,000 per undertaking. For obvious reasons the 
approach has raised a lot of interest among the ETC programmes and had been 
subject  to  discussion  in  the  Q&A  initiated  by  Interact.  In  its  responses  the 
Commission  has  stressed  that  the  option  is  not  in  contradiction  to  the  legal 
framework  for  De  Minimis  and  can  be  applied,  provided  that  the  participating 
Member  States  share  a  clear  reasoning,  i.e.  that  ERDF  is  considered  as  split 
according  to  shares  as  agreed  between  Member  States.  This  view  has  been 
confirmed  by  DG  Competition  since  Member  States  are  not  obliged  to  verify 
possible  De  minimis  aid  granted  in  other  Member  States.  ETC  programmes 
might apply this perspective thus making De minimis a quite attractive option. It 
is  important  to  note  that  next  to  ERDF  also  eventual  national  public  match-
funding counts for the De minimis ceiling. 

Figure 1: Proportional approach to De minimis in ETC 

Source: own considerations. 

Generally  speaking  there  is  no  standard  option  for  defining  which  Member 
States provides the De minimis support. Next to the proportional approach other 
options  would  point  to  the  Member  State  where  the  undertaking  is  located,  or 
the  Member  State  acting  as  MA  or  the  Member  State  which  is  the  seat  of  the 
Lead Partner (LP).9 

An important issue which causes problems in the implementation is the notion 
of  ‘single  undertaking’.  In  many  cases  it  is  not  clear  whether  subsidiaries  or 
departments  are  considered  as  different  entities  or  one  single  entity.  For  this 
matter  the  approach  as  defined  in  Annex  1  in  the  General  Block  Exemption 
Regulation (GBER) is useful. 

9 Cf. Interact Q&A, p. 20. 

11 

 
 
 
 
 
                                           
In  order  to  ensure  that  grants  to  a  single  undertaking  do  not  to  exceed  the 
respective ceiling there are in general two ways: 

  Member  States  organise  a  central  register  of  De  minimis  support 
containing  all  information  on  De  minimis  support  granted  by  any 
authority within the Member  States such as is the case for  CY,  CZ,  EE, 
GR,  LT,  PL,  PT,  SI  and  SK10 -  thus  it  becomes  obvious  that  these  are 
mostly  EU-12  countries  and  only  a  part  of  all  ETC  programmes  will  be 
able to count on such registers. 

  Enterprises are obliged to have their own information and are to deliver a 
self-declaration about other De minimis aid received within the three year 
period. 

In  the  case  there  is  no  such  register,  declarations  are  required  –  in  order  to  be 
presented  eventually  to  other  authorities,  these  have  to  be  issued  by  the 
programme. In practical terms either the Member States or the MA have to issue 
the  declarations  which  confirm  the  aid  granted  under  De  minimis  to  the 
undertaking.  This  should  be  done  first  during  the  contracting  phase  and 
eventually upon project end: a second declaration might have to be issued since 
the actual grant had been lower.11 

De minimis excludes the following types of activities: 

  Support  linked  to  quantities  exported,  the  development  of  an  export 

network or operating costs associated with export activity12. 

  Support which is conditional on using domestic over imported goods. 

  Support  for  acquiring  road  freight  transport  vehicles  by  undertakings  in 

the road haulage business. 

One  example  should  help  to  illustrate  the  practical  implementation  of  De 
Minimis in a cross-border programme in the period of 2007-2013. 

10 Cf. Interact Q&A, p. 22. 
11 Either due to a higher budget at the planning stage or costs declared ineligible during implementation. 
12 Cf. Interact Q&A, p. 23: examples are listed in recital 9 in Regulation (EU) 1407/2013: support which does 
not constitute export aid and thus can be granted De minimis aid includes e.g. participation in trade fairs, studies 
or consultancy services needed for the launch of a new or existing product. 

12 

 
 
 
 
 
 
 
 
 
 
                                           
In the SK-AT programme of 2007-2013 an undertaking had been procured by a 
major  Austrian  city  in  order  to  implement  so-called  eco-profit  business  plans, 
i.e.  consulting  services  supporting  SMEs  in  combining  cost-savings  and  eco-
friendly business management. 

Based on the know-how and experience gained under this longer-term contract 
the undertaking initiated a cross-border project to bring the expertise to a Slovak 
city  and  to  run  a  pilot  programme  for  Slovak  SMEs.  In  the  project  the 
undertaking  acted  as  beneficiary.  The  potential  of  market  expansion  for  the 
Austrian undertaking was evident. At the same time it was clear that without a 
pilot project and the adjustment of the approach to Slovak conditions no  Local 
and  Regional  Authorities  (LRA)  in  Slovakia  would  consider  to  run  a  similar 
programme – thus the incentive effect of the aid was also evident. Given these 
considerations, the aid was granted as De minimis to the undertaking. 

1.2 General Block Exemption Regulation (GBER) 

The  aim  of  the  General  Block  Exemption  Regulation  (GBER)  is  to  avoid  the 
need  for  notification  of  aid  to  the  European  Commission  and  its  approval  in 
advance of implementation. GBER is covering 42 categories which presume that 
specific conditions are met. Categories include for example regional aid, aid for 
research  and  development  and  innovation  and  aid  for  SMEs'  cooperation  costs 
linked  to  ETC  projects.  The  latter  was  specifically  designed  to  facilitate 
participation of SMEs in ETC projects. The GBER is particularly important to 
ETC as it permits programmes to provide aid in a transparent way without prior 
notification to the Commission. General principles governing the application of 
GBER are transparency, the incentive effect of the aid and cumulation. 

The table below lists examples which have been chosen by various programmes 
(also presented in section 2). 

Table 4. GBER – aid categories of potential relevance for ETC 
Article 
in 
GBER 

Subject 

Comment 

14 

Regional  investment  aid  for  initial 
investment; 

term 

‘initial 

The 
is 
defined  in  more  detail  in  recital  49  in 
Article 2: 

investment’ 

In  principle  it  covers  investment  and 
wage  costs.  Point  15  refers  to  ETC-
programmes; aid intensity according to 
the  regional  aid  map;  if  differences 
between regions occur the aid intensity 

it  refers  to    an  investment  in  tangible 
and  intangible  assets  related  to  the 
setting-up  of  a  new  establishment, 
extension of the capacity of an existing 

13 

 
 
 
 
 
 
 
 
Article 
in 
GBER 

Subject 

Comment 

establishment,  diversification  of  the 
output  of  an  establishment 
into 
products  not  previously  produced  in 
the  establishment  or  a  fundamental 
the  overall  production 
change 
process  of  an  existing  establishment; 
or  an  acquisition  of  assets  belonging 
to an establishment that has closed or 
would have closed  

in 

The Interact guidance from April 2015 
points  out  that:  at  this  point  the 
implications of the Article are not fully 
understood and programmes applying 
further 
should 
this  Article 
guidance.13 

seek 

A  valuable 
for  ETC-
solution 
programmes since it can be handled in 
practice  quite  easily.  Given  the  aid 
intensity  possible  for  SMEs  in  most 
parts  of  the  EU  the  aid  intensity 
offered  with  this  option  is  clearly 
attractive. 

The  activities  correspond  e.g.  to  the 
intents  of  Investment  Priority  (IP)  1b 
as 
ERDF 
in 
Regulation.14 

described 

the 

Due  to  the  collaboration  clause  the 
possible  aid  intensity,  i.e.  the  funding 
rates are quite attractive. 

the 

classification 

of 
Obviously 
activities  is  crucial  but  might  pose  a 
challenge.  It  is  important  to  note  that 
the definition of fundamental research 
in  recital  84  of  Article  2  is  quite 
restrictive: experimental or theoretical 
work  undertaken  primarily  to  acquire 
the  underlying 
new  knowledge  of 
foundations 
and 
observable  facts,  without  any  direct 
in 
commercial  application  or  use 

phenomena 

of 

of  the  region  where  major  part  of 
counts; 
expenditure 
minimum 
the 
beneficiary 25% 

contribution 

incurred 

from 

is 

20 

Aid  for  costs 
participating in ETC projects 

incurred  by  SMEs 

The  eligible  expenditure  covers  staff, 
overhead,  external  services  and  travel. 
Maximum  aid  intensity  amounts  to 
50% 

25 

Aid  for  research  and  development 
projects 

eligible 

The 
equipment, 
(contractual research), and overheads. 

cost 
external 

staff, 
services 

cover 

research 
research 

The  aid  intensity  depends  on  the 
classification of the research activities: 
(100%), 
fundamental 
industrial 
(50%), 
experimental  development  (25%);  aid 
intensity  for  the  latter  two  categories 
may be increased up to 80% in case of 
collaboration,  i.e.  in  case  of  ETC 
projects. 

Aid  intensity  for  feasibility  studies 
may amount to up to 50% 

13 Interact Q&A, 2015, p. 25. 
14 Cf. Regulation (EU) 1301/2013, Article 5. 

14 

 
 
 
 
 
 
 
                                           
Article 
in 
GBER 

Subject 

Comment 

view. 

Thus  in  the  majority  of  cases  ETC 
projects  will  tend  towards  industrial 
research or experimental development. 

The  investments  correspond  to  the 
intents  of  IP  1a  according  to  the 
ERDF-Regulation. 

is 

The  obvious  critical  point 
the 
separation  of  economic  and  non-
economic  activities  which  take  place 
in  the  new  or  upgraded  facility.  This 
might  be  difficult  in  case  of  large 
universities  or  shared  facilities  for 
applied  research.  It  is  evident  that 
to  be 
the 
preferably 
discussed 
to 
and 
since 
submission  of 
otherwise  one  has  to  expect  lengthy 
clarification 
the 
periods 
assessment phase. 

issue  has 
solved  prior 
the  project 

during 

Next to this option there exists another 
major  guidance  related  to  State  aid 
relevance  for  research  infrastructure 
which  is  set  out  in  the  following 
sections of this Study. 

possible 

activities 

clearly 
The 
correspond  to  the  intents  of  IP  6c 
which is probably the most frequently 
addressed 
the  cross-border 
strand! 

IP 

in 

the 

Implicitly 

The  crucial  point  is  that  the  Article 
requires  a  due  consideration  of 
revenues. 
required 
calculations  have  to  be  based  on  a 
sound knowledge of the sector. In case 
of  operating  aid  the  aid  amount  shall 
not  exceed  coverage  of  operating 
losses and reasonable profit over time 
–  a  fact  which  has  to  be  ensured  ex-
ante  through  projections  or  a  claw-
back mechanism. 

26 

Investment 
infrastructure 

aid 

for 

research 

Construction  of  upgrade  of  research 
facilities;  prices  charged  for  the  use 
shall  correspond  to  market  prices; 
access  shall  be  open  for  several  users 
(which should be the case in any ETC 
project). The  Regulation allows for an 
aid  intensity  up  to  50%  but  a  clear 
reasoning must be given for the shares 
of 
non-economic 
and 
activities 

economic 

53 

Aid for culture and heritage restoration 

to 

live 

that 

institutions 

The  Article  covers  a  wide  range  of 
cultural  heritage 
from 
performance 
museums 
organisations  but  also  education, 
folkloristic  costumes  and  crafts  etc. 
The eligible cost cover investment cost 
(provided 
the 
infrastructure 
is  used  for  cultural 
purposes), costs for projects, exchange 
implicitly 
and 
addressing  ETC)  but  also  operating 
cost.  Specific  provisions  refer  to  the 
publishing  of  music  and 
literature 
(either  a  funding  gap  calculation  or  a 
maximum aid intensity of 70%).   

cooperation 

(thus 

80% 

of 

15 

 
 
 
 
 
 
Article 
in 
GBER 

Subject 

Comment 

In  case  of  investment  aid  the  aid 
amount shall not exceed the difference 
between  the  eligible  cost  and  the 
operating  profit.  Operating  profit  has 
to  be  deducted  ex-ante  based  on 
projections  or  through  a  claw-back 
mechanism.  A  reasonable  profit  for 
the operator can be kept. 

For  aid  not  exceeding  1 MEUR  aid 
intensity might amount to a maximum 
of 80% of eligible cost. 

Provisions  for  the  calculation  of  the 
aid  amount  are  similar  to  those  for 
investment  aid  under  Article  53  in 
case of aid exceeding 1 MEUR. 

56 

Investment aid for local infrastructures 

infrastructure 
The  article  concerns 
that  contribute  at 
to 
level 
improving  the  business  and  consumer 
environment  and  modernising  and 
developing the industrial base 

local 

Ports and airports are excluded.  

Source: GBER, Interact Q&A 2015, own considerations. 

It is important to note that the definition of enterprise according to the GBER is 
any  legal  identity  engaged  in  an  economic  activity  irrespective  of  its  legal 
form.15 Thus also the definition of SMEs follows the criteria laid down in Annex 
1 of the GBER. 

GBER does not apply for: 

  Fisheries and aquaculture. 
  Primary agricultural production. 
  Processing and marketing of agricultural products. 
  Coalmines. 

Activities excluded are: 

  Aid  to  export-related  activities  or  contingent  on  use  of  domestic  over 

imported goods. 

15 Also definitions according to national law (e.g. for tax purposes) are irrelevant in the context of aid granted 
under the GBER. 

16 

 
 
 
 
 
 
 
 
 
                                           
  Aid available to firms subject to a recovery order16. 
  Aid to firms in difficulty. 
  Aid which entails a non-severable violation of EU law. 

Administrative requirements 

ETC programmes are free to choose the options which suit best to the intended 
projects. It is evident that the choice has to be first of all based on an agreement 
among  programme  partners,  i.e.  the  Member  States  participating  in  the 
programme.  It  is  a  decision  which  should  be  taken  under  shared  responsibility 
and thus it should be based on consensus. It is a decision which might have quite 
far-reaching consequences: if no suitable option is offered by the programme a 
project might not be eligible, or – if GBER options exist - the range of options 
has  potential  implications  on  the  funding  decision  taken  by  the  Monitoring 
Committee (MC). The actual choice for one or several options under GBER will 
most  probably  be  based  on  experiences  made  in  previous  periods.  The 
administrative pre-requirement is to inform the European Commission about the 
intent to apply one or several options and to specify the chosen options. In best 
case – from the perspective of transparency - the applicable options are set out 
in the Manuals for applicants or in the description of the conditions governing 
the Call.17 This does not necessarily have to be done during programming or at 
programme start since according to the implementing rules this can be done up 
to 20 days after the aid has been granted (i.e. the ERDF contract on the project 
has been concluded). 

The information has to be reported via the Commission’s State aid notification 
software (SANI).  This might be done at level of the Member States or it could 
be taken over by the MA responsible for the programme (upon consultation with 
the  national  State  aid  unit).  According  to  the  statement  of  a  MA  which  has 
registered  several  options  in  the  system,  the  SANI  is  focussed  on  mainstream 
programmes  and  parts  of  the  general  information  required  is  rather  difficult  to 
be provided for an ETC-programme. 

Further the information sheet generated on the programme has to be published 
on a State aid website (e.g. of the Member States where the MA is located). 

16 Deggendorf principle. 
17 The implementing provisions of programmes differ to a huge extent across the EU – but for many programmes 
the description of the conditions governing the Call is an essential document in order to safeguard transparency 
and fair access for applicants. 

17 

 
 
 
 
 
 
                                           
1.3 Considerations on specific types of infrastructure and 

services 

Research infrastructure 

As  stated  under  the  considerations  related  to  Article  26  of  the  GBER  it  is 
essential whether the institution planning to carry out the activity performs non-
economic  or  economic  activities  or  both.  In  the  latter  case  the  shares  of  non-
economic  activities  (falling  outside  the  scope  of  State  aid)  and  economic  ones 
(which are State aid relevant) is decisive. With the Framework for State aid in 
research,  development  and  innovation 18  the  Commission  has  provided  a 
reference document. The key provision is laid down in 2.1.20 in the document: 

Where  the  research  organisation  or  research  infrastructure  is  used  almost 
exclusively  for  a  non-economic  activity,  its  funding  may  fall  outside  State  aid 
rules  in  its  entirety,  provided  that  the  economic  use  remains  purely  ancillary  
[…]  the  Commission  will  consider  this  to  be  the  case  where  the  economic 
activities consume exactly the same inputs (such as material, equipment, labour 
and  fixed  capital)  as  the  non-economic  activities  and  the  capacity  allocated 
each  year  to  such  economic  activities  does  not  exceed  20  %  of  the  relevant 
entity’s overall annual capacity. 

Thus in the case of aid to research projects or infrastructure the character of the 
institution acting as partner in the ETC-project is decisive: it is obvious that in 
some  cases  such  information  or  a  convincing  statement  which  argues  and 
justifies the share of economic and non-economic activities might be difficult to 
get but such evidence can be decisive for the grant decision. 

Transport Infrastructure 

Transport  infrastructure  has  been  requested  as  specific  focus  for  this  Study.  A 
major  point  is  that  general  infrastructure  such  as  road,  cycle  paths  or  also 
railway  networks  fall  outside  the  scope  of  State  aid.  These  infrastructures  are 
also generally speaking not considered as net-revenue generating infrastructure. 

Transport infrastructure where State aid relevance has become a major point are 
in particular airports and ports. In recent years the Commission has investigated 
(corporate)  tax  exemptions  for  publicly-owned  ports  e.g.  in  BE,  NL,  FR. 
Currently the Commission is working on an extension of GBER so as to cover 

18 Communication from the Commission 2014/C 198/01. 

18 

 
 
 
 
 
 
 
                                           
non-problematic  investments  in  ports  and  foster  strategic  investments  in 
infrastructures that have the potential to create jobs in Europe.19 

In  this  context  it  is  important  to  note  that  the  services  and  infrastructures 
provided  by  a  port  are  quite  comprehensive  and  might  even  include  elements 
which  can  be  considered  as  SGEI  such  as  fire  protection  or  general  safety 
provision. 

In ETC in particular ports have acted frequently as beneficiaries in particular in 
transnational  programmes  such  as  South  East  Europe,  North  West  Europe  or 
CENTRAL. 

A major ports project in the transnational North West Europe Programme 2007-
2013 is so far the only known example where an ETC-project had undergone the 
notification  procedure,  i.e.  a  notification  of  the  project  as  State  aid  by  DG 
Competition. The project  involved  several  major  ports  in  DE,  NL,  BE  and  FR 
and  next  to  the  development  of  ICT  tools  also  development  and  testing  of 
specific infrastructure in  collaboration with freight forwarders and  distributors. 
The notification procedure was based on notable efforts of the State aid units of 
the participating Member States. 

Services of General Economic Interest SGEI 

The  term  Services  of  General  Economic  Interest  (SGEI)20 refers  to  utilities  or 
services  that  a  Member  States  considers  as  public  task  such  as  water  supply, 
waste water treatment, basic health care etc. This might at first sound a bit far-
fetched from the perspective of ETC programmes but thinking of the numbers of 
cross-border  projects  related  to  the  cooperation  of  fire  brigades  or  in  disaster 
management  or  health  care  it  is  evident  that  a  considerable  number  of  ETC-
projects targets SGEI. 

SGEI are an example where a major decision of the European Court of Justice 
(ECJ) had a major influence on the perception of the nature of services and the 
key elements to be considered. The decision of the ECJ has shaped the so-called 
Altmark criteria. If all of the four Altmark criteria are met the SGEI in question 
does not constitute State aid. 

19 Cf. European Commission press release as of 21 January 2016 -  IP/16/125. 
20 The section is based on the Interact Q&A, pp. 32-34. 

19 

 
 
 
 
 
 
 
 
                                           
Table 5. The Altmark criteria 

Criteria 

Public Service 
Obligation (PSO) 

The public service obligations have been clearly defined  

Considerations 

Transparent approach to 
compensation 

Parameters  for  the  calculation  of  the  compensation  have  been 
established beforehand in an objective and transparent manner 

No excess compensation  The compensation does not exceed what is necessary to cover the 

expenditures incurred and a reasonable profit 

Transparent calculation  

If not chosen in public procurement the level of compensation has 
to be determined based on an analysis of the costs which a typical 
undertaking  well-run  would  have  incurred  in  discharging  the 
obligation 

Source: Interact Q&A, 2015, p. 32. 

With a view to the eventual complexity of such calculations and approaches to 
determine an adequate level of compensation the De minimis for SGEI might be 
an  interesting  choice  for  programmes  (see  section  1.1).  One  has  to  see  that  – 
given  the  diverse  nature  of  services  which  could  be  considered  as  SGEI  –  the 
notion and underlying perceptions are subject to change. The concept of SGEI is 
evolving over time and there may exist considerable uncertainties in meeting the 
Altmark criteria.21 

An example from a cross-border programme in the period 2007-2013 might help 
to illustrate the potential relevance of SGEIs and State aid in ETC. 

The  project  partnership  consisted  of  two  NGOs  operating  in  the  health  care 
sector; inter alia the NGOs offer home emergency call systems in particular for 
elderly citizens. The project objective was to align the system requirements and 
to test a pilot for an advanced system which offered a higher degree of safety for 
the  users.  During  the  assessment  phase  the  JTS  consulted  the  activities  briefly 
with  the  national  State  aid  unit.  There  was  an  agreement  that  the  services 
rendered  could  be  classified  as  SGEI  meeting  the  Altmark  criteria  thus  falling 
outside  the  scope  of  State  aid.  The  project  became  part  of  a  sample  audit 
performed  by  the  AA  and  the  Authority  raised  concerns  regarding  potential 
State aid relevance. In order to defend the initial assessment the MA launched a 
request for an external State aid expert. 

Referring to the first criteria the expertise pointed out that transport services in 
health  care  are  in  general  classified  as  SGEI  and  that  the  term  SGEI  includes 
also investments. Despite the fact that the PSO did not explicitly refer to home 
emergency call systems the obligations taken over by the beneficiary in terms of 

21 Interact Q&A 2015, p. 33. 

20 

 
 
 
 
                                           
the  longer-term  operation  of  the  system  did  provide  a  strong  justification  to 
classify the services as SGEI. The expertise pointed also at the fact that the EJC 
accepts  that  also  the  general  frame  might  be  a  sufficient  justification  for  an 
SGEI  even  if  the  PSO  is  not  that  specific  in  its  formulation.  Referring  to  the 
second, third and fourth criteria major arguments derived from the fact that the 
detailed budget attached to the project plus the contractual requirement to report 
any  revenues  did  provide  sufficient  transparency  to  justify  that  the  criteria  has 
been  met.  Additionally  the  expertise  referred  to  the  Monti-package 22  which 
allowed for an even less restrictive approach to the Altmark criteria (and to the 
obligation for the notification of aid in the context of certain SGEI) for a limited 
period - being in force for the period of project implementation (i.e. linked to the 
seize  of  the  undertaking  and  the  share  of  SGEIs  rendered  as  part  of  the 
undertaking’s activities). The expertise had been acknowledged by the AA. 

1.4 Revenue generation 

In case that economic activities are relevant for  State aid the application of De 
Minimis  or  GBER  exempts  the  beneficiary  from  the  obligation  to  consider 
revenue generation. 

Activities  not  covered  by  the  De  minimis  or  GBER  generating  net-revenue 
would have to consider the aspect of revenue generation. 

Revenue-generation in ETC projects 

It is important to be aware that the concept of net-revenue generation refers to a 
specific type of operations which in a tentative first assumption has not occurred 
very frequently in ETC so far. 

The definition of net-revenues is as follows: 

Cash in-flows  directly paid by users for the goods and services provided by the 
operation, such as charges borne directly by users for the use of infrastructure, 
sale or rent of land or buildings, payments for service, less any operating costs 
and  replacement  costs  of  short-life  equipment 
the 
corresponding period.23 

incurred  during 

22 Referring to Decision 2005/842 (EC) which had been replaced by Decision 2012/21/EU. 
23 Art 61(1) of the Common Provisions Regulation; for more information see.  Delegated Reg. (EU) 480/2014, 
Art. 15 – 19. 

21 

 
 
 
 
 
 
 
 
                                           
Thus, cases to which concept applies might comprise e.g. a cross-border training 
centre  or  an  MBA  which  is  implemented  jointly  as  cooperation  of  several 
universities.24 

In the period of 2014-2020 the Commission has introduced one major change in 
the  consideration  of  projects  generating  net  revenues.  Given  all  the  problems 
related to an ex-post monitoring of revenues after project completion as foreseen 
in  the  period  2007-2013  for  this  period  it  is  intended  to  consider  to  the  extent 
possible net-revenues ex-ante. Article 61 in the Common Provision Regulation 
(CPR)  describes  the  handling  of  projects  generating  net-revenues.  In  principle 
several options for an ex-ante consideration exist: 

  A  lowered  rate  of  public  support  (application  of  a  flat  rate  net  revenue 

percentage). 

  Calculation of the discounted net revenue of the operation (also known 

as the funding gap method). 

In  principle  these  methods  cover  the  aspect  of  net-revenue  generation  for  the 
complete project life cycle, i.e. the project implementation (construction phase) 
and after completion. 

If  these  methods  cannot  be  applied  Article  61  foresees  a  provision  which  is 
obviously not attractive to any programme management, i.e. 

The net revenue generated within three years of the completion of an operation, 
or by the deadline for the submission of documents for programme closure fixed 
in the Fund-specific rules, whichever is the earlier, shall be deducted from the 
expenditure declared to the Commission. 

Revenues  which  occur  during  project  implementation  and  have  not  been 
considered  as  part  of  the  approach  to  an  ex-ante  consideration  of  net-revenues 
have to be deducted before the final payment is done.25 

The CPR also refers to projects with a total eligible cost below 1 MEUR. One of 
the  implications  of  the  exception  is  that  these  projects  are  exempt  from  the 
principle  of  deducting  the  net-revenues  ex-ante. 26  In  general,  provisions  on 
considering net revenue after completion do not apply to such projects.27 

24 In such cases the question of revenues has to be considered, however it needs to be determined whether these 
are net revenues. 
25 Cf. Article 65(8) of the CPR. 
26 Cf. INTERACT Question and Answer, INTERACT website. 
27 Cf. Article 61(7) of the CPR. 

22 

 
 
 
 
 
 
 
 
                                           
The only  real  exception  from  any  consideration  of  net  revenues  are operations 
with total eligible cost up to € 50,000.-, i.e. the Small Project Funds (SPF) which 
is a recurring element of many cross-border programmes in ETC. 

Summing up these considerations, an MA of an ETC programme has to consider 
several distinct approaches to revenue generation in projects. 

Table 6. Approaches related to revenue-generation in projects 

Case 

Project generating net-
revenues with eligible 
cost exceeding 
1 MEUR 

Approach 

Ex-ante  consideration  leading  to  lowered  support  rate  or  lowered 
grant based on the funding gap method. 

Ex-post deduction. 

Project generating net 
revenues with eligible 
cost below 1 MEUR 

For such projects net-revenues occurring during implementation do 
not  have  to  be  deducted  ex-ante  nor  is  there  the  requirement  to 
consider net revenues after completion. 

An  obvious  risk  is  that  a  project  initially  having  eligible  cost  of 
EUR 950,000 might end up with cost exceeding 1 MEUR. 

If not considered ex-ante as element of net-revenue generation such 
revenues have to be deducted. 

Projects generating 
revenues during 
implementation 

Projects with eligible 
cost up to EUR 50,000 

Revenues  need  not  to  be  considered  (in  principle  such  revenues 
could even be used as part of match-funding). 

Activities falling under 
Articles 53 or 56 of 
GBER 
Source: own considerations. 

Ex-ante  calculation  required;  details  are  set  out  in  the  respective 
Articles  of  the  GBER  but  are  in  principle  aligned  with  the 
provisions for ESIF according to CPR.  

A  case  in  a  cross-border  programme  in  the  period  2007-2013  had  been  a  very 
specific  facility  as  part  of  nature  tourism  (tree-top  walk).  Initially  it  was 
intended to apply the funding gap method: an approach which had proven to be 
very sophisticated in case of such  a rather unprecedented attraction. Obviously 
calculation models did not exist and thus in the end the MA decided to treat the 
project  according  to  provisions  of  Article  55.(4)  of  Regulation  1083/2006,  i.e. 
where, at the latest three years after closure of the operational programme, it is 
established that an operation has generated revenue that has not been taken into 
account  […]  such  revenue  shall  be  refunded  to  the  general  budget  of  the 
European Union. 

23 

 
 
 
 
 
 
 
1.5 Practical issues regarding State aid in ETC 

Most of the programmes have just started with their first calls. When screening 
the  programmes  it  shows  that  the  majority  of  programmes  still  lacks  concise 
information on the issue of State aid. A certain divide becomes visible between 
the  transnational  strand  where  several  programmes  have  already  elaborated 
already  comprehensive  guidance  and  the  cross-border  strand,  albeit  the  latter 
with notable exceptions such as the programmes AT-DE. Section 2 will present 
the state of play for selected examples of programmes. 

to  set  a  clear  path  INTERACT  puts  effort 

In  order 
in  elaborating 
comprehensive  guiding  material  related  to  State  aid  in  ETC  programmes. 
Already  in  2011  INTERACT  published  papers  regarding  the  main  problems 
occurring  in  ETC  programmes  related  to  State  aid.  According  to  INTERACT 
the main issues are28: 

  Difficulty  in  the  definition  of  economic  advantages  of  cooperation 

projects; 

  Experts opinion about State aid applications are contradictory; 

  Expertise in State aid regulation is scarce and often not available for ETC 

programmes; 

  National and regional State aid schemes are even more difficult to apply 
for ETC projects where Member States of different cooperation partners 
differ in the legislative framework; 

  Categories  such  as  service  of  general  economic  interest  are  not  clearly 

understood and often seen as economic activities; 

  According to some MAs the effort dealing with State aid does not pay off. 

The consequences resulting out of the difficulties which are still existing are that 
SMEs  are  less  eligible  and  projects  involving  State  aid  are  not  approved.  In 
cases  where  SMEs  are  eligible  De  minimis  is  automatically  applied  for. 
INTERACT  has  published  an  overview  of  the  most  common  actions  Member 
States  and  Programme  management  followed  in  the  2007-2013  programming 
period. 

28 Interact 2011, sharing expertise, State aid in European Territorial Cooperation Programmes Exemplary State 
aid cases in ETC programmes 04 July 2011. 

24 

 
 
 
 
 
 
 
 
 
 
 
                                           
Box 1. State aid in ETC programmes in 2007-2013 programming period 
  Many  ETC  programmes  eliminate  State  aid  risks  at  the  start,  either  during  project 

development or project application assessment phases. 

  State aid „gate keeper‟ conditions are written down in programme documents and aim 

at eliminating State aid risky activities at the very beginning. 

  Some  ETC  programmes  allow  private  partners  participation  in  projects  under  the 
condition  that  each  private  partner  signs  De  minimis  declaration,  which  is  then 
submitted to the programme as an obligatory part of the project application pack. Some 
ETC programmes believe that unfortunately De minimis cannot be a solution to State 
aid since some partner states do not have central De minimis registers. This makes it 
impossible  for  programme  authorities  to  carry  out  management  verifications  and 
ensure compliance with State aid rules by project partners from all partner countries. In 
this case granting funds under De minimis (also in cases that are not State aid) seems 
unfair  to  beneficiaries  as  funds  under  De  minimis  accumulate  and  beneficiaries  may 
not be able to receive additional funds from other sources. 

  Granting State aid to ETC project partners under existing national State aid schemes is 
a rare practice. Out of over 20 ETC programmes analysed, there is only one State aid 
relevant  project  which  is  implemented  in  a  CBC  programme  under  existing  national 
State aid schemes. This approach requires that both Member States have similar State 
aid  schemes  approved.  It  seems  easier  to  implement  an  ETC  project  under  existing 
national aid schemes in CBC rather than transnational programmes. 

  Granting State aid to ETC project partners under GBER is a rare practice. Out of over 
20  ETC  programmes  analysed,  there  is  only  one  State  aid  relevant  project  which  is 
being implemented by a CBC programmes under GBER. As in the previous example, 
this approach  requires  that  both  Member  States  jointly  send  information  summary  to 
the  Commission.  It  seems  easier  to  implement  an  ETC  project  under  GBER  in  CBC 
rather than transnational programmes. 

Source: INTERACT research. 

State aid in Project Cycle Management 

When  considering  the  Project  Cycle  Management  (PCM)  it  becomes  apparent 
that consideration of State aid (and also of revenue generation) goes through all 
major  stages.  The  table  below  outlines  the  major  implications  at  the  different 
stages of the PCM. 

25 

 
 
 
 
 
 
 
 
Table 7. State aid from the perspective of the PCM 

Stage 

Project generation and 
application 

Submission 

Assessment 

Selection 

Contracting 

Implementation and 
Control 

Closure 

Source: own considerations. 

Implications 

The quality of written guidance and know-how of operative staff in 
JS  and  MA  is  decisive  to  raise  awareness  for  /  to  detect  potential 
State aid relevance at an early stage. 

In general State aid is subject to the principle of transparency – thus 
options to grant aid under e.g. De Minimis or the GBER should be 
explained  and  made  public  in  the  Manuals  for  Applicants  and 
Beneficiaries. Templates for self-declarations related to De Minimis 
might also be useful at this stage. 

Related  to  revenue  generation  concise  guidance  as  well  as 
calculation sheets should be provided. 

If State aid relevance is already clear at this stage self-declarations 
might be provided in case of the application of De Minimis. 

If State aid is not clear prior to submission it is an essential part of 
the  assessment.  In  most  cases  external  advice  will  be  required  – 
thus it needs to be considered in timing as well as in terms of cost; 
it is evident that support by external experts has to be procured in a 
very cost-efficient way. 

MC should be duly informed about issues of State aid and revenue-
generation  since  the  MC  should  explicitly  decide  on  the  grant  per 
beneficiary (in terms of grant amount and funding rate). 

The  ERDF-Contract  should  make  granting  of  State  aid  clearly 
visible (e.g. on the cover  page  of the Contract) and has to include 
respective  specific  provisions  (e.g.  on  archiving  of  documents). 
Usually  the  date  of  issue  of  the  Contract  defines  the  date  for 
granting the aid. 

In  case  of  De  Minimis  the  MA  might  have  to  issue  the  official 
statement on the amount granted to the beneficiary. 

In  case  that  a  project  respectively  a  partner’s  budget  includes 
economic  and  non-economic  activities  it  must  be  clear  for  the 
designated controllers how these expenditures can be distinct from 
each other  [since  e.g. a different co-funding rate might have  to  be 
applied (GBER) or a ceiling has to be observed (De Minimis)].   

A  clear  financial  closure  statement  should  be  issued  since  e.g.  in 
case  of  De  Minimis  a  lower  amount  of  eligible  expenditure  as 
initially  planned  by  the  beneficiary  might  be  an  important 
information (if the beneficiary seeks to acquire further grants under 
De Minimis). 

26 

 
 
 
 
It becomes quite clear that with a view to State aid and revenue generation the 
essential  stages  are  the  application  as  well  as  the  assessment  stage.  At  these 
stages two basic options exist. 

Table 8. Strategic approaches of programme managements (MA, JTS) 

Strategic option 

Comment 

Foresee the option of State 
aid relevance and apply one 
of the adequate provisions  

One  of  the  major  drawbacks  is  that  programme 
managements  are  quite  often  hesitant  to  apply  such 
options due to lack of expertise  

Assessment of relevance and 
proposing modifications to 
the project design in order to 
avoid State aid relevance 
Source: own considerations 

In  many  cases  modifications  to  the  project  design 
might  be  one  of  the  options  in  order  to  avoid  the 
State aid relevance 

The latter point might deserve a few explanations. 

Avoidance of State aid 

In some cases State aid relevance can be avoided if the project approach or the 
design  or  the  character  of  activities  is  altered  at  an  early  stage.  The  following 
considerations might be helpful:29 

  Public procurement: procuring a service eliminates State aid relevance for 

the subcontractor. 

  Benchmarking: is still a tentative approach discussed in the Commission 
Notice  on  the  notion  of  State  aid  –  it  might  be  used  to  demonstrate  that 
project  partners  do  not  receive  compensation  above  market  prices.  For 
ETC  this  would  mean  to  compare  the  terms  and  conditions  of  a  service 
contract  or  purchase  contract  with  similar  transactions  carried  out  by 
private operators. If the terms and conditions (in particular the prices) in 
private  contracts  are  similar  to  the  public  funding  provided  to  ETC 
partners, the ETC funding should normally not involve any State aid.30. 

In practice the publication and dissemination of results have been considered as 
a  frequent  resort  in  order  to  avoid  State  aid  relevance.  But  this  might  not  be 
sufficient to  remove State aid  relevance since it  could be rated even  as crucial 
(economic)  marketing  activity  or  it  could  be  interpreted  as  sector  specific 
approach etc. 

29 Cf. Interact Q&A 2015, p. 12. 
30 Interact Q&A, p. 12. 

27 

 
 
 
 
 
 
 
                                           
 
2  Survey among selected programmes 

The  programme  examples  which  have  been  chosen  are  mainly  based  on  the 
availability  of  guidelines  and  elaborated  programme  documents  and  the 
willingness  to  provide  information  about  the  subject  of  State  aid.  The 
programme analysis based on interviews follows the three main questions: 

  How is the access to State aid expertise organised? 

  What are the examples of projects? 

  What  are  the  State  aid  related  provisions  of  the  programme  and  which 
templates and procedures to identify State aid relevance and/or net revenue 
generating after completion have been developed? 

The  cases  which  have  been  considered  in  the  study  differ  in  their  type  and 
territorial focus: 

Transnational programmes 

  Baltic Sea Region 
  Northern Periphery and Arctic Programme 
  North West Europe 

Cross-Border 

  Germany - The Netherlands 
  France (Channel) England Programme  
  Slovakia-Austria  

Generally speaking MAs and programme managers in JS were reluctant to speak 
about State aid. The main reason is the fact that none of the persons in charge of 
assessing projects are sure whether State aid issues have been dealt with in the 
right way. According to interviewees the decision whether a project is State aid 
relevant is  largely a matter of discretion. Thus the initial intent of the study to 
outline  in  more  detail  facts  about  project  examples  could  not  be  met.  All 
interviewees  have  requested  that  references  to  projects  are  kept  on  a  rather 
general level. 

According to programme managers in JS all projects are assessed whether they 
are  revenue  generating  and  whether  they  include  State  aid  relevant  activities. 

29 

 
 
 
 
 
 
 
 
 
 
 
Programme  managers  and  First  Level  Control  (FLC)31 as  well  as  the  AA  do 
largely share the opinion that each case  of potential State aid relevance  can be 
interpreted  in  many  different  ways.  Even  in  the  case  where  State  aid  experts 
have been involved, different opinions have been expressed. Interviewees stated 
that each project can be broken down into different activities and each level of 
analysis  leads  to  a  different  discussion  of  State  aid  relevant  aspects.  In  other 
words there is no legal security on how to assess State aid relevance in projects. 

Experts  are  often  available  but  according  to  interviewees,  their  input  does  not 
always  help  clarifying  the  maze.  In  case  of  uncertainty,  the  programme 
managers  seek  to  contact  State  aid  experts  in  the  ministries  of  the  respective 
Member  State.  However,  this  is  not  always  an  option  and  hardly  feasible  in 
cases where there are large numbers of incoming applications which need to be 
assessed.  The  INTERACT  platform  on  State  aid32 has  been  named  as  another 
source of pragmatic expertise in case of uncertainty but it is currently rather an 
instrument to share approaches and documents than to discuss and share cases. 
According  to  the  statements  of  programme  managers  the  widespread  lack  of 
experience and pragmatic know-how in programme bodies extends also to FLC 
and  AA.  One  of  the  presented  cases  points  at  the  differing  views  between 
programme  management  and  the  AA:  in  the  end  the  MA  had  to  consult  an 
external State aid expert to clarify the status of certain activities. 

The survey has shown that during the programming period 2007-2013 a frequent 
resort for handling of ‘critical’ activities had been the use of De minimis. In the 
programme period of 2014-2020, the Block Exemption Regulations (BER) offer 
a broad range of options – table 4 in section 1 includes a list of examples. The 
example of the transnational programme for the Baltic Sea Region (BSR) shows 
that  some  programmes  even  offer  a  broader  range  of  options  covering  the 
General BER, the BERs for Agriculture (ABER) as well as Fishery (FIBER). 

Several interviewees confirmed that the ‘ETC-specific’ Article 20 of GBER is in 
principle a very interesting option but they assume that the effort required in the 
assessment process will still remain considerable: one could use the Article as a 
safety or fall-back option but obviously the correct approach is to clearly discern 
economic  from  non-economic  activities.  And  it  is  the  latter  point  which 
represents the actual challenge. As a consequence it might be necessary to apply 
different  co-funding  rates  according  to  activities  –  an  evident  complication  for 
further  proceedings  in  the  verification  of  expenditures.  Summing  up  the 

31 Term referring to the bodies performing the verification of expenditures incurred in the implementation of the 
project; in ETC programmers usually organised at level of the Member States. 
32 Interact  Base  Camp  -  a  platform  where  representatives  of  ETC  programmes  are  invited  to  share  knowledge 
and documents. 

30 

 
 
 
                                           
statements  it  seems  that  no  major  simplification  is  expected  from  this  new 
option. 

In the end, the long-standing dream remains: the desirable approach would have 
been a general exemption for ETC  – however, it has become obvious that this 
objective  has  not  been  achieved.  There  are  concerns  about  a  more  rigorous 
assessment of State aid relevance in the programming period 2014-2020 by the 
European  Commission  since  the  topic  has  become  subject  to  an  intensified 
discussion. 

information  packages  on 

Currently (January 2016), there are only a few programmes that offer clear and 
comprehensive 
their  websites.  Comprehensive 
guidance  has  been  published  for  example  for  the  Interreg  V-B  (transnational) 
Programmes  Baltic  Sea  Region,  North-West  Europe,  Northern  Periphery  and 
Arctic  and  for  the  Interreg  V-A  (cross-border)  programmes  France-England 
(Channel Programme) or Austria-Germany (Bavaria). 

Examples for information provided by transnational programmes 

Generally  speaking,  transnational  programmes  are  slightly  ahead  in  terms  of 
information related to State aid issues. One of the best examples of clarity and 
transparency  seems to be the  Interreg V-B  Baltic Sea  Region programme.  The 
programme website provides comprehensive information. 

The  programme  offers  the  option  of  De  minimis  as  well  as  an  impressive 
catalogue  of  options  from  BERs  which  is  presented  in  the  table  below.  The 
Programme  foresees  a  self-declaration  of  beneficiaries  regarding  State  aid 
including e.g. also the De minimis support which they have already received in 
the  preceding  three  years:  in  the  event  of  the  project  being  supported  and  the 
occurrence of State aid relevant activities, an official Declaration is to be issued. 

Table 9. GBER options relevant for Interreg Baltic Sea Region (BSR) 

Categories 

Notification threshold 

Maximum rate of award 

GBER 

Regional aid 

GBER 

Investment aid in 

SMEs 

Varies by area: adjusted aid 
amount for a project with 
eligible investment of 
EUR 100m. 

EUR 7.5m per undertaking, 
per investment project. 

Depends on assisted area 
map and type of enterprise 

20% of eligible costs for 
small enterprises; 10% for 
medium enterprises 

31 

 
 
 
 
 
 
 
 
 
Categories 

Notification threshold 

Maximum rate of award 

GBER 

  Aid for consultancy in 

favour of SMEs 

  Aid to SMEs for 

participation in fairs 

  Aid for cooperation costs 

incurred by SMEs 
participating in ETC 
projects 

GBER 

Research, development and 
innovation 

EUR 2m per undertaking, per 
project. 

50% 

Fundamental research - EUR 
40m; Industrial research - 
EUR 20m; Experimental 
research- EUR 15; Feasibility 
studies - EUR 7.5m. 

Fundamental - 100%; 
industrial - 50%; 
experimental - 25%; 
feasibility studies - 50%. 
Higher for SMEs, 
collaboration. 

Also relevant for Fisheries 
and aquaculture eligibility. 

GBER 

Investment aid for research 
infrastructures 

EUR 20 million per 
infrastructure 

50% 

GBER 

EUR 7.5m per cluster 

50% 

Aid for innovation clusters 

GBER 

Innovation aid for SMEs 

GBER 

Aid for process and 
organisational innovation 

FIBER 

Aid for R&D in fishery and 
aquaculture 

EUR 5m per undertaking, per 
project 

50% (100% and EUR 
200,000 in three years for 
advisory services). 

EUR 7.5m per undertaking, 
per investment project 

50% for SMEs; 15% for 
large enterprises. 

Fundamental research - EUR 
40m; Industrial research - 
EUR 20m; Experimental 
research- EUR 15; Feasibility 
studies - EUR 7.5m 

Fundamental - 100%; 
industrial - 50%; 
experimental - 25%; 
feasibility studies - 50%. 
Higher for SMEs, 
collaboration. 

32 

 
 
 
 
 
 
 
 
 
 
 
Categories 

Notification threshold 

Maximum rate of award 

GBER 

Training aid 

EUR 2m per training project 

50%-70%; also relevant for 
Fisheries and aquaculture 
eligibility. 

Source: https://www.interreg-baltic.eu/for-projects/state-aid.html 

The transnational programme  North West Europe (NWE) foresees De minimis 
and  Article 20  of  the  GBER  as  key  options  for  activities  relevant  to  State  aid. 
Explanations  in  the Manual33 are brief  and  concise.  The Manual  raises  another 
important issue, namely that State aid relevant activities do not always occur at 
the level of the beneficiary but it might be handed down to recipients: 

The  project  might  also  involve  granting  State  aid  by  the  project  partners 
“downstream”  to  other  organisations.  It  means  that  the  NWE  subsidy  will  not 
be  regarded  as  State  aid,  only  the  activities  which  are  offered  by  project 
partners to undertakings. These activities might include offering free services to 
undertakings (e.g. SMEs) for which they would otherwise have to pay. In such a 
case  State  aid  will  be  deemed  to  be  granted  by  project  partners  and  project 
partners  will  be  required  to  meet  the  State  aid  requirements  (e.g.  ask  for  De 
minimis self-declarations, keep the register and inform SMEs about the amounts 
granted).34 

The Northern Periphery and Arctic Programme (NPA)35 sees its general policy 
as either ‘no State aid’ or cases where De minimis or BER36 can be taken into 
use. The Manual points at the following interesting issues: 

  Services  of  General  Economic  Interest  (SGEI):  the  differing  notion  of 
SGEI in the Member States – thus activities involving SGEI will have to 
be subject to a case-by-case analysis. 

  De minimis: It refers to the option of the so-called proportional approach 

to De minimis as explained in Section 1.1. 

  Block  Exemption  Regulation  (BER):  the  main  point  of  reference  is  the 
GBER – the Manual points out that the Articles in GBER frequently refer 
to  the eligibility  of  expenditure  and  aid  limits  –  the  reference  to  eligible 
cost may require a countercheck with the Programme Eligibility Rules. 

33 Interreg North West Europe, Programme Manual Version 1.1 as of April 7, 2015. 
34 Ibidem, p. 75. 
35 Northern Periphery and Arctic Programme, Programme Manual, Version 4, September 2015, p. 98. 
36 Including GBER, ABER or FIBER. 

33 

 
 
 
 
 
 
 
 
                                           
  Layer  of  State  aid:  it  is  also  important  to  discern  between  project 
beneficiary and end user (recipient); thus it could happen that ‘two layers’ 
of  State  aid  relevance  appear  –  e.g.  one  of  the  Articles  of  GBER  at  the 
level of the beneficiary acting as undertaking while the De minimis might 
be  used  for  end  users  (e.g.  since  no  market  price  is  being  charged  for 
services rendered to SMEs). 

Examples for information provided by cross-border programmes 

A  lot  of  cross-border  programmes  do  not  have  an  official  website  so  far  and 
detailed  provisions  for  programme  implementation  are  still  at  the  preparatory 
stage. Project calls - if any - just started and so far there are no cases available to 
establish an overview how the programmes are dealing with  State aid issues in 
this period. 

For example one of the Interreg V-A programmes does have a strong focus on 
innovation and deals mainly with private organisations. Although projects are to 
a very low percentage reporting net revenue generating, a high percentage falls 
into  State  aid  regulations  due  to  the  type  of  undertaking  and  the  intended 
activities. The critical type of activities concerns mainly pre-market research and 
product  or  process  innovation.  Therefore  the programme  has  to  offer  solutions 
for State aid issues. During the period 2007-2013 the programme managers in JS 
have gained experience in the assessment of such activities. 

The following case might serve as an illustrative insight into practice: a project 
is  developing  new  products  for  micro-  and  nano-technology  through  multiple 
clusters  companies.  This  is  done  through  research,  experimental  development, 
production  and  process  technology.  The  products  aim  to  reduce  and  integrate 
electronic, mechanical and sensory functionalities in microsystems. The project 
generates  jobs.  It  is  State  aid  relevant  due  to  the  fact  that  the  majority  of  the 
project  applicants  are  undertakings  and  activities  in  the  project  are  seemingly 
economic  (commercialisation  of  the  research  results  is  intended).  The  project 
application  will  be  assessed  and  a suitable solution  related  to  State  aid  will  be 
found together with the programme management. 

Another  cross-border  programme  has  faced  a  similar  challenge.  For  State  aid 
relevant activities the Programme offers De minimis and several options under 
GBER. In the first wave of incoming project applications those  for Investment 
Priorities (IPs) 1A and 1B37 have been ranked as those with the highest potential 
relevance for State aid. External expertise had been requested and the result of 
the  screening  has  been  presented  in  the  MC  –  thus  seeking  to  ensure 

37 According to Regulation (EU) 1301/2013, Article 5. 

34 

 
 
 
 
 
                                           
transparency  from  the  part  of  the  MA  and  at  the  same  time  providing  an 
opportunity  for  awareness-raising  and  shared  learning  in  the  MC.  The  expert 
pointed at the three guiding questions in such cases: 

1.  Does the project actually target RDTI activities? 
2.  Is  it  possible  to  make  a  clear  distinction  between  economic  and  non-

economic activities? 

3.  Can the cooperation be labelled as effective cooperation?38 

The screening of projects by the expert who has long-standing expertise on the 
field  led  to  a  differentiated  assessment  and  project-specific  advice  on  a  list  of 
issues  for  further  clarification.  The  brief  assessments  point  at  the  pre-
requirement to have a clear judgement on the type of RDTI activities involved, 
i.e.  whether  it  has  to  be  classified  as  fundamental,  industrial  or  experimental 
RDTI activity. The project-related questions raised by the expert are exemplary 
and point at the various ramifications of such assessments: e.g. in one case the 
expert  requests  a  clear  separation  between  economic  and  non-economic 
activities (related to a RDTI infrastructure targeting experimental development); 
in another case the project description fails to give a concise separation between 
the  activities  focussed  on  infrastructure  and  those  focussed  on  cooperation 
which is essential for an adequate assessment, and so forth. 

The  France  (Channel)  England  Programme  offers  guidance  on  State  aid  on  its 
website.  According  to  that  guiding  document,  there  is  a  vast  interest  in 
supporting  SMEs  –  a  fact  which  to  some  extent  increases  the  likelihood  of 
economic activities (and thus State aid relevance). 

The  chosen  approach  is  the  use  of  options  provided  under  the  GBER  and  De 
minimis.  The  JS  offers  general  advice  at  the  application  stage.  The  officials 
responsible for project appraisal are those deciding whether a project faces any 
risks  of  State  aid.  In  those  cases  where  the  appraisal  points  at  the  potential 
occurrence of economic activities, the person responsible for State aid questions 
carries  out  a  more  comprehensive  assessment  of  any  possible  State  aid 
relevance. The project selection sub-committee has the final decision about the 
project  and  whether  the  risk  of  State  aid  is  acceptable.  In  addition  the 
programme  authorities  advise  applicants  to  consult  external  advice  in  order  to 
clarify  issues  before  the  project  starts.  The  programme  provides  clear  and 
detailed  guidance  allowing  for  a  self-assessment  with  examples  of  State  aid 

38 The question refers to GBER, Article 2, Recital 90: ‘effective collaboration’ means collaboration between at 
least two independent parties to exchange knowledge or technology, or to achieve a common objective based on 
the  division  of  labour  where  the  parties  jointly  define  the  scope  of  the  collaborative  project,  contribute  to  its 
implementation  and  share  its  risks,  as  well  as  its  results.  […]  Contract  research  and  provision  of  research 
services are not considered forms of collaboration. 

35 

 
 
 
 
                                           
relevant projects. In case a project runs a risk of state, the State aid guidelines 
propose the following solutions: 

1.  Modify the project in a way to eliminate the risk of State aid 
2.  Apply  one  of  the  exemptions  according  to  GBER  (among  the  list  of 

options offered by the Programme). 

3.  Ensure  that  the  aid  granted  complies  with  the  limits  set  out  in  the  De 

minimis Regulation.39 

39 France (Channel) England Programme Guidance Note 11 State Aid. 

36 

 
 
 
                                           
3  Conclusions 

The considerations on State aid in ETC projects laid down in this Study point at 
a major challenge in terms of knowledge management. The challenge is relevant 
across all levels, i.e. from the European level over to Member States and on to 
the  level  of  the  MAs  involved  in  ETC  programmes.  The  latter  group  consists 
mainly of ministries and LRAs. The following table shows the main underlying 
challenges by level involved in knowledge management. 

Table 10. Actors involved in knowledge management  
Body 

Level 

Considerations on major challenges 

European 

ECJ 
DG Competition 
DG Regio 

State aid as a legal matter is evolving; interpretation of 
the ECJ is in the end decisive and shapes legislation; 
legislation  is  quite  comprehensive  and  rests  on 
secondary regulations and guidelines. 

Intermediary 

Interact 

National 

State aid unit 

The bodies have limited or no capacity to provide ad-
hoc advice to programmes. 

Intermediaries  seek  to  raise  awareness  among  the 
programme  bodies  and  to  foster  the  exchange  of 
information, experiences and know-how. 

These units have often a small number of persons with 
long-standing expertise (which is in the end the most 
effective  resource  for  adequate  judgements);  in  many 
cases  a  general  lack  of  staff  has  to  be  conceded; 
Compared  with  risks  in  mainstream  programmes 
(having more significant financial volumes) and more 
pressing  cases  of  special  interest  the  issues  related  to  
ETC are considered as a minor problem. 

Programme 

MA, JS, FLC, AA  Lack of experience due to small  number of cases; the 
problem  is  particularly  marked  in  case  of  the  cross-
border  strand  where  JS  are  comparatively  small, 
project volumes tend to be small and project numbers 
high (in particular in EU12/EU12 programmes). 

Source: own considerations. 

The  main  regulatory  framework  consists  of  several  documents  such  as  the  De 
Minimis Regulation. Looking at the Block Exemption Rules, besides the GBER, 
ABER 40 and  FIBER 41 might  also  be  of  interest.  Further,  the  Framework  for 
State  aid  in  research  development  and  innovation  and  the  Guide  to  the 
application  of  the  EU  rules  on  State  aid,  public  procurement  and  the  internal 

40 BER for agriculture - Regulation (EU) 702/2014. 
41 BER for fishery and aquaculture as e.g. applied in BSR - Regulation (EU) 1388/2014. 

37 

 
 
 
 
                                           
market  on  SGEI42 provides  valuable  information.  In  view  of  getting  a  detailed 
insight into State aid, a comprehensive set of documents with interlinked would 
need  to  be  studied.  Each  document  is  clear  and  concise  but  nevertheless,  the 
challenge  is  to  match  the  information  with  project  reality  and  to  put  the 
knowledge  into  practice.  When  guiding  applicants  or  when  receiving  an 
application,  in  the  end,  it  is  often  difficult  to  distil  the  decisive  (economic) 
activities and to choose the adequate provisions. 

It  is  evident  that  with  regards  to  State  aid  two  elements  related  to  knowledge 
management are of particular importance. First, the role of intermediaries such 
as Interact is crucial in order to: 

  transform  the  expert  language  into  key  questions  and  information  which 
can  be  used  for  awareness-raising  and  guidance,  as  well  as  in  order  to 
develop  a  basic  understanding  to  sort  out  critical  cases  from  a  large 
number of incoming projects; 

  develop and manage a targeted repository of information which is easily 
accessible  such  as  the  Base  Camp  on  State  aid  run  by  Interact;  it  is 
evident that considerations on cases would be very useful but, looking at 
the experience in the Consultant programme, bodies are rather hesitant to 
provide such information. 

Second, the option to have access to ad-hoc expertise at national level is crucial 
for  the  management  of  ETC  programmes.  It  is  neither  feasible  nor  efficient  to 
develop  substantial  capacities  for  the  assessment  of  State  aid  relevant  at 
programme  level.  Ideally,  the  officials  working  for  the  institution  hosting  the 
MA would have sufficient knowledge to sort out critical cases and pass them on 
to the national unit for a quick screening and decision. This way, the MA would 
be  enabled  to  take  a  substantiated  decision  based  on  an  adequate  and 
proportional  approach.  However,  this  is  currently  not  a  reality  for  many  ETC 
programmes. 

Also the fact that capacity-building related to implementation of State aid rules 
has become part of the ex-ante conditionalities might not induce a quick change 
in  the  situation  for  many  programmes.  In  fact,  sound  knowledge  management 
and capacity-building rests on effective communication at eye level and mutual 
respect  rather  than  on  the  exercising  of  control.  Open  and  shared  learning 
between MA, AA and State aid units is currently rather the exception than the 
rule. Functioning systems for the efficient and effective implementation of State 

42 Commission staff working document. 

38 

 
 
 
 
 
                                           
aid  rules  will, 
communication and interaction between the main bodies involved. 

in  many  Member  States,  require  new  approaches  for 

39 

 
 
4  References 

Interact Q&A, State Aid and European Territorial Cooperation – Questions and 
Answers, Interact 2015. 

Interreg North West Europe, Programme Manual Version 1.1 as of April 7, 2015 
Interreg  V-B,  Programme  Manual,  Northern  Periphery  and  Arctic  Programme 
2014-2020, Version 4, September 2015. 

Rupprecht  S.,  Werdermann  G.,  Public-private  partnerships  in  transnational 
cooperation  –  possibilities  and  limitations,  study  on  behalf  of  the  German 
Federal  Institute  for  Research  on  Building,  Urban  Affairs  and  Spatial 
Development (BBSR), Cologne 2011. 

41