Special Report No 24 // 2016#More efforts needed to raise awareness of and enforce compliance with State aid rules in cohesion policy #(pursuant to Article 287(4), second subparagraph, TFEU)
Date: 2016-09-07
Institutions: European Court of Auditors
Subjects: EU Member State, State aid, competition policy, control of State aid, economic and social cohesion, infringement of EU law, restriction on competition

EN 

2016 

NO 24

Special Report  More efforts needed to 
raise awareness of and 
enforce compliance with 
State aid rules in cohesion 
policy

EUROPEAN
COURT
OF AUDITORS

 
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Luxembourg: Publications Office of the European Union, 2016

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EN 

2016 

NO 24

Special Report

More efforts needed to 
raise awareness of and 
enforce compliance with 
State aid rules in cohesion 
policy

(pursuant to Article 287(4), second subparagraph, TFEU)

Audit team

02

The ECA’s special reports set out the results of its performance and compliance audits of specific budgetary areas or 
management topics. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks 
to performance or compliance, the level of income or spending involved, forthcoming developments and political 
and public interest.

This performance audit was produced by Audit Chamber II — headed by ECA Member Henri Grethen — which spe‑
cialises in investment for cohesion, growth and inclusion spending areas. The audit was led by the Reporting Mem‑
ber Oskar Herics, supported by Margit Spindelegger, Head of private office; Niels Brokopp, Principal Manager; Gert 
Rammeloo and Angelika Zych, Heads of Task; Ildiko Preiss, Attaché; Dana Moraru, Maria Ploumaki and Laura Zanarini, 
Auditors.

From left to right: A. Zych, I. Preiss, G. Rammeloo, N. Brokopp, M. Spindelegger, O. Herics.

Contents

03

Paragraph

Abbreviations

Glossary

I-VIII 

Executive summary

1-24 

3-8 

Introduction

What is State aid and what is its financial importance in the EU?

9-21 

Procedures for granting State aid

9-10 

Member States must notify State aid to the Commission

11-14 

Exemptions to notification

15-21 

Main actors involved in managing operational programmes in cohesion policy

22-24 

Audits of the European Court of Auditors and Member States’ supreme audit institutions on  
State aid

25-31  Audit scope and approach

32-113  Observations

32-82 

33-44 

45-71 

Lack of comprehensive analysis by the Commission of State aid errors and insufficient Member 
State focus on State aid

Significant number of State aid errors in the European Regional Development Fund, the Cohesion Fund and, 
to a much lesser extent, in the European Social Fund

Commission’s monitoring weakened by a lack of a comprehensive analysis and insufficient internal 
coordination

72-82 

Insufficient focus of Member States’ audit authorities on compliance with State aid rules

 
 
Contents 

04

83-113 

Commission has taken action to simplify applicable State aid legislation and to promote 
administrative capacity of Member States

84-99 

Expanded General Block Exemption Regulation leads to a shift of responsibility from the Commission to 
Member States

100-107  Newly introduced ex ante conditionalities and major project procedure may improve compliance with State 

aid rules in cohesion policy

108-113  A State aid common action plan set up by the Commission aims to strengthen the administrative capacity of 

Member States and requires continuous attention

114-130  Conclusions and recommendations

Annex I  — 

 Spending on State aid by Member State, 2010-2014, million euro

Annex II  — 

 Results of the monitoring exercises carried out by the Directorate-General for 
Competition, 2006-2014

Annex III  — 

 Major projects adopted by the Directorate-General for Regional and Urban Policy 
for the 2007-2013 programme period

Annex IV  — 

 Legal framework in the area of State aid

Reply of the Commission

 
 
 
 
 
Abbreviations

05

ACR: Annual control report

CF: Cohesion Fund

COCOF: Coordination Committee of the Funds

DG: Directorate‑General

DG COMP: Directorate‑General for Competition

DG EMPL: Directorate‑General for Employment, Social Affairs and Inclusion

DG REGIO: Directorate‑General for Regional and Urban Policy

ECN-ET: European Competition Network – Electronic Transmission

ERDF: European Regional Development Fund

ESF: European Social Fund

ESIF: European Structural and Investment Funds

GBER: General Block Exemption Regulation

GDP: Gross domestic product

ICT: Information and communications technology

IMS: Irregularity management system

IT: Information technology

JASPERS: Joint assistance to support projects in European regions

MAPAR: Management of audit processes, activities and resources

R&D: Research and development

R&D&I: Research, development and innovation

SMEs: Small and medium‑sized enterprises

TFEU: Treaty on the Functioning of the European Union

Glossary

06

Annual control reports (ACRs) are yearly reports submitted by the audit authorities which set out the findings 
of all the audits they carried out for a certain or several operational programme(s). ACRs are the main document 
by which the audit authorities provide assurance on the management and control systems of the operational 
programme(s) concerned as well as on the legality and regularity of the projects co‑financed.

An audit authority provides assurance to the Commission regarding the effective functioning of the management 
systems and internal controls for an operational programme (and, as a consequence, the legality and regularity 
of the expenditure certified). Audit authorities are generally departments within state chancelleries, at ministries 
of finance (or internal control bodies under ministry authority), at other ministries or within supreme audit 
institutions. They must be functionally independent from the bodies managing the funds. An audit authority 
reports the findings of its systems audits and audits of operations to the managing and certifying authorities for the 
operational programme concerned. Reports on systems audits and the annual control report are also submitted to 
the Commission. If the audit authority considers that the managing authority has not taken appropriate corrective 
action, it must draw the Commission’s attention to the matter.

Certifying authorities carry out first‑level checks on the expenditure declared by managing authorities and certify 
that this expenditure is legal and regular. They are generally part of the ministry of finance or internal control 
bodies under ministry authority.

The Cohesion Fund aims to improve economic and social cohesion within the European Union by financing 
environment and transport projects in Member States whose per capita GNP is less than 90 % of the EU average.

Cohesion policy is one of the biggest policy areas on which the EU budget is spent. It aims to reduce development 
disparities between different regions, restructure declining industrial areas and diversify rural areas and to 
encourage cross‑border, transnational and interregional cooperation. It is funded from the European Regional 
Development Fund, the European Social Fund and the Cohesion Fund.

The Compatibility assessment is about balancing the negative effects on trade and competition in the internal 
market from an aid measure with its positive effects in terms of contributing to the achievement of well‑defined 
objectives of common interest. Balancing these effects takes into account the impact of the aid on the social welfare 
of the EU. The compatibility assessment is the exclusive competence of the Commission.

The Coordination Committee of the Funds (COCOF) is the Committee of Member States representatives set up 
under Article 103 of Regulation (EC) No 1083/2006 to provide advice to the Commission. On the implementation of 
the ERDF, ESF and CF. COCOF guidance notes serve as recommendations with practical examples and information, 
without being legally binding or limitative.

The European Regional Development fund aims to reinforce economic and social cohesion within the European 
Union by redressing the main regional imbalances through financial support for the creation of infrastructure and 
productive job‑creating investment, mainly for businesses.

The European Social Fund aims to strengthen economic and social cohesion within the European Union by 
improving employment and job opportunities, mainly through training measures, encouraging a higher level of 
employment and the creation of more and better jobs.

Glossary 

07

The European Structural and Investment Funds (ESIF or ESI Funds) cover five separate funds that aim to reduce 
regional imbalances across the Union, with policy frameworks set for the seven‑year MFF budgetary period. The 
funds include: European Regional Development Fund (ERDF); European Social Fund (ESF); Cohesion Fund (CF); 
European Agricultural Fund for Rural Development (EAFRD); and the European Maritime and Fisheries Fund (EMFF).

The Expert group on European Structural and Investment Funds (EGESIF) was created in the Commission 
with the aim of providing advice to the Commission on issues in relation with the implementation of programmes 
adopted and implemented in accordance with the European Structural and Investment Funds Regulations. It is 
one of the two groups replacing the Coordination Committee of the Funds (the second one being COESIF – the 
Coordination Committee for European Structural and Investment Funds).

Financial corrections aim to protect the EU budget from the burden of erroneous or irregular expenditure. For 
expenditure subject to shared management, recovering payments incorrectly made is primarily the responsibility 
of Member States. Financial corrections can be made by withdrawing irregular expenditure from Member States’ 
expenditure declarations or through recoveries from beneficiaries. Financial corrections can also be imposed by the 
Commission.

A managing authority is a national, regional or local public authority, or any other public or private body, which 
has been designated by a Member State to manage an operational programme. Its tasks include selecting projects 
to be funded, monitoring how projects are implemented and reporting to the Commission on financial aspects and 
results achieved.

Major projects are projects which are so financially significant that a specific Commission decision is required for 
the Member State to obtain EU co‑financing from the European Regional Development Fund or the Cohesion Fund. 
They have a total cost exceeding 50 million euro and are generally large‑scale infrastructure projects in transport, 
environment and other sectors such as culture, education, energy or ICT.

An operational programme sets out a Member State’s priorities and specific objectives and how funding will be 
used during a given period, generally seven years, to finance projects. These projects must contribute to achieving 
one or more of a certain number of objectives specified at the level of the operational programme’s priority axis. 
Programmes have to be in place for each of the funds in the area of cohesion policy, i.e. the European Regional 
Development Fund; European Social Fund or Cohesion Fund. Operational programmes are prepared by Member 
States and must be approved by the Commission before any payments from the EU budget can be made. They can 
only be modified during the period covered if both parties agree.

Partnership agreements are agreements entered into between the European Commission and each Member State 
for the 2014‑2020 programming period. They set out the national authorities’ plans on how to use funding from 
the European Structural and Investment Funds and outline each country’s strategic goals and investment priorities, 
linking them to the overall aims of the Europe 2020 strategy for smart, sustainable, and inclusive growth. They also 
include details of any ex‑ante conditionalities and performance management frameworks. They are prepared by the 
Member State in a dialogue with the Commission and must be adopted by the Commission.

Glossary 

08

Programme period: The multi–annual framework within which cohesion policy expenditure is planned and 
implemented.

Services of general economic interest are economic activities that public authorities identify as being of 
particular importance to citizens, and that would not be supplied (or would be supplied under different conditions) 
if there were no public intervention. Examples are transport networks, postal services and social services.

Supreme audit institutions are national bodies responsible for auditing government revenue and spending.

An undertaking is any entity which engages in an economic activity, regardless of its legal status or the way it is 
financed.

Executive summary

09

I
State aid is any aid granted by a Member State which distorts or could distort competition by giving certain enter‑
prises an advantage, in‑so‑far as it affects trade between Member States. In principle, State aid is prohibited in order 
to ensure the proper functioning of the internal market. However, aid of a certain size, in certain sectors, geographi‑
cal areas or in special circumstances, may be compatible with the internal market. During the period 2010 to 2014, 
Member States have granted an average of 76.6 billion euro of State aid per year, excluding aid to the financial sec‑
tor, to the railway sector and to public services such as postal services. This corresponds to over 0.5 % of EU Member 
States’ GDP.

II
Cohesion policy is one of the main spending areas in the EU budget. For the 2014‑2020 programme period the total 
budget for the European Regional Development Fund (ERDF), the Cohesion Fund (CF) and the European Social Fund 
(ESF) amounts to 352 billion euro, up from 347 billion euro in the 2007‑2013 programme period. According to Com‑
mission estimates, ERDF/CF and ESF spending accounted for more than one‑quarter of State aid granted in the EU in 
the 2007‑2013 period. 

III
Through this audit, we assessed for the 2007‑2013 programme period the level of non‑compliance with State aid 
rules in cohesion policy and the extent to which the Commission was aware of the causes of non‑compliance. 
We also examined whether the actions undertaken by the Commission for the 2014‑2020 programme period will 
strengthen its and the Member States’ capacity to prevent, detect and correct infringements of State aid rules.

IV
Over the 2010‑2014 period, the Commission and the Court of Auditors detected infringements of State aid rules in 
a significant number of our audits; State aid errors in ERDF and CF were an important factor contributing to our esti‑
mated level of error in cohesion policy. We found that the Commission’s own audits and monitoring in the cohesion 
area resulted in a detection rate which was similar to our own findings. The audit authorities in the Member States, 
on the other hand, detected infringements of State aid rules at a far lower rate than either the Commission or us. 
This indicates that, so far, audit authorities have not focused sufficiently on State aid in the course of their audits. 

V
During the 2007‑2013 programme period the Commission did not record the State aid errors it detected or those 
reported by Member States in a way which allowed it to perform a proper analysis. Such an analysis could have 
helped the Commission to develop more focused and tailor‑made preventive measures for Member States and 
programmes.

Executive summary 

10

VI
Member States indicate in the application for projects of a significant financial size (‘major projects’) whether they 
consider that the investment involves State aid and this information can be verified by the Commission. Particularly 
in the beginning of the 2007‑2013 programme period, the Commission did not systematically verify major projects 
for State aid compliance. There is a risk that some EU co‑financed major projects are incompatible with the internal 
market, also due to the fact that prior to 2012, and the clarification provided by the Leipzig Halle judgment, Member 
States rarely notified investments in infrastructure to the Commission. In order to mitigate this risk for the future, 
the Commission stepped up its internal preventive measures and it introduced an alternative approval procedure 
including an Independent Quality Review for the 2014‑2020 programme period. This alternative procedure is not 
designed always to provide legal certainty for Member States with regard to State aid compliance at the time the 
major project decision is taken. That certainty can only be obtained on the basis of a Member State notification fol‑
lowed by a Commission State aid decision. 

VII
The Commission has taken actions to simplify the applicable State aid legislation for the 2014‑2020 programme 
period which have resulted in a reduction of administrative burden and more transparency, but have also increased 
Member States’ responsibilities for designing and implementing aid measures. Member States getting more respon‑
sibility risks increasing the number of State aid errors: the Commission’s monitoring has shown that Member States 
made many mistakes in the design and implementation of aid schemes in the 2007‑2013 programme period. To 
mitigate this risk, the Commission has taken actions to promote Member States’ administrative capacity in the area 
of State aid, including the introduction of pre‑conditions for State aid systems to promote the efficient and effec‑
tive implementation of European Structural and Investment Funds (‘ex ante conditionalities’). However, the Member 
States which were considered not to be fulfilling these conditions are not necessarily those where the Commission 
found most problems in the past. Moreover, these actions require continuous attention.

VIII
The Court recommends that:

(a)  The Commission should impose corrective actions where aid measures are not in compliance with State aid 

rules.

(b)  (i) 

 The Commission should use MAPAR to record irregularities in a way that allows easy analysis of, for exam‑
ple, their type, frequency, seriousness, geographical origin and cause. The database should equally contain 
information on the follow‑up of these irregularities (such as financial corrections imposed).

(ii)  With regard to IMS, the Commission should adapt the database’s structure so that information on irregulari‑

ties such as State aid can be extracted and analysed across Member States and type.

(iii)  DG COMP should be given access to all relevant information on State aid irregularities contained in MAPAR 

and IMS on a regular basis.

(iv)  Using the information available in its databases, the Commission should follow up every two years on 

Member States’ capacity to comply with State aid rules by carrying out analyses of, for example, the type, 
frequency, seriousness, geographical origin and cause of State aid errors detected by the Commission itself 
or by Member State authorities. The Commission should use these exercises for monitoring purposes and to 
direct support activities such as providing training to the Member States where they are most needed.

Executive summary 

11

(c)  The Commission should approve major projects only after internal State aid clearance and consistently ask 

Member States to notify aid where needed with a view to ensuring legal certainty for Member States, independ‑
ent of the application procedure used by the Member State.

(d)  (i) 

 The Commission should ensure that the scope and quality of audit authorities’ checks of compliance with 
State aid rules are sufficient. 

(ii)  In view of the closure of the 2007‑2013 programme period, the Commission should ask audit authorities to 
check the State aid compliance of those major projects that have been approved before the end of 2012.

(iii)  The Commission should develop further guidance material, including in particular case studies illustrating 

good practices and the most common types and causes of infringements of State aid rules.

(iv)  The Commission should encourage Member States to set up a central register for monitoring the cumula‑
tion of small grants which collectively are not allowed to exceed a certain amount (‘de minimis’ aid). 

(v)  The Commission should set up a central EU‑wide database in which relevant Member States authorities can 
consult the identity of undertakings subject to State aid recovery orders as well as the status of recovery 
proceedings, in order to enable them to comply with the applicable legislation (‘Deggendorf’ principle). Ac‑
cess should be granted only on a need‑to‑know basis.

(e)  If the ex ante conditionality concerning State aid is not fulfilled by the end of 2016, the Commission should 

use its powers to suspend payments to the Member States concerned until they have rectified all significant 
shortcomings.

Introduction

12

01 
Competition policy seeks to ensure that companies compete with each other on 
an equal footing – on the basis of their products and prices – without receiving 
unfair advantages. Since the EU’s single market guarantees free trade in goods 
and services across the Union, competition policy is regulated at European level1. 
State aid rules are a key aspect of the EU’s competition policy.

02 
A company which is granted State aid no longer competes on an equal foot‑
ing. For this reason, the Treaty on the Functioning of the European Union (TFEU) 
states that State aid is in principle incompatible with the internal market2. 
However, there are areas and circumstances where the market does not work as 
it should; gaps exist where certain needs are not provided for. To accommodate 
public policy goals, the Treaty provides a list of State aid categories which shall 
or may be compatible with the internal market3. The Commission has created 
several rules to govern aid granted under these categories. 

1  Article 26 of the Treaty on the 
Functioning of the European 
Union (TFEU).

2  Article 107(1) TFEU.

3  Article 107(2) TFEU : ‘The 

following shall be compatible 
with the internal market…’ (for 
example : aid to make good 
the damage caused by natural 
disasters). 
Article 107(3) TFEU : ‘The 
following may be considered 
to be compatible with the 
internal market…’ (for 
example : aid to promote 
culture and heritage 
conservation).

What is State aid and what is its financial importance 
in the EU?

03 
The Treaty defines State aid as any aid granted by a Member State which distorts 
or could distort competition by giving certain companies an advantage, provided 
that it affects trade between Member States. For aid to be considered as State 
aid, all of the criteria set out in the definition must be fulfilled. These criteria are 
listed in Table 1.

Introduction 

13

1 Criteria for characterising aid as State aid
e
l
b
a
T

Criterion and explanation

The aid is granted by the state or through state resources. ‘State resources’ are any 
resource provided by a Member State authority or an entity owned or controlled by 
the state1.

Examples

Subsidies, tax exemptions or guarantees.

The aid is granted to undertakings. An undertaking is any entity which engages 
in an economic activity, regardless of its legal status or the way it is financed2. An 
economic activity is the offering of goods or services on a market3.

A company that manufactures cars, a charity that 
supplies food or a government company that offers 
postal services.

The aid confers an advantage. An advantage is any economic benefit which the 
undertaking would not have obtained under normal market conditions4.

A loan granted to an undertaking with an interest 
rate below the market rate.

The advantage granted is selective. Any measure to grant aid that is not open to all 
undertakings operating within a Member State on an equal basis is selective.

The aid distorts or threatens to distort competition. A distortion of competition 
is assumed when the beneficiary of the aid operates in a sector where there is, or 
could be, competition5

Measures that apply only to large undertakings 
or to undertakings in a specific sector such as the 
transport or energy sector.

Aid granted to a company in the textile sector, since 
there is competition in the textile industry.

The aid affects trade between Member States. When aid distorts or threatens to dis-
tort competition, it is assumed to be liable to affect trade between Member States, 
provided that effects on other Member States are more than marginal6.

Aid granted to a local furniture manufacturer, since 
there are furniture manufacturers (local or not) in 
various EU Member States.

1

2

3

4

5

6

1  Paragraph 17 of case 248/84, paragraph 38 of case C‑482/99.
2  Paragraph 74 of joined Cases C‑180/98 to C‑184/98.
3  Paragraph 36 of case C‑35/96.
4  Paragraph 60 of case C‑39/94.
5  Paragraphs 141 to 147 of joined cases T‑298/97, T‑312/97, T‑313/97, T‑315/97, T‑600/97 to T‑607/97, T‑1/98, T‑3/98 to T‑6/98 and T‑23/98. 
6  Paragraph 81 of joined cases T‑298/97, T‑312/97, T‑313/97, T‑315/97, T‑600/97 to T‑607/97, T‑1/98, T‑3/98 to T‑6/98 and T‑23/98. 

Source: European Court of Auditors, based on the Commission’s notice on the notion of State aid.

04 
Member States spent an average of 76.6 billion euro on State aid per year in the 
2010‑2014 period4. This corresponds to over 0.5 % of EU Member States’ GDP (see 
Figure 1). The figures are understated because they do not include most aid to 
the railway sector and to services of general economic interest such as transport 
networks or postal services, for which complete data is not available for the 
2010‑2014 period. Moreover, they do not include aid granted to the financial sec‑
tor (‘crisis’ aid), which is not indicative of the amount of State aid granted under 
normal conditions and is outside the scope of this audit. An overview of State aid 
spending in each Member State in the 2010‑2014 period is presented in Annex I. 
In future years, the inclusion of more renewable energy support schemes (RES) 
in the reporting, following the adoption of the 2014 Energy and Environmental 
Aid Guidelines, may result in a further increase of reporting of State aid to the 
Commission.

4 

See the Commission’s 2015 
State aid scoreboard on DG 
COMP’s website.

 
Introduction 

14

1 State aid in the EU, 2010 to 2014
e
r
u
g
i
F

120

100

o
r
u
e
n
o
i
l
l
i

B

80

60

40

20

0

1.20 %

1.00 %

0.80 %

0.60 %

0.40 %

0.20 %

0.00 %

P
D
G
U
E

f
o
e
g
a
t
n
e
c
r
e
P

Total aid excluding crisis aid and most aid to the 
railway sector and services of general economic
interest (billion euro)

Total aid excluding crisis aid and most aid to the
railway sector and services of general economic
interest (% of EU GDP)

2010

2011

2013

2014

2012
Year

Note: According to the Commission, the increase in expenditure in 2014 is largely (85 %) due to the inclusion of more renewable energy schemes 
in the reporting. Without this inclusion, State aid reported would have amounted to around 73 billion euro in 2014. In addition, EU funds are 
included only from 2014. 

Source: European Court of Auditors, based on the Commission’s 2015 State aid scoreboard.

05 
Overall, there is a correlation between Member States’ per capita GDP and their 
spending on State aid (see Figure 2). For the 2010‑2014 period, the three Mem‑
ber States which spent most on State aid per capita on average were Denmark, 
Finland and Sweden.

 
 
 
 
 
 
Introduction 

15

2 Comparison of Member State spending on State aid and GDP per capita, 2010-2014
e
r
u
g
i
F

600

FI

)
o
r
u
e
(
a
t
i
p
a
c

i

r
e
p
g
n
d
n
e
p
s
d
i
a
e
t
a
t
S

500

400

300

200

100

0

0

DK

SV

LU

MT
SL
EL

CZ

PT

EE
SK

LV
HU

PL
LT
HR

RO

BG

IE
AT

NL

DE

BE

FR

UK

CY
ES

IT

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

GDP per capita (euro)

Source: European Court of Auditors, based on the Commission’s 2015 State aid scoreboard and Eurostat’s data on population and GDP per capita 
in current prices.

06 
Cohesion policy is one of the main spending areas in the EU budget; it is imple‑
mented through the European Regional Development Fund (ERDF), the Cohesion 
Fund (CF) and the European Social Fund (ESF). Its purpose is to support economic 
development and employment in the less advantaged regions of the EU5. The 
total EU budget for cohesion policy in the 2014‑2020 programme period is 352 
billion euro, up from 347 billion euro in the 2007‑2013 programme period6. Dur‑
ing the years 2010‑2014, 216 billion euro of EU funds was spent under cohesion 
policy7. 

5 

6 

The policy is implemented 
through operational 
programmes which set out 
priorities, specific objectives 
and how EU funding will be 
used.

See the Commission’s ‘An 
introduction to EU Cohesion 
Policy 2014‑2020’ of June 2014 
and ‘Cohesion policy 2007‑13 
Commentaries and official 
texts’ of January 2007 
respectively. A programme 
period is the multi‑annual 
framework within which 
Structural Funds and Cohesion 
Fund expenditure is planned 
and implemented.

7 

See the cohesion data portal 
on the Commission’s website.

 
 
 
 
 
 
Introduction 

07 
The allocation of cohesion policy funds is determined by taking into account 
differences in GDP levels, with poorer regions receiving higher levels of financial 
support8. As a result, these funds account for a significant share of total govern‑
ment spending in several Member States (see Figure 3). This is the case in par‑
ticular for those Member States which joined the EU in 2004 and 2007: for exam ‑
ple, the allocation of cohesion policy funds in 2014 accounted for more than 5 % 
of all government spending in Estonia, Hungary, Latvia, Lithuania and Poland. 

16

8  Article 90 of Regulation (EU) 

No 1303/2013 of the European 
Parliament and the Council of 
17 December 2013 laying 
down common provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund, the European 
Agricultural Fund for Rural 
Development, and the 
European Maritime and 
Fisheries Fund and laying 
down general provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund, the European 
Agricultural Fund for Rural 
Development, and the 
European Maritime and 
Fisheries Fund and repealing 
Council Regulation (EC) No 
1083/2006 (OJ L 347, 
20.12.2013, p. 320).

3 EU funds spent in cohesion policy by Member State, 2010-2014
e
r
u
g
i
F

12 000

PL

)
o
r
u
e
n
o
i
l
l
i

m

(
y
c
i
l
o
p
n
o
i
s
e
h
o
c
n

i

t
n
e
p
s
s
d
n
u
f
U
E

10 000

8 000

6 000

4 000

2 000

DE
IT

FR
UK

0

0 %

ES

CY

1 %

AT, BE, DK, FI, HR,
IE, LU, NL and SE

EL

SI

CZ

PT

SK

RO

MT

HU

BG

LT

LV

EE

7 %

8 %

9 %

2 %

3 %

4 %

5 %

6 %

EU funds spent in cohesion policy as % of government spending

Source: European Court of Auditors, based on Commission accounting data and Eurostat statistics on government expenditure.

 
 
 
 
 
 
 
 
 
17

9  Article 107 TFEU.

10  See the Commission’s policy 
brief on the 2014‑2020 
regional aid guidelines of 
September 2014.

11  See the Commission’s 

2011 and 2015 State aid 
scoreboard.

12  Article 108(2) and 108(3) TFEU.

13  Article 108 TFEU.

14  Council Regulation (EU) 

2015/1588 of 13 July 2015 on 
the application of Articles 107 
and 108 of the Treaty on the 
Functioning of the European 
Union to certain categories of 
horizontal State aid (OJ L 248, 
24.9.2015, p. 1) (codification) 
replacing Council Regulation 
(EC) No 994/98 of 7 May 1998 
on the application of Articles 
92 and 93 of the Treaty 
establishing the European 
Community to certain 
categories of horizontal State 
aid and in particular Article 
108(4) TFEU.

Introduction 

08 
According to the Treaty, State aid rules apply only to aid granted by Member 
States to entities carrying out an economic activity 9. Any aid granted directly by 
the Commission, or any other EU body such as the European Investment Bank, is 
therefore not subject to State aid rules. EU funding provided through cohesion 
policy is subject to State aid rules, since these funds are managed by Member 
States. The Commission estimates that during the 2007‑2013 programme period, 
around 40 % of cohesion policy funds, amounting to 139 billion euro, was award‑
ed to projects subject to State aid rules10. According to the Commission, total 
State aid spending in that period was 504 billion euro11. Overall, cohesion policy 
funds therefore accounted for more than one‑quarter of total State aid spending 
in the 2007‑2013 programme period. 

Procedures for granting State aid

Member States must notify State aid to the Commission

09 
The Treaty requires that the Commission be informed of any plans to grant or al‑
ter aid12. In practice, this means that if a Member State wants to grant State aid, it 
has to inform the Commission’s Directorate‑General for Competition (DG COMP). 
This process is called notification. 

10 
Once the Member State has notified the planned granting of aid, DG COMP 
determines whether it constitutes State aid. If it does, it assesses whether the aid 
is compatible with the internal market by weighing the positive effects of the aid 
(contribution to the achievement of a well‑defined objective of common interest) 
against its negative effects (distortion of competition and trade). The Commis‑
sion has the exclusive authority to make this compatibility assessment13.

Exemptions to notification

11 
While the Treaty in principle prohibits State aid, it also provides a list of aid cat‑
egories which may be compatible with the internal market. In this context, the 
Commission can issue rules which define criteria under which such categories of 
aid do not need to be notified14. The Commission develops these rules based on 
its experience of assessing aid measures, taking into account the case law of the 
European Court of Justice.

18

15  Commission Regulation (EU) 
No 651/2014 of 17 June 2014 
declaring certain categories of 
aid compatible with the 
internal market in application 
of Articles 107 and 108 of the 
Treaty (OJ L 187, 26.6.2014, 
p. 1).

16  The thresholds vary from 

400 000 euro for certain aid to 
start‑ups to 150 million euro 
for certain aid for renewable 
sources of energy.

17  Commission Regulation (EU) 

No 1407/2013 of 
18 December 2013 on the 
application of Articles 107 and 
108 of the Treaty on the 
Functioning of the European 
Union to de minimis aid (OJ 
L 352, 24.12.2013, p. 1).

18  Commission Regulation (EU) 
No 360/2012 of 25 April 2012 
on the application of Articles 
107 and 108 of the Treaty on 
the Functioning of the 
European Union to de minimis 
aid granted to undertakings 
providing services of general 
economic interest (OJ L 114, 
26.4.2012, p. 8).

19  Article 53 of Regulation (EU, 
Euratom) No 966/2012 of the 
European Parliament and of 
the Council of 25 October 2012 
on the financial rules 
applicable to the general 
budget of the Union and 
repealing Council Regulation 
(EC, Euratom) No 1605/2002 
(OJ L 298, 26.10.2012, p. 1).

Introduction 

General Block Exemption Regulation (GBER)

12 
For categories of aid which the Commission considers likely to be compatible 
with the internal market, it has adopted a Regulation by which such aid need 
not be notified provided that all conditions are fulfilled unless the aid amount 
exceeds the thresholds mentioned therein. This Regulation is called the General 
Block Exemption Regulation (GBER)15. Examples of such categories are State aid to 
culture and environmental protection.

13 
The GBER simplifies the work of the Commission and Member States consider‑
ably. It allows Member States to carry out many aid measures without going 
through notification procedures or the Commission’s explicit compatibility 
assessment. The GBER sets out a number of general provisions and provisions 
applicable to each category of aid. Aid which falls under the GBER and complies 
with these provisions is automatically considered to be compatible with the inter‑
nal market. Nevertheless, for large aid measures (above the notification thresh‑
olds), notification is still required due to the potential of such measures to distort 
competition16.

De minimis aid

14 
In addition, the Commission has established that aid of up to 200 000 euro 
granted to a single beneficiary over a period of three years neither distorts 
competition nor affects trade between Member States17. This type of aid is called 
‘de minimis aid’ and since it does not fulfil the State aid criterion of distorting or 
threatening to distort competition nor the one of affecting trade between Mem‑
ber States, it is not classified as State aid and does not need to be notified to DG 
COMP. For services of general economic interest, the aid threshold is increased to 
500 000 euro18.

Main actors involved in managing operational programmes 
in cohesion policy

15 
The management of ERDF/CF and ESF operational programmes is shared be‑
tween Member States and the Commission. Member States select, manage and 
monitor projects, and the Commission supervises and monitors the Member 
States’ management and control systems. The Commission bears ultimate re‑
sponsibility for the implementation of the EU budget19. 

19

20  ACRs are yearly reports 
submitted by the audit 
authorities which set out the 
findings of all the audits they 
carried out for a certain or 
several operational 
programme(s). ACRs are the 
main document by which the 
audit authorities provide 
assurance on the 
management and control 
systems of the operational 
programme(s) concerned as 
well as on the legality and 
regularity of the projects 
co‑financed.

Introduction 

Member State level

16 
At Member State level, managing authorities are responsible for the day‑to‑day 
administration of operational programmes. They must ensure, through manage‑
ment verifications, that all co‑financed projects are eligible for EU funding and 
that declared project expenditure complies with eligibility conditions, including 
compliance with State aid rules. Certifying authorities carry out checks on project 
expenditure claims received from managing authorities and submit them to the 
Commission for reimbursement. Audit authorities carry out audits of operations 
(i.e. projects) and of management and control systems and report on them to the 
Commission through annual control reports (ACRs) and audit opinions20.

17 
In addition, national State aid offices can, depending on their mandate, verify 
compliance of aid schemes at national level (whether or not EU‑co‑financed) or 
give advice or opinions to other bodies in the Member States. State aid offices ex‑
ist at central level in all Member States with the exception of Belgium, which has 
its State aid offices at regional level. In some Member States the State aid office is 
embedded in ministries for finance or economic affairs, in other Member States 
it is an independent body or embedded in the national competition authority. 
State aid offices can also act as a contact point for obtaining expert knowledge 
and help in the design of aid schemes, thereby reducing the risk of non‑compli‑
ance with State aid rules (see Box 1).

1
x
o
B

State aid screening by State aid office at the legislative proposal stage (Denmark)

All ministries are required to make an initial assessment of State aid relevance when they prepare a legislative 
proposal. This information is sent to the State aid Secretariat (staffed with State aid experts) for assessment. 
If it considers that the proposal conflicts with State aid rules, the ministry is required to redraft its legislative 
proposal. The State aid secretariat assists the ministry with suggestions and provides advice throughout the 
legislative process. 

 
20

21  For agriculture and rural 

development as well as for 
maritime affairs and fisheries, 
responsibility for State aid 
control lies with the 
Directorates‑General for 
Agriculture and Rural 
Development and for 
Maritime affairs and Fisheries 
respectively.

22  An aid scheme is an act or law 
which defines in general terms 
what kinds of beneficiary can 
receive State aid under what 
terms.

23  Article 24 of Council 

Regulation (EU) 2015/1589.

Introduction 

Commission level

18 
The Directorate‑General for Regional and Urban Policy (DG REGIO) is the Commis‑
sion department responsible for promoting economic and social development of 
the various regions of the European Union, in particular the less‑favoured ones; 
it manages the ERDF and the CF. The Directorate‑General for Employment, Social 
Affairs and Inclusion (DG EMPL) is the Commission department responsible for EU 
employment and social issues; it manages the ESF. 

19 
Both Directorates‑General draw their assurance on the compliance of ERDF/
CF and ESF expenditure with the applicable EU and national rules mainly from 
the work of the audit authorities. In addition to reviewing the work of the audit 
authorities, they also carry out their own audits of operations and systems in the 
Member States as part of their supervisory work. 

20 
DG COMP is the Commission department responsible for ensuring the correct 
application of EU State aid rules, in all areas except agriculture and fisheries21. DG 
COMP develops State aid legislation on the basis of the Treaty and oversees its 
implementation. In particular, it regularly monitors aid schemes to verify whether 
and to what extent they respect State aid rules22. In addition, interested parties 
such as a Member State or a competing company may lodge a complaint with the 
Commission if they consider aid awarded to a certain beneficiary to be unlawful. 
The Commission is obliged to examine all such complaints23. 

21 
Figure 4 gives a simplified overview of the actors involved in cohesion policy and 
the process of granting State aid. 

Introduction 

21

4 Actors involved in cohesion policy and the process of granting State aid
e
r
u
g
i
F

COHESION POLICY FRAMEWORK

LEGAL FRAMEWORK ON STATE AID

EUROPEAN
COMMISSION

DG REGIO

DG EMPL

ERDF and
Cohesion Fund

ESF

Monitor
and audit
compliance
with State aid

Supervise
and audit
compliance
with State aid

DG COMP

State aid
Regulations

Notification
through permanent
representation

Compatibility
assessment
and monitoring

MEMBER
STATES

Managing authorities

Audit authorities

National
State aid oﬃces

Advices
and opinions

Project
application

Monitor
and audit
compliance
with State aid

PROJECT
LEVEL

Beneﬁciary (e.g. company, ministry or charity)

Source: European Court of Auditors.

 
22

24  Special Report No 15/2011 ‘Do 
the Commission’s procedures 
ensure effective management 
of State aid control?’ (http://
eca.europa.eu)

25  See for example chapter 6 of 
our annual report concerning 
the financial year 2014 (OJ 
C 373, 10.11.2015).

26  Supreme audit institutions are 
national bodies responsible 
for auditing government 
revenue and spending.

Introduction 

Audits of the European Court of Auditors and Member 
States’ supreme audit institutions on State aid

22 
One of our previous special reports in 2011 identified weaknesses in Member 
States’ systems for ensuring State aid is notified, based mainly on an examination 
of a number of complaints and monitoring cases for the 2008‑2010 period24.

23 
Moreover, from 2010 to 2014, we examined the compliance with State aid rules 
for numerous ERDF/CF and ESF projects. The results of these audits formed part 
of the basis for our specific assessments for the ERDF/CF and the ESF in our an‑
nual reports25.

24 
We carried out a survey of 28 supreme audit institutions, of which 22 responded. 
Most of them stated that they included, to various degrees, checks on State aid 
as part of their audits26. Very few also performed specific audits on State aid. 

Audit scope and approach

23

25 
Over the last years we have found in our annual compliance audit exercises a sig‑
nificant number of errors concerning compliance with State aid rules in cohe‑
sion policy. This report examines whether the Commission has taken sufficient 
measures to understand why this is the case, and analyses whether the actions 
taken by the Commission will strengthen its, and the Member States’, capacity to 
prevent, detect and correct infringements of State aid rules.

26 
Through this audit, we assessed the level of non‑compliance with State aid rules 
in cohesion policy (i.e. ERDF/CF and ESF) in the 2007‑2013 programme period and 
the extent to which the Commission was aware of the causes of non‑compliance. 
Our specific analyses focused mainly on the 2010‑2014 period. We also examined 
whether the actions undertaken by the Commission for the 2014‑2020 pro‑
gramme period are likely to address non‑compliance with State aid rules. 

27 
In particular, we examined:

(a)  whether the Commission had a comprehensive and up‑to‑date overview 

of the causes of non‑compliance with State aid rules in cohesion policy, 
and whether Commission DGs and Member States detected infringements 
of State aid rules. We also examined whether the Commission’s actions in 
response to State aid errors had led to an appropriate number of corrective 
actions; and

(b)  whether the Commission had taken appropriate actions to prevent infringe‑

ments of State aid rules in cohesion policy in future.

28 
Moreover, we analysed in detail the findings of our compliance audits and used 
examples to illustrate frequent State aid errors. In addition, we examined the 
Commission’s approval procedure for certain projects of high financial signifi‑
cance (‘major projects’). 

29 
The audit consisted of documentary review (analysis for example of annual re‑
ports from audit authorities, Commission audit reports and Commission Regula‑
tions) and interviews with Commission representatives. 

Audit scope and approach 

24

30 
At Member State level we carried out two surveys:

(a)  a survey of 113 audit authorities in 28 Member States responsible for 440 

ERDF/CF and ESF 2007‑2013 operational programmes, 100 of which replied 
(88 %); and

(b)  a survey of 31 State aid offices in 28 Member States, 24 of which replied 

(77 %).

31 
Finally, we visited four Member States (Denmark, Hungary, Poland and Portugal) 
to examine a number of different State aid processes used by various authorities.

Observations

25

Lack of comprehensive analysis by the Commission of 
State aid errors and insufficient Member State focus 
on State aid 

32 
We sought to define the extent of non‑compliance with State aid rules in cohe‑
sion policy by analysing our annual compliance audits and to determine whether 
the Commission had an overview of State aid errors across Member States. If 
drawn up appropriately, such an overview would help the Commission direct its 
resources for auditing, monitoring and supporting Member States. We compared 
the detection of State aid errors by the Commission and the Member States to 
our own, and we examined the corrective actions taken by the Commission in 
response to the errors found. 

27  For more information on how 
we sample and test projects, 
see Annex 1.1, paragraphs 4‑10 
of our annual report 
concerning the financial year 
2014.

28  Having a financial impact 
means that we found 
a difference between the 
actual value of a transaction 
and the value to which it 
would have amounted if it had 
been conducted in 
accordance with applicable 
provisions. Annex 1.1 of our 
annual report for the financial 
year 2014 provides further 
details on our methodology.

Significant number of State aid errors in the European 
Regional Development Fund, the Cohesion Fund and, to 
a much lesser extent, in the European Social Fund 

Court’s audits of projects with State aid relevance

33 
In our annual compliance audits during the 2010‑2014 period, we audited 1 573 
randomly selected ERDF/CF and ESF projects27. Out of the 828 ERDF/CF projects 
220 (26.6 %) were State aid relevant. Out of the 745 ESF projects 49 (6.6 %) were 
State aid relevant. 

34 
We found a total of 50 cases of non‑compliance with State aid rules. Of these 50 
cases, 46 related to ERDF/CF projects and 4 to ESF projects. State aid errors are 
significantly less likely to occur in the ESF, mainly because projects are generally 
much smaller and more likely to be de minimis aid. 

35 
From 2010 to 2014, both the number of projects with State aid relevance and the 
share of these projects being affected by State aid errors generally increased, in‑
dicating that the controls in place to prevent these errors had not improved over 
time. The increase in errors concerned mostly those without a financial impact on 
the amount of funding of the EU budget (see Table 2)28. We found that 20.9 % of 
ERDF/CF projects with State aid relevance were affected by State aid errors. The 
corresponding figure for ESF amounted to 8.2 %.

Observations 

26

2 State aid errors detected as part of our annual compliance audits, 2010-2014
e
l
b
a
T

Fund  
(1)

Year  
(2)

Number of 
projects 
audited  
(3)

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

ERDF/CF

Total ERDF/CF

ESF

Total ESF

Total

163

168

168

168

161

828

66

166

168

175

170

745

1573

Source: European Court of Auditors.

Number of 
projects with 
State aid 
relevance  
(4)

37

43

30

51

59

220

0

8

3

14

24

49

269

%  
(4/3)

22.7 %

25.6 %

17.9 %

30.4 %

36.6 %

26.6 %

0.0 %

4.8 %

1.8 %

8.0 %

14.1 %

6.6 %

17.1 %

Number of 
State aid 
errors  
(5)

2

8

6

16

14

46

0

0

3

1

0

4

50

% 
(5/4)

5.4 %

18.6 %

20.0 %

31.4 %

23.7 %

20.9 %

0.0 %

0.0 %

100.0 %

7.1 %

0.0 %

8.2 %

18.6 %

Number of 
State aid errors 
with financial 
impact

Number of 
State aid errors 
without financial 
impact

2

4

2

5

3

16

0

0

0

0

0

0

16

0

4

4

11

11

30

0

0

3

1

0

4

34

36 
In 16 of the 50 cases of non‑compliance with State aid rules (32 %), we considered 
that the errors we found had had a financial impact on the amount of funding 
from the EU budget. All of these 16 cases related to ERDF/CF projects and were an 
important factor contributing to our estimated level of error in cohesion policy, 
particularly since 2013 (see Figure 5)29. For the 2010‑2014 period, 13.5 % of our 
average annual estimated level of error in cohesion policy was attributable to 
State aid errors30. 

29  The estimated level of error is 
a statistical estimate of the 
likely percentage of error in 
the population. See Annex 1.1 
paragraph 15 of our annual 
report on the financial year 
2014.

30 

In the period 2010‑2014, the 
average annual estimated 
level of error in cohesion 
policy was 5.7 %.

 
Observations 

27

2010-2014

5 Contribution of State aid errors to estimated level of error in cohesion policy, 
e
r
u
g
i
F

25 %

f
o
l
e
v
e
l

d
e
t
a
m

i
t
s
e
o
t
n
o
i
t
u
b

i
r
t
n
o
C

y
c
i
l
o
p
n
o
i
s
e
h
o
c
n

i

r
o
r
r
e

20 %

15 %

10 %

5 %

0 %

State aid errors

2010

2011

2012
Year

2013

2014

Note: The contribution of State aid errors to the estimated level of error for cohesion policy depends on the gravity as well as the number of State 
aid errors.

Source: European Court of Auditors.

Four main categories of State aid errors detected

37 
The State aid errors we detected as part of our annual compliance audits from 
2010‑2014 can be allocated into four categories (see Figure 6): 

(a)  Aid intensity too high;

(b)  Absence of incentive effect;

(c)  Undetected State aid or lack of notification; and 

(d)  Monitoring or formal requirements not met.

38 
Of the 16 State aid errors which had had a financial impact, 15 related to the error 
categories ‘Aid intensity too high’ and ‘Absence of incentive effect’.

 
 
 
 
 
 
 
 
 
Observations 

28

6 Nature and number of State aid errors, 2010-2014
e
r
u
g
i
F

s
r
o
r
r
e
f
o
r
e
b
m
u
N

20
18
16
14
12
10
8
6
4
2
0

Aid intensity too high

Absence of incentive
effect

Undetected State aid or
lack of notification

Monitoring or formal
requirements not met

Source: European Court of Auditors.

Nature of errors

Aid intensity too high

39 
The Commission defines aid intensity ceilings31 to limit State aid amounts to the 
minimum needed for the aided activity to take place32. In many cases (depend‑
ing, among other things, on the category of aid) the intensity ceilings can be 
increased for SMEs33. This increase is called the ‘SME bonus’. A frequent error in 
this category occurred when the managing authority treated a large company as 
an SME and granted it the SME bonus, which was ineligible (see Box 2).

With a financial impact

Without a financial impact

31 

‘Aid intensity’ means the aid 
amount expressed as 
a percentage of a project’s 
eligible costs. See for example 
Article 2(26) of Regulation (EU) 
No 651/2014.

32  See the Commission’s draft 

common principles for an 
economic assessment of the 
compatibility of State aid, 
available on DG COMP’s 
website.

33  SMEs can enjoy a higher aid 
intensity because the 
Commission considers that 
market failures such as getting 
access to finance are bigger 
for small enterprises. See the 
Commission’s handbook on 
Community State aid rules for 
SMEs of 25.2.2009.

 
 
 
Observations 

29

2
x
o
B

Example of incorrect aid intensity (Slovenia)

In an ERDF project in Slovenia examined by us as part of our 2013 annual compliance audit exercise, aid was 
granted under a notified scheme for research and development activities in the automotive industry. The ben‑
eficiary was established on the basis of a consortium agreement between nine partners, one of which was an 
SME. All other partners were large enterprises. The beneficiary received an SME bonus while carrying out its 
research activities exclusively on behalf of the large enterprises. Part of the eligible expenditure should have 
been subject to an intensity ceiling of 25 % rather than the rate of 50 % which was applied. As a result, an aid 
amount of 0.4 million euro should not have been granted. 

Absence of incentive effect

40 
State aid will be effective in achieving the desired public policy objective only 
when it has an incentive effect, i.e. when it induces the aid beneficiary to un‑
dertake activities it would not have undertaken without the aid34. Therefore, the 
beneficiary needs to demonstrate that the supported project would not have 
gone ahead without the aid. For example, under the 2008 GBER, the incentive ef‑
fect for large enterprises receiving state aid had to be demonstrated by showing 
that the aid led to a material increase in the scope, size, amount spent or speed of 
completion of the project (see Box 3)35. 

34  COM(2012) 209 final of 

8 May 2012 ‘EU State aid 
Modernisation (SAM)’.

35  Article 8(3) of Commission 

Regulation (EC) No 800/2008 
of 6 August 2008 declaring 
certain categories of aid 
compatible with the common 
market in application of 
Articles 87 and 88 of the Treaty 
(General block exemption 
Regulation) (OJ L 214, 9.8.2008, 
p. 3). This Regulation was 
preceded by Commission 
Regulation (EC) No 1628/2006 
of 24 October 2006 on the 
application of Articles 87 and 
88 of the Treaty to national 
regional investment aid.

3
x
o
B

Example of the absence of an incentive effect (Poland)

In an ERDF project in Poland for the construction of a logistics centre, examined by us as part of our 2010 
annual compliance audit exercise, the beneficiary had failed to demonstrate in its project application that 
the aid would have led to a material increase in the scope, size, amount spent or speed of completion of the 
projects, as required under 2008 GBER. As a result, the project which could have benefited from 23.2 million 
euro of EU financing was not eligible and subsequently withdrawn by the Member State. 

 
 
Observations 

30

41 
We also found cases where work had already started before the project applica‑
tion was submitted to the aid‑awarding authority. This also indicates that the aid 
was not needed to carry out the project. 

Undetected State aid or lack of notification

42 
For the error category where a managing authority had incorrectly classified aid 
to a project as not constituting State aid, or otherwise failed to notify the State 
aid to the Commission, we first considered whether the aid could have been 
exempted from notification for example under the GBER. Only if there was no 
basis for exemption did we consider the error to have had a financial impact (see 
Box 4). 

4
x
o
B

Example of a lack of notification (Czech Republic)

In an ERDF project in the Czech Republic for the construction of research infrastructure, examined by us as 
part of our 2014 annual compliance audit exercise, the managing authority did not notify the aid to the Com‑
mission, believing the project’s research activities to be of a non‑economic nature. While the beneficiary’s 
research activities were partially non‑economic, it also engaged in contractual research for a significant part 
of its activities. As a result the audited grant amounting to 1.8 million euro constituted State aid and should 
only have been granted following notification to and approval by the Commission. 

Monitoring or formal requirements not met

43 
It is important that managing authorities observe the monitoring, verification 
and other formal requirements set out for them to ensure that measures which 
constitute State aid are compatible with the internal market. These requirements 
also apply to de minimis aid (see paragraph 14). Here, the specific difficulty is that 
undertakings may receive financial aid repeatedly from multiple sources. These 
different aid grants may cumulatively exceed the de minimis ceiling. Several er‑
rors in this category concerned the failure to verify the cumulation of de minimis 
aid (see Box 5). 

 
Observations 

31

5
x
o
B

Example of monitoring or formal requirements not being met (France)

In an ERDF project in France for the construction of an industrial building, examined by us as part of our 2011 
annual compliance audit exercise, the managing authority had approved an aid award as de minimis aid. It 
had failed, however, to take into account two previous aid grants awarded to the same beneficiary within 
a three‑year period. There was no financial impact since the total amount of aid was below the de minimis 
ceiling. 

44 
Shortcomings in monitoring can however also result in aid being ineligible, if for 
example the total approved aid exceeds the de minimis ceiling. The de minimis 
Regulation provides two possibilities for monitoring de minimis aid: either a self‑
declaration by the beneficiary confirming that the aid would not result in the de 
minimis ceiling being exceeded, or by means of a central register36. Setting up 
a central register with complete information on all de minimis aid granted in the 
Member State concerned helps to prevent such errors (see Box 6). 

36  Recital 21 of Commission 

Regulation (EU) No 1407/2013.

6
x
o
B

Use of a central register for de minimis aid (Portugal)

In Portugal any de minimis aid granted needs to be entered into a central register managed by the certifying 
authority for the ERDF/CF and the ESF. The register then automatically calculates the accumulated aid granted 
to the beneficiary and indicating whether or not the de minimis ceiling has been exceeded. If the ceiling has 
been exceeded, the aid awarding body has to issue a decision of annulment and withdraw the previously re‑
corded aid from the register. The certifying authority checks twice per year that aid awards exceeding the de 
minimis ceiling have subsequently been withdrawn. 

Commission’s monitoring weakened by a lack of 
a comprehensive analysis and insufficient internal 
coordination

45 
As part of its supervisory role, the Commission undertakes various types of 
checks in relation to State aid. In cohesion policy, DG REGIO and DG EMPL under‑
take on‑the‑spot checks mainly through their audits of ERDF/CF and ESF pro‑
jects and systems; in the area of State aid DG COMP undertakes controls mainly 
through its monitoring exercise and the handling of complaints. 

 
 
Observations 

32

46 
We examined whether and to what extent the Commission had detected in‑
fringements of State aid rules, whether this information had been recorded in 
a database, analysed and shared within the Commission, and to what extent it 
took appropriate measures to correct the cases of non‑compliance with State aid 
rules detected by the Commission itself or by us.

37  DG REGIO 2014 annual activity 
report section 2.1.1 ‘Control 
effectiveness as regards 
legality and regularity’, page 
47.

DG REGIO detects a significant number of State aid errors

47 
For ERDF and CF projects, we analysed a random sample of 25 out of 131 reports 
of audits carried out by DG REGIO in 2013 and 2014. DG REGIO had selected the 
projects and programmes based on a risk assessment37. All reports concerned 
both audits of projects and systems except one report which included only au‑
dits of projects. A total of 202 projects were covered by the 25 reports. 

48 
Our analysis showed that 38 out of 202 projects had been affected by State aid 
findings. This corresponds to 19 % of all projects examined in the course of these 
25 Commission audits (see Table 3). This detection rate is similar to our own find‑
ings (see paragraph 35, Table 2). 

3 State aid findings in DG REGIO’s audits, 2013-2014
e
l
b
a
T

Number of audit 
reports 

Proportion of audit 
reports 

Number of projects 

Proportion of projects 

Without State aid findings

With State aid findings only on 
operations (projects)

With State aid findings both on 
operations (projects) and on 
systems

With State aid findings only on 
systems

Total

16

5

2

2

25

64 %

20 %

8 %

8 %

100 %

110 + 541

38

-

202

81 %

19 %

-

100 %

1   110 projects without findings covered by the 16 reports without any State aid findings, 54 projects without State aid findings spread out over 

the other 9 reports. 

Source: European Court of Auditors, based on Commission data.

 
 
33

38  Article 59 of Regulation (EU, 
Euratom) No 966/2012.

39  Financial corrections can be 
made by withdrawing 
irregular expenditure from 
Member States’ expenditure 
declarations or through 
recoveries from beneficiaries.

40  Of our 13 errors with financial 
impact, 5 led to a financial 
correction. One financial 
correction concerned one of 
our 19 errors which we had 
classified to be without 
financial impact.

Observations 

DG REGIO imposed some financial corrections for infringements of 
State aid rules in the 2010-2014 period 

49 
The Commission is obliged to take appropriate actions to correct system weak‑
nesses or errors detected at project level38. When there are serious deficiencies or 
when a Member State has failed to properly exercise its responsibility to detect 
and correct irregular expenditure, the Commission can adopt a financial correc‑
tion decision. Financial corrections aim at protecting the EU budget from the 
burden of erroneous or irregular expenditure39. 

50 
For the 2010‑2014 period, DG REGIO implemented ten financial corrections at 
least partially related to State aid following its own audits. These concerned five 
Member States (Austria, the Czech Republic, Spain, France and Romania). Six of 
these financial corrections, amounting to 3.2 million euro in total and concerning 
two Member States, were solely related to State aid (Spain and France). In addi‑
tion, DG REGIO implemented three financial corrections at least partially related 
to State aid following its review of audit authorities’ ACRs. One of these financial 
corrections, amounting to 32.5 million euro and concerning one Member State 
(Spain), was related solely to State aid. It is not possible to quantify the State aid 
component of financial corrections only partially related to State aid. No infor‑
mation was available with regard to the total number of errors or system weak‑
nesses DG REGIO detected in the 2010‑2014 period. 

51 
Two years after each of our annual compliance audit exercises, we analyse 
whether the Commission has taken appropriate and timely corrective action in 
relation to the errors we detected. DG REGIO implemented or was in the process 
of implementing five financial corrections in relation to five of our State aid er‑
rors in the 2010‑2013 period40. These financial corrections concerned four Mem‑
ber States (Spain, Greece, Austria and Poland). Four of these financial corrections, 
amounting to 2.7 million euro in total and concerning the same four Member 
States, were related solely to State aid. The Commission’s position on a proposed 
financial correction of 0.3 million euro, related to a sixth State aid error, was not 
yet finalised. 

Observations 

34

DG COMP’s State aid monitoring exercises reveal many 
problematic aid schemes

52 
The Commission is required to regularly monitor aid schemes to verify whether 
and to what extent they are in line with State aid rules, and to take appropriate 
actions in particular if any aid granted is not compatible with the internal market. 
Such actions include recovering any incompatible aid granted41. Therefore, we ex‑
amined DG COMP’s monitoring exercises’ results for the 2009‑2014 period; these 
are presented in Table 4. The Commission continues to monitor aid schemes 
previously approved42.

41  Case C‑301/87, paragraphs 

17‑23.

42  Article 108(1) TFEU: ’The 

Commission shall […] keep 
under constant review all 
systems of aid existing in […] 
[Member] States. It shall 
propose to [Member States] 
any appropriate measures 
required by the progressive 
development or by the 
functioning of the internal 
market.’

4 Results of DG COMP’s monitoring exercises, 2009-20141
e
l
b
a
T

Aid scheme

Number of schemes 
monitored

Number (and propor-
tion) of problematic 
cases3

Number (and proportion) of 
cases with problems that affect 
compatibility

Block-exempted aid

Notified aid

Other2

Services of general economic interest

Total

73

138

1

8

220

24 (32.9 %)

50 (36.2 %)

1 (100.0 %)

4 (50.0 %)

79 (35.9 %)

9 (12.3 %)

7 (5.1 %)

0 (%)

0 (%)

16 (7.3 %)

1  We include the year 2009 because the Commission’s monitoring results combine the years 2009 and 2010.

2   DG COMP found one aid scheme which was neither a GBER scheme, a ‘services of general economic interest’ scheme nor an authorised 

scheme (hence it was an illegal scheme).

3   ‘Problematic’ is a term used by DG COMP to indicate infringements of State aid rules ranging from formal shortcomings, such as incorrect 

formulations of cumulation rules, to legal issues, such as an absence of GBER conditions reflected in a GBER scheme.

Source: European Commission.

53 
We found that DG COMP had selected the aid schemes to be monitored based on 
a risk assessment and taking into account the amount of aid granted. In the 2009‑
2014 period, there were on average 2 401 aid schemes with reported expenditure 
per year. In that same period, DG COMP monitored a total of 220 aid schemes 
(between 30 and 75 aid schemes per year). DG COMP estimates that the schemes 
it monitored in the 2009‑2014 period represented over 20 % of all State aid 
granted under aid schemes. Most aid schemes run for several years and report 
expenditure on a yearly basis.

 
Observations 

35

54 
Based on its monitoring during the period from 2009 to 2014, the Commission 
found that around 36 % of all aid schemes had been affected by problems. Such 
problems concerned weaknesses in the design of aid schemes (such as unlaw‑
ful exemptions of incentive effect rules or missing provisions with regard to aid 
intensity ceilings) or in the implementation of individual aid (such as unlawful 
breaches of the notification obligation for individual aid exceeding the GBER 
thresholds or aid being granted to large enterprises while the aid scheme was 
limited to SMEs)43. Problems which affected compatibility (7.3 % of all cases) are 
particularly significant. In these cases the Commission can proceed to the recov‑
ery of aid. Problems affecting compatibility were particularly frequent in GBER 
schemes (12.3 % of all GBER cases). 

43 

Individual aid is any aid 
granted under or outside of an 
aid scheme. DG COMP did not 
monitor individual aid granted 
outside of an aid scheme 
before 2015.

44  Four recoveries in 2009, one in 

2011, one in 2012 and 
2 in 2014.

45  See Commission decision 
C(2014) 9362 of 9.1.2015.

55 
More detailed information broken down by Member State and by category of aid 
and covering the 2006‑2014 period is presented in Annex II, which shows that 
for five Member States (Greece, Lithuania, Luxembourg, Portugal and the United 
Kingdom) DG COMP considered half or more of all aid schemes to be problem‑
atic. While the results of DG COMP’s monitoring exercise are not specific to cohe‑
sion policy, Annex II shows that regional development is the category of aid most 
often subject to DG COMP’s monitoring.

DG COMP’s monitoring exercises in the 2009-2014 period did not 
result in significant recoveries of State aid 

56 
During the 2009‑2014 period, the Commission’s State aid monitoring resulted 
in eight voluntary recoveries of irregular expenditure from beneficiaries by the 
Member States concerned44. In addition, the Commission launched eight formal 
actions such as investigation procedures. One of these, launched in 2014 against 
Cyprus, led to the recovery in 2015 of 0.3 million euro related to a measure incor‑
rectly exempted under the GBER45. 

36

46  Article 28 of Commission 

Regulation (EC) No 1828/2006 
of 8 December 2006 setting 
out rules for the 
implementation of Council 
Regulation (EC) No 1083/2006 
laying down general 
provisions on the European 
Regional Development Fund, 
the European Social Fund and 
the Cohesion Fund and of 
Regulation (EC) No 1080/2006 
of the European Parliament 
and of the Council on the 
European Regional 
Development Fund (2007‑2013 
programme period) (OJ L 371, 
27.12.2006, p. 1) and 
Commission Delegated 
Regulation (EU) 2015/1970 of 
8 July 2015 supplementing 
Regulation (EU) No 1303/2013 
of the European Parliament 
and of the Council with 
specific provisions on the 
reporting of irregularities 
concerning the European 
Regional Development Fund, 
the European Social Fund, the 
Cohesion Fund, and the 
European Maritime and 
Fisheries Fund (2014‑2020 
programme period) (OJ L 293, 
10.11.2015, p. 1).

Observations 

For the 2007-2013 programme period, the Commission’s databases 
did not allow the analysis of State aid errors 

57 
For the 2007‑2013 programme period, neither DG REGIO nor DG EMPL recorded 
cases of non‑compliance with State aid rules it detected in a way which allowed 
them to perform a proper analysis of State aid errors. For the 2014‑2020 pro‑
gramme period, they developed a database called ‘MAPAR’ (Management of Au‑
dit Processes, Activities and Resources) to record all findings resulting from their 
audits for the ERDF, CF and ESF classified by type, category and seriousness. State 
aid errors form a separate category in this database. We found, however, that DG 
COMP did not have access to MAPAR. 

58 
Another database, managed by OLAF and accessible by DG REGIO and DG EMPL 
but not by DG COMP, is the Irregularity Management System (IMS), which is used 
by the Commission to collect information from the Member States on a quarterly 
basis about all irregularities exceeding 10 000 euro in EU contributions46. During 
the period 2010 to 2014, 31 irregularities related to State aid were reported by 
Member States. Although there were only a small number of irregularities, the 
Commission did not analyse them. 

59 
We identified the following shortcomings in the way the information on irregu‑
larities in IMS was presented:

(a)  there was no specific error typology for State aid and therefore no consist‑

ency in the categorisation of errors between Member States. State aid errors 
would have had to be extracted by searching for ‘State aid’ in all official 
languages; and

(b)  in many cases the information submitted does not detail the nature or type 
of the errors. For example, a State aid error might be described only as 
a ‘State aid issue’.

Observations 

37

60 
While DG COMP did not have a database either, for the 2007‑2013 programme 
period it made a horizontal analysis of the problems detected in its monitoring 
exercises by means of an Excel spreadsheet. It did not share this information with 
DG REGIO or DG EMPL. In March 2016, DG COMP started to do so. 

61 
The absence of robust databases and the insufficient exchange of information on 
detected State aid errors between the Commission DGs prevented a comprehen‑
sive analysis of State aid errors in cohesion. Such an analysis could have helped 
the Commission to develop more focused and tailor‑made preventive measures 
for Member States and/or programmes (see e.g. paragraphs 101 to 105).

47  See paragraph 12 of 

Application of articles 92 and 
93 of the EC Treaty and Article 
61 of the EEA Agreement to 
State aids in the aviation 
sector (OJ C 350, 10.12.1994).

48  See paragraph 12 of 

‘Application of Articles 92 and 
93 of the EC Treaty and Article 
61 of the EEA Agreement to 
State aids in the aviation 
sector’ (OJ C 350, 10.12.1994, 
p. 5).

49  See COM(96) 126 Final 
paragraph 175 and 
Vademecum Community 
Rules on State Aid, pages 6 
and 10.

The Commission stepped up State aid controls of public 
infrastructure projects following a 2011 Court of Justice ruling

62 
In 1994, the Commission issued guidelines which specified that the construction 
of public infrastructure projects represented a general measure of economic 
policy which was not subject to the rules on State aid47. The public financing 
of investments in airports, ports or similar public infrastructure were thus not 
notified by Member States to the Commission. In those guidelines, however, the 
Commission already indicated that economic activities carried out inside airports 
which directly or indirectly benefit airlines could be considered State aid48. This 
distinction between ‘public’ infrastructure and ‘dedicated’ infrastructure was 
made in the 1995 Annual Competition report and later in the Commission’s 2003 
Vademecum on State aid49. However, this Vademecum stated that the general 
State aid rules did not apply, in particular, to rail, air, inland waterways and mari‑
time transport. During the 1990s, several factors such as market liberalisation, 
privatisation and technological progress contributed to increase the scope for 
the commercial exploitation of infrastructure. From 1998 onwards, and in accord‑
ance with this interpretation, the Commission considered aid awarded to several 
public infrastructure projects to be State aid.

63 
The European Court of Justice issued rulings in 2000 and in 2011 which confirmed 
the view that the public financing of infrastructure investments can have State 
aid relevance (see Box 7).

Observations 

38

7
x
o
B

Two important Court of Justice judgments relating to public infrastructure 
projects’ compliance with State aid rules

In the ‘Aéroports de Paris’ judgment, the General Court ruled in December 2000 that the operation of an 
airport, including the provision of airport services to airlines and service providers within airports, is an eco‑
nomic activity and thus subject to State aid rules50

In the ‘Leipzig Halle’ judgment, the General Court ruled in March 2011 that if the construction of infrastructure 
(for example, a runway) is inseparably linked to an economic activity (for example, transporting passengers by 
aeroplane), the construction itself is an economic activity51.

50  Case T‑128/98, Aéroports de Paris.

51  Joined cases T‑443/08 and T‑445/08, Leipzig Halle.

64 
In August 2012, DG COMP issued guidance documents (referred to as ‘analyti‑
cal grids’) to help Member States assess whether aid granted to infrastructure 
projects should be notified to the Commission, based on the ‘Leipzig Halle’ 
judgment.

65 
It was only following the ‘Leipzig Halle’ judgment and the 2012 Commission guid‑
ance to the Member States that the number of notifications of infrastructure pro‑
jects increased52. In 2014, referring to the ‘Aéroports de Paris’ and ‘Leipzig Halle’ 
judgments, the Commission expressed the view that the Court rulings would be 
‘applicable to any infrastructure operated for an economic activity’, regardless of 
the sector concerned53.

52  For example, DG COMP stated 

in the letter ‘State aid 
Questionnaire on the 
functioning and the taxation 
of ports’ of 3 July 2013 that: 
‘Following the Leipzig/Halle 
judgment of the European 
Court of Justice the European 
Commission received an 
increasing number of 
notification of port 
infrastructure investment 
projects involving public 
support.’ See COMP/E3/H3/IA/
jf/20 13/68609.

53  Paragraph 35 of the draft 
Commission notice on the 
notion of State aid pursuant to 
Article 107(1) TFEU, published 
in 2014. The notice was 
adopted on 19 May 2016 
(http://ec.europa.eu/
competition/state_aid/
modernisation/notice_aid_
en.html) which includes 
a similar wording.

 
Observations 

39

Inadequate coordination between Commission DGs to ensure that 
major project decisions also take account of State aid rules until 
the end of 2012

66 
Some ERDF/CF projects are so financially significant that a specific Commission 
decision is required for the Member State to obtain EU co‑financing. They have 
a total eligible cost exceeding 50 million euro, and are generally large‑scale 
infrastructure projects54. These projects are called major projects. If aid granted 
to a major project constitutes State aid, it is also likely that it needs to be notified 
due to its size55. 

67 
For the 2007‑2013 programme period, the Commission adopted 918 major pro‑
ject decisions representing over 75 billion euro of EU contributions; the average 
EU contribution to these projects was 82.6 million euro. Together these projects 
accounted for more than 25 % of all ERDF/CF spending, with significant differ‑
ences between Member States (see Figure 7). 

68 
More detailed information on major projects adopted by the Commission for the 
2007‑2013 programme period is presented in Annex III.

54  For certain projects, the 

threshold is 75 million euro. 
See Article 100 of Regulation 
No 1303/2013.

55  The only categories of aid 
under the GBER with 
notification thresholds 
exceeding 50 million euro are 
regional investment aid, 
investment aid for culture and 
heritage conservation and aid 
for broadband infrastructure 
as well as, under certain 
conditions, aid for research 
and development and 
operating aid for renewable 
sources of energy. 
The notification threshold for 
services of general economic 
interest is 15 million euro. 
Article 4 of Regulation 
651/2014 and Article 2 of 
Commission Decision of 
20 December 2011 on the 
application of Article 106(2) of 
the Treaty on the Functioning 
of the European Union to State 
aid in the form of public 
service compensation granted 
to certain undertakings 
entrusted with the operation 
of services of general 
economic interest.

Observations 

40

Member State 

7 EU contributions to major projects as a proportion of all ERDF/CF spending by 
e
r
u
g
i
F

Administrative boundaries: © EuroGeographics © UN-FAO © Turkstat

Cartography: Eurostat — GISCO, 01/2015

0

200

400

600

800 km

Legend

0 - 12.5 %

12.5 - 25 %

25-37.5 %

37.5-50 %

50+ %

No major projetcs

Not an EU country

Source: European Court of Auditors, based on 2015 Commission data.

 
 
Observations 

41

69 
Member States are required to include various kinds of information in a major 
project application to allow the Commission to make a reasoned decision based 
on an assessment of the project’s relevance, viability, sustainability, environmen‑
tal profile and justification of requested funding as well as information provided 
by the Member State on whether State aid is involved. According to the Com‑
mission, since the end of 2012 DG REGIO formally consults DG COMP on all major 
project applications as part of its internal procedures, at which stage DG COMP 
may indicate to DG REGIO that the project should be notified. Furthermore, DG 
REGIO as the lead DG must consult DG COMP and other relevant DGs on the ma‑
jor project approval decision56. 

56  All relevant Commission 

departments shall have 10 to 
15 working days for their 
assessment of the project 
application as well as for their 
assessment of the major 
project approval decision.

57  European Commission; 

Guidance Note to the COCOF 
No 12‑0059‑01 ‘Verification of 
compliance with state aid 
rules in infrastructure cases’; 
21 November 2012.

70 
This consultation is especially important when the Member States indicate in 
the major project application that State aid is not involved, since in this case 
DG COMP does not receive a notification. But even if the Commission approves 
a major project by taking a decision, there is no guarantee that the project com‑
plies with State aid rules. An analysis of Commission decisions for major projects 
showed that there was no mention that the decision did not constitute confirma‑
tion of the projects’ compliance with the applicable State aid legislation.

71 
Of the 918 major projects adopted for the 2007‑2013 programme period, the 
Commission adopted 440 before the end of 2012. For these projects DG COMP 
did not systematically verify whether the investments in public infrastructure 
might involve State aid. Moreover, in November 2012, the Commission issued 
a guidance note to Member States, stating that it did ‘not intend to examine 
systematically compliance with the State aid rules of major infrastructure projects 
covered by this note which have already been subject of a decision […] before 
the date of this note’57. In principle, it is thus possible for a Member State to have 
received a Commission decision approving a major project while being in breach 
of State aid rules. 

Observations 

42

Insufficient focus of Member States’ audit authorities on 
compliance with State aid rules

72 
Member States’ audit authorities are an important part of the control chain on 
which the Commission builds its assurance in cohesion policy. It is therefore 
important that the audit authorities have the necessary expertise and perform 
checks of an appropriate quality. This is particularly important for checking com‑
pliance with State aid rules, which are an important source of errors and irregular 
expenditure in cohesion policy, though much less so for the ESF than for the 
ERDF and the CF (see paragraphs 33 to 36).

58  As a general rule, audit 

authorities are required to 
sample projects randomly. See 
Article 17 of Commission 
Regulation (EC) No 1828/2006 
for the 2007‑2013 programme 
period and Article 127 
Regulation (EU) No 1303/2013 
for the 2014‑2020 programme 
period.

73 
We asked audit authorities for their audit results related to State aid through 
our survey and examined the reporting of State aid errors in their annual con‑
trol reports (ACRs) for ERDF/CF operational programmes. As part of our annual 
compliance audits, we reviewed the audit authorities’ checklists for auditing 
compliance with State aid rules. We also asked the audit authorities whether they 
had received sufficient support from the Commission and how frequently they 
cooperated with other Member State authorities (such as State aid offices) in the 
area of State aid. 

Audit authorities detected significantly fewer cases of non-
compliance with State aid rules than the Commission or the Court

74 
During the 2010‑2014 period, based on information provided in the survey, audit 
authorities estimated that around a third (32.4 %) of the ERDF/CF and ESF projects 
audited by them had been State aid relevant. Audit authorities found State aid 
errors on average in 3.6 % of those projects (see Figure 8). Over that same period, 
we detected State aid errors in ERDF/CF and ESF projects at more than five times 
this rate (see paragraph 35, Table 2), even though we have a similar sampling 
methodology58.

Observations 

43

8 State aid in audit authorities’ audits of projects, 2010-2014
e
r
u
g
i
F

40 %

40 %

35 %

35 %

t
c
e
j
b
u
s

s
t
c
e
j
o
r
p

l
l
a
f
o
n
o

i
t
r
o
p
o
r
P

30 %

25 %

20 %

15 %

10 %

5 %

0 %

2010

2011

2013

2014

2012

Year

Source: European Court of Auditors, based on survey results. 

30 %

25 %

20 %

15 %

10 %

5 %

0 %

s
e
l
u
r
d
i
a
e
t
a
t
S
o
t

s
t
c
e
j
o
r
p

l
l
a
f
o
n
o

i
t
r
o
p
o
r
P

Projects subject to State aid rules

Projects affected by State aid error

75 
We also analysed 1026 ACRs for ERDF/CF operational programmes submitted to 
DG REGIO in the 2010‑2014 period (see Table 5). Audit authorities were required 
to report on the ‘principal results’ of their audits of projects in the ACRs59. In par‑
ticular, we looked for reporting on State aid errors. We found that a reference to 
State aid errors was made in only 40 of the 1026 ACRs (3.9 %). The most common 
error reported in the ACRs concerned ‘de minimis’ aid. 

59  Commission Regulation (EC) 
No 1828/2006, Annex VI.

5 ACRs submitted to DG REGIO, 2010-2014
e
l
b
a
T

Year

Number of ACRs reviewed 

2010

2011

2012

2013

2014

Total

199

211

203

209

204

1 026

Number of ACRs with State aid 
irregularities identified

Identification frequency

4

8

9

9

10

40

2.0 %

3.8 %

4.4 %

4.3 %

4.9 %

3.9 %

Source: European Court of Auditors, based on analysis of ACRs submitted to DG REGIO.

 
 
 
 
 
 
 
 
 
 
 
 
Observations 

44

76 
Our analysis showed that the proportion of ACRs with reported State aid errors 
varied between Member States; for Denmark we found a total of five ACRs that 
mentioned State aid errors, for Cyprus, Estonia and France we found four and 
for Hungary and Lithuania we found three. For eight Member States (Belgium, 
Ireland, Italy, Luxembourg, Malta, Austria, Slovenia and Slovakia) we did not find 
any ACRs that mentioned State aid errors. 

60  See paragraph 6.65 of our 

annual report concerning the 
financial year 2014.

61  See paragraph 6.59 of our 
upcoming annual report 
concerning the financial year 
2015.

77 
Compared to the results of the checks performed by the Commission (see para‑
graphs 47 to 56) and us (see paragraphs 33 to 44), the audit authorities detected 
State aid errors at a significantly lower rate.

78 
As part of the work for our annual compliance audit for 2014 we reviewed a sam‑
ple of 53 audit checklists used by the audit authorities in their audits of projects. 
We found that 18 of them (around 33 %) had significant shortcomings; for exam‑
ple, the checklist did not require a verification of the aid intensity, which is one 
of the main sources of errors in our audits (see paragraph 39)60. Proper State aid 
checklists could help audit authorities in detecting State aid errors. 

79 
During 2015, the Commission encouraged audit authorities to address this issue, 
and our analysis found significant improvements in this regard61. 

Observations 

45

Member State authorities need additional support in relation to 
auditing compliance with State aid rules

80 
Almost all audit authorities which responded to our survey considered the EU’s 
legal framework for State aid to be at least fairly complex (see Figure 9). More 
than 35 % of them cited the volume of legislation as the biggest factor causing 
complexity in State aid. Another 35 % stated that they had difficulty in applying 
legislation in practice. An overview of the legal framework in the area of State aid 
is provided in Annex IV.

authorities 

9 Assessment of the EU’s legal framework for State aid – survey responses by audit 
e
r
u
g
i
F

Fairly simple: 3 %

Very simple: 0 %

Highly complex: 24 %

Fairly complex: 73 %

Source: European Court of Auditors, based on survey results.

81 
More than 85 % of all audit authorities which responded to our survey also con‑
sidered that they would benefit from further support from the Commission (see 
Figure 10). The support most often suggested was a practical guidebook with 
case studies (almost 70 %) and additional training measures (50 %). 

 
Observations 

46

audit authorities

0 Additional support needed from the Commission on State aid – survey responses by 
1
e
r
u
g
i
F

Practical guidebook with case studies

Training on specific topics

Additional guidance on specific topics

Additional/more detailed analytical grids

No additional support is needed

0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 %

Source: European Court of Auditors, based on survey results.

82 
The survey also showed that almost 70 % of audit authorities rarely or never had 
contact with State aid offices. Audit authorities from 8 Member States were not 
aware of the existence of a State aid office at central level in their Member State. 
Audit authorities can build on their State aid expertise by cooperating with the 
State aid offices more frequently.

 
47

62  See the Commission’s 2015 
State aid scoreboard.

63  A total of 22 new exemption 
categories such as aid for 
broadband infrastructure and 
aid for sport and 
multifunctional recreational 
infrastructures have been 
created. Some categories such 
as aid for small enterprises 
newly created by female 
entrepreneurs have been 
removed. Other categories 
such as aid for innovation 
advisory services and for 
innovation support services 
and aid for the loan of highly 
qualified personnel have been 
merged. In total, the number 
of exemption categories has 
increased from 26 to 43.

64  The scope has been expanded 
for example in risk finance aid, 
investment aid for research 
infrastructure and 
environmental aid.

65  30 % of existing GBER 

categories have increased 
notification thresholds (for 
example R&D notification 
thresholds have doubled). Aid 
intensity levels have increased 
for example for investment aid 
for environmental protection, 
from 35‑55 % to 40‑75 %.

Observations 

Commission has taken action to simplify applicable 
State aid legislation and to promote administrative 
capacity of Member States 

83 
We have sought to identify whether the Commission has addressed the problem 
of non‑compliance with State aid in the area of cohesion policy by taking ap‑
propriate preventive actions. Actions can encompass legislative actions such as 
simplifying rules or introducing reporting requirements for monitoring purposes 
and non‑legislative actions such as training, seminars and dissemination of good 
practice. Such actions can relate to authorities involved in managing and control‑
ling State aid in the area of cohesion policy as well as beyond.

Expanded General Block Exemption Regulation leads to 
a shift of responsibility from the Commission to Member 
States

The new GBER provides greater exemption from notification, 
strengthens transparency and introduces evaluation requirements

84 
In the 2009‑2014 period, over 115 billion euro was spent under the GBER62. In June 
2014, the Commission adopted a new GBER to replace the 2008 GBER. The adop‑
tion of the new GBER is the most significant action taken by the Commission for 
the 2014‑2020 programme period in the area of State aid. The main modifications 
in the 2014 GBER are:

(a)  an increase in the scope of the Regulation;

(b)  a change in the application of the incentive effect; 

(c)  stronger transparency requirements; and

(d)  ex post evaluation of large aid schemes.

Increase in scope

85 
The scope of the GBER was increased by introducing new categories of aid63, ex‑
panding the scope of categories of aid already exempted under the 2008 GBER64 
and by increasing the notification thresholds and aid intensities for certain aid 
measures65. 

Observations 

48

86 
The increase in scope is significant: DG COMP estimates that the 2008 GBER 
covered 60 % of aid measures and 30 % of aid amounts granted66. In contrast, DG 
COMP estimated that, in the 2014‑2020 programme period, between 75 % and 
90 % of aid measures and 67 % of aid amounts granted could be covered by the 
2014 GBER (see Figure 11)67. The precise impact of the increase in scope can only 
be assessed in the years to come. 

66  See the Commission’s press 
release IP 14 587 of 21.5.2014.

67  See European Commission 
Memo 14‑369 of 21.5.2014.

2014 GBER compared to the 2008 GBER

1 Estimated minimum impact of the increase in scope of the 
1
e
r
u
g
i
F

100 %

R
E
B
G
e
h
t
y
b
d
e
r
e
v
o
c

s
t
n
u
o
m
a
d
i
a
f
o
n
o
i
t
r
o
p
o
r
P

67 %

30 %

All other State aid: notiﬁed aid, services of general economic
interest, ...

2014 GBER: 43 exemption categories; higher 
notiﬁcation tresholds and aid intensities

2008 GBER: 26 exemption categories

%
0
6

%
5
7

%
0
0
1

Proportion of aid measures covered by the GBER

Source: European Court of Auditors, based on Commission estimates and the 2008 and 2014 GBERs.

 
 
 
 
 
 
 
 
 
 
 
Observations 

49

87 
By increasing the scope of the GBER, the Commission has significantly reduced 
administrative burdens for Member States and its own DGs, since significantly 
fewer aid measures will need to be notified. However, by increasing the scope of 
the GBER, the Commission has also shifted more responsibility to Member States. 
They will now have to verify for a larger number of aid measures whether they 
are compliant with State aid rules, such as the respect of aid intensity ceilings and 
the demonstration of the incentive effect. The Commission’s monitoring exer‑
cises have shown that Member States made many mistakes in the design and im‑
plementation of aid schemes in the 2009‑2014 period. These mistakes were likely 
to affect compatibility, in particular for GBER schemes (see paragraphs 52 to 54).

Change in the application of the incentive effect 

88 
State aid can be effective in achieving the desired public policy objective only 
when it has an incentive effect, i.e. it induces the aid beneficiary to undertake 
activities it would not have done without the aid (see paragraph 40). The second 
main change of the 2014 GBER has been to make it easier for large enterprises to 
demonstrate such an incentive effect when receiving aid under an aid scheme by 
aligning the requirements to those applicable to SMEs (see Table 6). This repre‑
sents another reduction in administrative burdens for the Commission, Member 
States and these enterprises.

6 Demonstrating the incentive effect, 2008 GBER versus 2014 GBER
e
l
b
a
T

2008 GBER

2014 GBER

SME aid

Aid to large 
enterprises awarded 
under aid schemes

(a) 

(a) 

(a) 

submitting the project application before work on the project or activity has started

submitting the project application before work on the project or activity has started

 verification that documentation prepared by the 
beneficiary establishes that the aid led to a mate-
rial increase in the size, the scope or the speed of 
completion of the project or a material increase in 
the amount spent on the project

-

Aid awarded to large 
enterprises outside 
of an aid scheme

(a) 
(b) 

submitting the project application before work on the project or activity has started; and 
 verification that documentation prepared by the beneficiary establishes that the aid led to a material increase in the 
size, the scope or the speed of completion of the project or a material increase in the amount spent on the project

Source: European Court of Auditors, based on the 2008 and 2014 GBERs.

 
 
Observations 

50

Stronger transparency requirements 

89 
The third main change of the 2014 GBER is a considerable increase in transparen‑
cy requirements for individual aid. Transparency provisions now require Member 
States to publish information not only on aid schemes and ad hoc aid but also on 
all individual aid measures exceeding 500 000 euro granted under aid schemes68. 
Under the 2008 GBER, Member States were required to send information only on 
larger individual aid measures and only to the Commission (without publication), 
and only in the regional investment and research and development aid catego‑
ries, under specified circumstances69. 

90 
To facilitate central publication of all information posted on the national or re‑
gional websites for these State aid awards, DG COMP developed a specific IT tool 
in cooperation with Member States called the Transparency Award Module. This 
tool was made available on 1 July 2016 70. 

68  The information, including all 
relevant aspects of an aid 
award such as the amount of 
the grant, the granting body 
and the beneficiary, is to be 
published on 
a comprehensive State aid 
website, at national or regional 
level, starting 1 July 2016 at 
the latest. See Article 9 of the 
2014 GBER.

69  Article 9 of the 2008 GBER.

70  https://webgate.ec.europa.eu/
competition/transparency/
public/search/
chooseLanguage.

71  Article 1(2) of the 2014 GBER. 

The categories are regional 
aid, aid for SMEs and for access 
to finance for SMEs, aid for 
R&D&I, aid for environmental 
protection and aid for 
broadband infrastructures.

91 
We expect increased transparency to improve compliance with State aid rules in 
the Member States, since interested parties will have better information to file 
complaints about unlawful aid. The Commission is required to examine all such 
complaints (see paragraph 20). 

Ex post evaluation of large aid schemes

92 
For the 2014 GBER the Commission has introduced the concept of ex post evalu‑
ation for aid schemes in certain categories with an annual budget exceeding 
150 million euro71. Such evaluations must be carried out by Member States with 
a view to weighing the positive effects against the negative effects of an aid 
scheme. Ex post evaluation increases administrative burdens for Member States; 
DG COMP has, however, limited this increase by restricting the requirement of 
evaluation to large aid schemes. By the end of 2015 Member States had submit‑
ted 18 evaluation plans under the 2014 GBER to DG COMP. The first evaluation 
results are expected in 2017.

Observations 

51

Retroactive application of the new GBER

93 
The new GBER was published on 26 June 2014 and entered into force on 
1 July 2014. Article 58(1) states that ‘this Regulation shall apply to individual aid 
granted before its entry into force’72. This means that aid granted before the en‑
try into force of the 2014 GBER which was incompatible with the internal market 
at the time it was granted could subsequently be declared to be compatible, if 
the aid is compatible under new or changed provisions included therein73. For 
example, a beneficiary might be in breach of the incentive effect stipulations in 
force at the time the aid was granted, though not of the new stipulations of the 
2014 GBER. Because of the retroactive application of the 2014 GBER, Member 
States would no longer be required to recover this aid.

72  The 2008 GBER contained 

a similar stipulation, see Article 
44.

73  The situation where the 

Commission decides on the 
compatibility of aid after it is 
granted occurs when the aid is 
unduly not notified and the 
Commission is made aware of 
that fact, for example through 
a complaint by an interested 
party.

74  Article 1(4) the 2014 GBER and 

Article 1(6) of the 2008 GBER.

94 
The retroactive application could result in aid measures being declared incom‑
patible with the internal market because of a change in a provision or because 
the introduction of a new provision which was not in force at the time the aid was 
granted. In its monitoring exercises during the 2009‑2014 period, the Commission 
found 16 problems which affected compatibility at the time the aid was granted. 
In four of these cases, it later found the aid to be compatible because of the 
retroactive application of the 2014 GBER. Similarly, in our 2014 annual compliance 
audits we found two State aid errors which had a financial impact at the time the 
aid was granted (when the 2008 GBER was in force) but were only a compliance 
issue without financial impact by the time of our audit (when the 2014 GBER had 
entered into force). 

Difficulties persist in monitoring the status of recovery of unlawful 
aid across Member States 

95 
The 2014 GBER maintains the principle already set out in the 2008 GBER accord‑
ing to which it is prohibited to grant aid to undertakings which are subject to an 
outstanding recovery order74. This provision is called the ‘Deggendorf’ principle.

52

75  The Commission considers 
operating aid to present 
particular risk to the internal 
market. For example, 
operational programmes for 
the 2014‑2020 programme 
period contain a disclaimer 
that particular attention needs 
to be paid to State aid rules for 
operating aid.

76  Section 3.8 of the 2014‑2020 
regional aid guidelines.

77  Section 5.4 of the 2014‑2020 

regional aid guidelines versus 
section 4.1.2 of the 2007‑2013 
regional aid guidelines.

78  Section 3.5 of the 2014‑2020 

regional aid guidelines versus 
section 4.1.1(38) of the 
2007‑2013 regional aid 
guidelines.

Observations 

96 
When the Commission adopts a recovery decision, the Member State concerned 
is obliged to recover the unlawful aid from the beneficiary. Recovery deci‑
sions are published in the Official Journal of the European Union. Unlike for 
individual aid, where the recovery decision identifies the beneficiary, in case of 
aid schemes, it is generally up to the Member State to identify and inform the 
Commission which undertakings benefited from the aid and what is the relevant 
aid amount to recover. As a result, in the case of recovery decisions applying to 
national aid schemes, the decision published in the Official Journal does not 
identify the specific undertakings concerned. Moreover, it is the Member State 
which is responsible for the recovery and for informing the Commission about it. 
However, there is no system in place through which the status of these recovery 
proceedings (i.e. whether or not the recovery order is still outstanding) across EU 
Member States is made accessible to the relevant authorities of another Member 
State. This poses a particular problem in relation to undertakings which operate 
in more than one Member State. 

Stricter aid conditions in regional aid guidelines encourage the 
use of the GBER 

97 
The Commission considers aid granted under State aid guidelines (see Annex IV ) 
to present a particular risk to the internal market, either because of the size of the 
aid (individual aid which exceeds the GBER notification thresholds) or the type 
of the aid (for example, operating aid to SMEs in certain regions must be notified 
under the regional aid guidelines75). For this reason, the provisions of the guide‑
lines are stricter than those of the GBER. The regional aid guidelines, which are 
one of seven State aid guidelines revised for the 2014‑2020 programme period, 
focus on the development of disadvantaged areas in terms of living standards 
(certain areas where the GDP per capita is below or equal to 75 % of the EU aver‑
age) or population density (certain areas with less than 12.5 inhabitants per km2) 
and are particularly relevant for cohesion policy.

98 
The regional aid guidelines for the 2014‑2020 programme period increase trans‑
parency by mandating the publishing of relevant information on a central web‑
site76. They reduce the risk of aid distorting the internal market by lowering the 
maximum aid intensities allowed for large undertakings in all but the poorest re‑
gions77. They also change the application of the incentive effect. For example, in 
the field of investment aid, they now require aid recipients to explain counterfac‑
tually what would have happened had they not received the aid78. This require‑
ment also applies to SMEs, making the regional aid guidelines much stricter than 
the GBER with regard to demonstrating the incentive effect (see paragraph 88). 

53

79  See ‘Guidance for the 

Commission and Member 
States on a common 
methodology for the 
assessment of management 
and control systems in the 
Member States’ of 
18 December 2014.

80  Regulation (EU) No 1303/2013.

81  Article 19 of Regulation (EU) 

No 1303/2013.

Observations 

99 
Regional aid guidelines also require ex post evaluation of aid schemes, under cer‑
tain conditions. Ex post evaluation may be imposed by DG COMP for aid schemes 
with large budgets, containing novel characteristics or when significant market, 
technology or regulatory changes are foreseen79. As of 30 June 2016, Member 
States submitted ten evaluation plans under State aid guidelines, including re‑
gional aid guidelines. 

Newly introduced ex ante conditionalities and major project 
procedure may improve compliance with State aid rules in 
cohesion policy

100 
The Common Provisions Regulation for the 2014‑2020 programme period intro‑
duces two changes with particular relevance for State aid in cohesion policy80:

(a)  ex ante conditionalities; and

(b)  a new, optional procedure for approving major projects.

Member States not fulfilling ex ante conditionalities are not those 
where the Commission found most problems in the past

101 
Ex ante conditionalities are conditions, based on pre‑defined criteria, which the 
Commission regards as necessary prerequisites for the effective and efficient use 
of EU funds. State aid is one area for which such conditions are specified. Accord‑
ing to the Commission, fulfilling these conditions has the potential to reduce 
the number of errors and problematic cases of State aid as it helps to improve 
management and control systems in the Member States which should improve 
compliance with State aid.

102 
Member States were required to carry out a self‑assessment of whether and how 
they met the following three criteria: the effective application of State aid rules; 
training and dissemination of information for staff; and administrative capacity81. 
Five Member States concluded in agreement with the Commission that they did 
not fulfil the conditions at the time of the adoption of the partnership agree‑
ments (see Table 7). 

Observations 

54

7
e
l
b
a
T

Member States not fulfilling the State aid ex ante conditionality criteria

Criterion

Croatia

Czech Republic

Italy

Romania

Slovakia

Arrangements for the effective application of State 
aid rules

Arrangements for training and dissemination of 
information for staff

Arrangements to ensure administrative capacity

-

-

-

Note:  √  means the criterion is fulfilled

-  means the criterion is not fulfilled

Source: European Court of Auditors, based on Commission data.

-

√

-

-

-

-

-

√

√

-

√

-

103 
In each case, DG REGIO and the Member State concerned agreed on a number of 
actions to be taken by the Member States which are documented in action plans. 
Examples of some actions are presented in Box 8. 

8
x
o
B

Examples of actions to be implemented to fulfil State aid ex ante conditionality 
criteria

Arrangements have to be put in place for the Member States in Table 7 concerning:

The effective application of State aid rules. Examples of agreed actions:

Setting up central State aid registers for complying with the 2014 GBER or for registering de minimis aid (Italy 
and Romania) 

Ensuring compliance with the Deggendorf principle by, for example, publishing a list of companies with out‑
standing recovery orders (the Czech Republic, Italy and Romania)

Training and dissemination of information for staff. Examples of agreed actions:

Requiring staff to follow at least two State aid training courses per year (Italy) 

Setting up an operational network of State aid experts and coordinators (Croatia)

Ensuring administrative capacity. Examples of agreed actions:

Requiring a Member State to reinforce its administrative capacity by 10 to 15 posts (Slovakia) 

Adopting a recruitment plan for national authorities involved in the management of the structural and invest‑
ment funds (Croatia)

Source: European Court of Auditors, based on State aid ex ante conditionality action plans.

 
 
 
Observations 

55

104 
These actions must be completed by the end of 2016. Following the reporting 
on the fulfilment of the action plans by the Member States, the Commission will 
assess their completion. If the Commission concludes, based on its assessment, 
that an action plan has not been properly implemented, it can suspend payments 
to the Member State82. At the end of August 2016, the Commission assessment on 
whether the five Member States had implemented all actions in their action plans 
was still ongoing. 

82  Article 19 of Regulation (EU) 

No 1303/2013.

83  Article 101 of Regulation (EU) 

No 1303/2013.

105 
The Common Provisions Regulation did not require Member States to base 
their self‑assessments on compliance with State aid rules during the 2007‑2013 
programme period, but laid down three specific criteria on administrative ar‑
rangements (see Table 7). When assessing the adequacy of the Member States’ 
self‑assessments, the Commission was not effective in making use of available 
monitoring information with a view to specifying action plans for all Member 
States where significant problems had been found in the past. In particular, 
according to the results of DG COMP’s monitoring exercises carried out during 
2006‑2014, several Member States had a higher frequency of problems in the 
design and implementation of aid measures than the ones which concluded that 
they did not fulfil the State aid ex ante conditionalities (see paragraph 55). 

Alternative approval procedure for major projects may improve 
clearance of State aid issues within the Commission, but is not 
designed always to provide legal certainty to Member States

106 
For the 2007‑2013 programme period, major projects were adopted by the Com‑
mission after it reviewed the project applications sent by the Member States (see 
paragraphs 66 to 71). In the 2014‑2020 programme period a second, alternative 
approval procedure for major projects was introduced by the Common Provi‑
sions Regulation83, where the application is appraised by an independent expert 
before being notified to the Commission by the Member State (see Box 9). Use 
of the alternative procedure is optional; as of June 2016, only one major project 
application had been submitted under the alternative procedure. 

Observations 

56

9
x
o
B

Appointment of an independent expert and validation of the independent quality 
review

The independent expert reviews the major project proposal. This review includes an analysis of the aid 
character of the measure and its compatibility with the internal market. If the project application is assessed 
positively, the managing authority can approve the major project and send it to the Commission. The Com‑
mission can object to the project approval within three months if it establishes a ‘significant weakness’ in the 
independent quality review report.

The expert is chosen by the Member State, subject to Commission approval. The Commission has already pre‑
approved an expert group called ‘Joint assistance to support projects in European regions’ (JASPERS)84. 

84  JASPERS is a technical assistance partnership between DG REGIO, the European Investment Bank and the European Bank for Reconstruction and 

Development. It is provided to Member States free of charge.

107 
This alternative procedure for major projects may improve clearance of State 
aid issues within the Commission, but is not designed always to provide legal 
certainty for Member States with regard to State aid compliance at the time the 
major project decision is taken. That certainty can only be obtained on the basis 
of a Member State notification followed by a Commission State aid decision (see 
paragraph 70).

A State aid common action plan set up by the Commission 
aims to strengthen the administrative capacity of Member 
States and requires continuous attention

108 
In March 2015, DG COMP and DG REGIO agreed on a State aid common action 
plan85. 

109 
The action plan originally comprised six actions intended to raise awareness and 
improve knowhow in the field of State aid in all Member States: identification 
and dissemination of good practice, training courses for State aid specialists, 
country‑specific workshops, seminars for specialists, the further development of 
a question‑and‑answer database (the ECN‑ET network86) and the development 
of a State aid information database. In 2016, the Commission added a seventh 
action (see Table 8).

85 

‘Strengthening administrative 
capacity for the management 
of the funds of Member States 
in the field of State aid – 
a common action plan’, 
adopted by the Commission 
18 March 2015.

86  The European Competition 
Network ‑ Electronic 
Transmission (ECN‑ET) is an 
electronic interface where 
Member States can ask State 
aid‑related questions to DG 
COMP. In general, both the 
questions and DG COMP’s 
replies are published for all 
Member States to see. An 
example of an exception to 
publication is where a very 
specific case is not useful to 
other Member States.

 
Observations 

57

8
e
l
b
a
T

The Commission’s State aid common action plan

Number

Action and deadline

Description

State of play as of August 2016

Identification and dissemination 
of good practice

Early outcomes expected by 
Q2 2015

Training for national State aid 
specialist on European Structural 
and Investment Funds1

Q2 2015

Country-specific workshops

Starting from Q2 2015

Seminars for specialists, internet 
training courses

Continuous action

Development of question-and-
answer database

Continuous action

Development of State aid wiki

Continuous action

Development of a dedicated 
training module

1

2

3

4

5

6

7

Compiling an inventory of effective tools existing in 
various Member States to build administrative capacity 
and to identify good practices which can be shared.

Finalised in 2016

A one-day training session tailor-made for national 
State aid specialists to be held in Brussels. 

Has not taken place as of August 2016.

Organising interactive country-specific seminars in 
Member States which do not fulfil the ex ante condi-
tionality on state aid or where serious bottlenecks were 
identified.

Seminars have been organised in 2014 
(Spain) and 2015 (Bulgaria Croatia, the Czech 
Republic, Italy, Romania and Slovakia). 

Disseminating knowledge through very specific, tailor-
made seminars focused on a particular topic/issue.

Providing guidance regarding the interpretation of the 
new rules to all national State aid specialists through 
a shared IT platform fully managed by DG COMP.

A number of pages summarising the relevant questions 
asked through the ECN-ET.

A series of two-day State aid training sessionsis under 
development by DG REGIO/DG EMPL and DG COMP 
together with the European Institute of Public Adminis-
tration. Two training sessions will take place in Brussels 
in November and December 2016; more can be added 
based on Member State demand. 
The target group is European Structural and Investment 
Fund practitioners with some experience of State aid. 

A thematic workshop for Research, Develop-
ment and Innovation took place in Brussels 
in January 2016.

More than 600 questions and answers have 
been submitted as of June 2016; these are 
being migrated to the eState aid wiki (see 
action 6).

Went online in February 2016 and is called 
eState aid wiki. Around 270 questions and 
answers had been posted as of June 2016.

Intended for November and December 2016

1   The European Structural Investment Funds are the ERDF, the CF, the ESF, the European Agricultural Fund for Rural Development, and the Euro‑

pean Maritime and Fisheries Fund.

Source: European Court of Auditors, based on Commission information.

 
58

87  All Member States except 
Denmark, Ireland, Greece, 
Cyprus, Lithuania, 
Luxembourg, Malta, the 
Netherlands and Austria.

88  Bulgaria, Croatia, the Czech 
Republic, Romania and 
Slovakia.

89  Over 600 questions and 

answers had been posted in 
the preceding ECN‑ET 
network; these are being 
migrated to the eState aid 
wiki.

Observations 

110 
Out of the seven actions in the State aid common action plan, actions 1 and 3 
had been fully implemented; actions 5 and 6 had been implemented and are 
supposed to function on a continuous basis. The remaining three actions had not 
been implemented as of August 2016: one was in the process of being rolled out 
(action 4) and two were yet to start (actions 2 and 7). 

111 
In addition we found that DG REGIO and DG EMPL had significantly increased the 
total number of training courses provided from 5 in the 2012‑2013 period to 17 in 
the 2014‑2015 period. DG COMP organised 37 training courses on the reform of 
State aid legislation for the 2014‑2020 programme period in 2014 and 2015 on the 
request of 19 Member States87. In addition, by January 2016 DG COMP had organ‑
ised training courses on State aid and infrastructure for five Member States88. 

112 
The State aid common action plan and the increase in training activities provided 
by the Commission are part of a concerted effort to improve Member States’ 
compliance with State aid rules, partially as a response to their increased re‑
sponsibilities in the area of State aid. These initiatives are important to mitigate 
the risk of increasing the Member States’ role in designing and implementing 
aid measures. Our survey results show that the eState aid wiki in particular was 
received very positively. It has been used extensively by Member States: as of 
30 June 2016, about 270 questions and answers had been posted 89. 

113 
The extent to which these actions will lead to improvements in the detection and 
prevention of State aid errors in the Member States can only be assessed in the 
future. 

Conclusions and 
recommendations

59

114 
Since 2010, our audits in cohesion policy found a significant level of non‑compli‑
ance with State aid rules. This report points to a need for more awareness of the 
applicable rules at Member State level and for continued Commission support to 
effectively prevent, detect and correct infringements of State aid rules. Overall, 
we found that: 

(a)  Over the 2010‑2014 period, the Commission and the Court of Auditors de‑

tected infringements of State aid rules in a significant number of our audits; 
State aid errors in ERDF and CF were an important factor contributing to our 
estimated level of error in cohesion policy. We found that the Commission’s 
own audits and monitoring in the cohesion area resulted in a detection rate 
which was similar to our own findings. The audit authorities in the Member 
States, on the other hand, detected infringements of State aid rules at a far 
lower rate than either the Commission or us. This indicates that, so far, audit 
authorities have not focused sufficiently on State aid in the course of their 
audits.

(b)  During the 2007‑2013 programme period the Commission did not record 

the State aid errors it detected or those reported by Member States in a way 
which allowed it to perform a proper analysis. Such an analysis could have 
helped the Commission to develop more focused and tailor‑made preventive 
measures for Member States and programmes.

(c)  Particularly in the beginning of the 2007‑2013 programme period, the Com‑

mission did not systematically verify major projects for State aid compliance. 
There is a risk that some EU co‑financed major projects are incompatible with 
the internal market, also due to the fact that prior to 2012, and the clarifica‑
tion provided by the Leipzig Halle judgment, Member States rarely notified 
investments in infrastructure to the Commission. In order to mitigate this risk 
for the future, the Commission stepped up its internal preventive measures 
and it introduced an alternative approval procedure including an Independ‑
ent Quality Review for the 2014‑2020 programme period. According to the 
Commission, independent of the procedure used by the Member State, major 
projects will only be approved after internal State aid clearance.

(d)  The Commission has taken actions to simplify the applicable State aid legisla‑
tion for the 2014‑2020 programme period which have resulted in a reduction 
of administrative burdens and more transparency, but have also increased 
Member States’ responsibilities for designing and implementing aid meas‑
ures. Member States getting more responsibility risks increasing the number 
of State aid errors: the Commission’s monitoring has shown that Member 
States made many mistakes in the design and implementation of aid schemes 
in the 2007‑2013 programme period. To mitigate this risk, the Commission 
has taken actions to promote Member States’ administrative capacity in the 
area of State aid, including the introduction of pre‑conditions for State aid 
systems to promote the efficient and effective implementation of European 
Structural and Investment Funds (‘ex ante conditionalities’). However, the 
Member States which were considered not to be fulfilling these conditions 
are not necessarily those where the Commission found most problems in the 
past. Moreover, these actions require continuous attention. 

Conclusions and recommendations 

60

No comprehensive overview of State aid errors by the Commission, 
insufficient Member State focus on State aid and insignificant 
recovery of State aid following the Commission’s monitoring 
exercises 

90  Greece, Spain, France, Austria 

and Poland.

115 
Over the 2010‑2014 period, we found a significant number of cases of non‑
compliance with State aid rules in 269 projects audited in the area of cohesion to 
which these rules applied; State aid errors were an important factor contributing 
to our estimated level of error in cohesion policy. DG REGIO’s own audits in the 
area of cohesion have results similar to ours (see paragraphs 33 to 36 and 47 to 
48).

116 
In order to protect the EU budget, the Commission imposes financial corrections 
on Member States when cases of non‑compliance with State aid rules are detect‑
ed. For the 2010‑2014 period, DG REGIO has implemented or was in the process 
of implementing 18 financial corrections against seven Member States that 
resulted at least partially from infringements of State aid rules. Ten resulted from 
DG REGIO’s own audits, five from our audits and three from DG REGIO’s review of 
the audit authorities’ ACRs. 11 of these financial corrections, amounting to 38.4 
million euro in total and covering five Member States, were solely related to State 
aid90. It is not possible to quantify the State aid component of the other financial 
corrections (see paragraphs 49 to 51). 

117 
The Commission is required to regularly monitor aid measures to verify whether 
and to what extent they respect State aid rules. If it finds that any aid granted is 
incompatible with the internal market, it can proceed to the recovery of aid. DG 
COMP has so far only taken limited corrective action in view of the number and 
seriousness of the issues detected through its monitoring exercises. On average, 
based on its monitoring, DG COMP considers that around 36 % of all aid schemes 
were affected by problems in the 2009‑2014 period. Problems which affected 
compatibility (7.3 % of all schemes) were particularly significant. During this 
period, DG COMP’s monitoring resulted in eight voluntary recoveries and in eight 
formal actions, the latter of which led to a total recovery of 0.3 million euro (see 
paragraphs 52 to 56). 

Recommendation 1

The Commission should impose corrective actions where aid measures are not in 
compliance with State aid rules.

Target implementation date: immediately

Conclusions and recommendations 

61

118 
For the 2007‑2013 programme period, neither DG REGIO nor DG EMPL recorded 
cases of non‑compliance with State aid rules they had detected in a way which 
allowed them to perform a proper analysis of State aid errors (see paragraphs 57 
to 61).

119 
The Commission has developed a database for the 2014‑2020 programme period 
(MAPAR) for recording information on cases of non‑compliance with State aid 
rules it detects during its own audits for ERDF, CF and ESF. This system represents 
a considerable improvement, but no access has been granted to DG COMP (see 
paragraph 57). 

120 
State aid errors reported by Member State authorities are encoded in the Com‑
mission’s Irregularity Management System (IMS). IMS shows several weaknesses 
such as the absence of a specific error typology for State aid and an insufficient 
description of errors; it is therefore of limited use in practice. DG COMP does not 
have access to IMS either (see paragraphs 58 and 59).

Recommendation 2

(a)  The Commission should use MAPAR to record irregularities in a way that 

allows easy analysis of, for example, their type, frequency, seriousness, 
geographical origin and cause. The database should equally contain infor‑
mation on the follow‑up of these irregularities (such as financial corrections 
imposed). 

Target implementation date: immediately

(b)  With regard to IMS, the Commission should adapt the database’s structure 
so that information on irregularities such as State aid can be extracted and 
analysed across Member States and type.

Target implementation date: by the end of 2017

(c)  DG COMP should be given access to all relevant information on State aid ir‑

regularities contained in MAPAR and IMS on a regular basis. 

Target implementation date: immediately

Conclusions and recommendations 

62

121 
The Commission decision approving major projects is based on an assessment of 
the projects’ relevance, viability, sustainability, environmental profile and justifi‑
cation of requested funding as well as information provided by the Member State 
on whether State aid is involved; however, it is not designed always to provide 
legal certainty for Member State as to compliance with State aid rules at the time 
the major project decision is taken. That certainty can only be obtained on the 
basis of a Member State notification followed by a Commission State aid decision 
(see paragraphs 69 and 70).

122 
Particularly at the beginning of the 2007‑2013 programme period, the Commis‑
sion did not systematically verify major projects for State aid compliance. As 
a result, there is a risk that some EU co‑financed major projects are incompatible 
with the internal market, also due to the fact that prior to 2012, and the clarifi‑
cation provided by the Leipzig Halle judgment, Member States rarely notified 
investments in infrastructure to the Commission. In order to mitigate this risk 
for the future, the Commission stepped up its internal preventive measures and 
introduced an alternative approval procedure including an Independent Quality 
Review for the 2014‑2020 programme period (see paragraphs 62 to 65, 70 and 
106 to 107).

Recommendation 3

(a)  The Commission should approve major projects only after internal State aid 
clearance and consistently ask Member States to notify aid where needed 
with a view to ensuring legal certainty, independent of the application proce‑
dure used by the Member State.

Target implementation date: immediately

123 
During the 2010‑2014 period, audit authorities estimated that around a third of the 
ERDF/CF and ESF projects they audited had been State aid relevant. They detected 
State aid errors in only 3.6 % of those projects. Over that same period, we detected 
State aid errors in ERDF/CF and ESF projects at more than five times this rate. There 
were significant shortcomings in the State aid section of slightly over one third of 
the checklists used by audit authorities that we reviewed. Improvements in this 
regard were made in 2015. Most of the errors reported in audit authorities’ annual 
control reports related to de minimis aid. Setting up a central register with com‑
plete information on all de minimis aid granted in the Member State concerned 
could help to prevent such errors (see paragraphs 43 and 74 to 79).

Conclusions and recommendations 

63

124 
Almost all audit authorities considered the EU’s legal framework for State aid 
to be at least fairly complex. Audit authorities expressed a need for additional 
support in relation to auditing compliance with State aid rules, in particular for 
a practical guidebook with case studies. On specific aspects, such as the status of 
recovery decisions, Member State authorities do not have the necessary informa‑
tion to verify compliance with the applicable State aid rules (Deggendorf princi‑
ple) (see paragraphs 80 to 82 and 95 to 96). 

Recommendation 4

a)  The Commission should ensure that the scope and quality of audit authori‑

ties’ checks of compliance with State aid rules are sufficient. 

Target implementation date: March 2017

(b)  In view of the closure of the 2007‑2013 programme period, the Commission 

should ask audit authorities to check the State aid compliance of those major 
projects that have been approved before the end of 2012.

Target implementation date: March 2017

(c)  The Commission should develop further guidance material, including in par‑
ticular case studies illustrating good practices and the most common types 
and causes of infringements of State aid rules.

Target implementation date: by the end of 2017

(d)  The Commission should encourage Member States to set up a central register 

for monitoring de minimis aid. 

Target implementation date: by the end of 2017

(e)  The Commission should set up a central EU‑wide database in which relevant 
Member State authorities can consult the identity of undertakings subject to 
State aid recovery orders as well as the status of recovery proceedings, in or‑
der to enable them to comply with the Deggendorf principle. Access should 
be granted only on a need‑to‑know basis.

Target implementation date: by the end of 2017

Conclusions and recommendations 

64

Commission has taken action to simplify applicable State aid 
legislation, which increases Member States’ responsibilities, and 
to promote Member States’ administrative capacity

125 
The Commission adopted a new GBER for the 2014‑2020 programme period. The 
scope of the 2014 GBER has increased significantly, which will lead to even more 
aid measures falling under it. By increasing the scope of the GBER, the Commis‑
sion has significantly reduced administrative burdens for Member States and 
itself, since significantly less aid measures will need to be notified. Member States 
will have to ensure and verify for a larger number of aid measures whether they 
are compliant with State aid rules such as the respect of aid intensity ceilings 
and the demonstration of the incentive effect. The provisions of the regional aid 
guidelines for the 2014‑2020 programme period are generally stricter than those 
of the GBER, further encouraging its use (see paragraphs 85 to 87 and 97 to 98).

126 
By itself, Member States’ bigger role due to the expansion of the GBER risks 
increasing the number of State aid errors: the Commission’s monitoring exercises 
have shown that Member States made many mistakes in the design and imple‑
mentation of aid schemes in the period 2009‑2014. These problems were likely to 
affect compatibility in particular for GBER schemes (see paragraphs 52 to 54). 

127 
However, the provisions of the GBER have been changed to mitigate this risk. The 
2014 GBER makes it easier for large enterprises which are granted State aid under 
an aid scheme to demonstrate the incentive effect. Another significant change 
in the GBER is an increase in transparency requirements, which we expect to 
improve compliance with State aid rules in the Member States since interested 
parties will have better information to file complaints about unlawful aid (see 
paragraphs 88 to 91). 

Conclusions and recommendations 

65

128 
To improve the way in which Member States design aid schemes, the Commission 
introduced ex post evaluations for the 2014‑2020 programme period. Evaluation 
in particular will be carried out for the largest aid schemes – under the GBER, 
evaluation is mandatory in certain categories for aid schemes with an annual 
budget exceeding 150 million euro. Member States are expected to present their 
first results by 2017 (see paragraphs 92 and 99).

129 
The Common Provisions Regulation introduced ex ante conditionalities regard‑
ing Member States’ State aid systems. Fulfilment of these conditions may reduce 
infringements of State aid rules. Based on a self‑assessment, five Member States 
had not yet fulfilled these conditions by the end of 2015. However, the Member 
States which were considered not to be fulfilling these conditions are not neces‑
sarily those where the Commission found most problems in the past. Moreover, 
these actions require continuous attention. To further promote administrative ca‑
pacity in the area of State aid, DG REGIO and DG COMP adopted a joint State aid 
action plan in March 2015. This action plan has, for example, led to an increase 
in training activities organised by the Commission and in the set‑up of an online 
interface, positively received by Member State authorities, where they can ask 
State aid questions to the Commission (see paragraphs 101 to 105 and 108 to 113). 

130 
The extent to which the promotion of administrative capacity by the Commis‑
sion and the introduction of ex post evaluation can compensate for the increased 
responsibility of Member States and the extent to which these initiatives will lead 
to the better detection and prevention of State aid errors in the Member States 
can only be assessed in the future. 

Conclusions and recommendations 

66

Recommendation 5

(a)  If the ex ante conditionality concerning State aid is not fulfilled by the 

end of 2016 the Commission should use its powers to suspend payments 
to the Member States concerned until they have rectified all significant 
shortcomings.

Target implementation date: once the Commission has finalised its assessment

(b)  Using the information available in its databases, the Commission should fol‑
low up every two years on Member States’ capacity to comply with State aid 
rules by carrying out analyses of, for example, the type, frequency, serious‑
ness, geographical origin and cause of State aid errors detected by the Com‑
mission itself or by Member State authorities. The Commission should use 
these exercises for monitoring purposes and to direct support activities such 
as providing training to the Member States where they are most needed.

Target implementation date: every two years starting from the end of 2017 

This Report was adopted by Chamber II, headed by Mr Henri GRETHEN, Member 
of the Court of Auditors, in Luxembourg at its meeting of 7 September 2016.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA
President

 
 
 
Annexes

67

I
x
e
n
n
A

Spending on State aid by Member State, 2010-2014, million euro

Member State

2010

2011

2012

2013

2014

Total

Percentage of total

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Croatia

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

European Union

2 400

40

1 242

2 211

16 266

49

1 718

2 083

4 898

15 917

-

4 127

121

202

180

108

2 051

92

2 782

2 085

3 499

1 535

315

375

313

2 287

3 210

5 574

1 655

43

1 406

2 369

14 000

52

1 057

2 509

4 507

13 912

-

3 840

140

284

222

114

1 173

102

2 827

1 777

2 942

1 553

677

455

173

3 126

3 155

4 797

1 556

77

1 558

2 591

13 574

62

853

1 931

3 905

15 706

-

4 399

116

398

230

101

1 167

108

2 510

1 914

3 001

933

878

459

133

2 523

3 172

5 524

1 614

121

1 714

2 561

13 808

123

1 144

2 903

3 084

13 733

258

3 469

104

378

208

164

1 452

132

2 064

1 871

2 978

471

896

472

200

2 589

3 255

5 953

1 711

240

2 169

2 509

39 559

236

825

1 929

3 197

15 543

276

5 509

100

492

181

168

1 702

82

2 238

1 479

4 929

732

972

453

313

2 545

3 204

7 872

8 936

520

8 089

12 241

97 208

522

5 597

11 354

19 591

74 811

534

21 343

580

1 754

1 020

655

7 545

516

12 420

9 126

17 349

5 224

3 737

2 214

1 131

13 071

15 996

29 719

75 680

68 866

69 376

67 719

101 161

382 802

2.33 %

0.14 %

2.11 %

3.20 %

25.39 %

0.14 %

1.46 %

2.97 %

5.12 %

19.54 %

0.14 %

5.58 %

0.15 %

0.46 %

0.27 %

0.17 %

1.97 %

0.13 %

3.24 %

2.38 %

4.53 %

1.36 %

0.98 %

0.58 %

0.30 %

3.41 %

4.18 %

7.76 %

100 %

Note: According to the Commission, the increase in expenditure in 2014 is largely (85 %) due to the inclusion of more renewable energy schemes 
in the reporting. Without this inclusion, State aid reported would have amounted to around 73 billion euro in 2014. In addition, EU funds are 
included only from 2014.

Source: European Court of Auditors, based on the Commission’s 2015 State aid scoreboard.

 
Annexes 

68

Results of the monitoring exercises carried out by the Directorate-General for 
Competition, 2006-2014

I
I
x
e
n
n
A

Number of schemes monitored

Number of problematic cases

Ratio of problematic cases

Block-exempted aid

Authorised aid

Other 

Services of general economic 
interest

121 (of which 26 in 2014)

166 (of which 42 in 2014

1 (of which 0 in 2014)

8 (of which 7 in 2014)

31

53

1

4

26 %

32 %

100 %

50 %

Total

Broadband

Culture

Employment

Environment and energy

Other horizontal

Regional development

Research and Development

Risk capital

Sectoral development

SMEs

Training

Transport

Rescue & Restructure

Services of general economic 
interest

Other

296 (of which 75 in 2014)

89 (of which 27 in 2014)

30 % (36 % in 2014)

7

11

15

45

2

64

47

10

5

31

25

16

9

8

1

2

3

5

14

0

18

19

6

1

5

4

6

1

4

1

29 %

27 %

33 %

31 %

0 %

28 %

40 %

60 %

20 %

16 %

16 %

38 %

11 %

50 %

100 %

 
 
Annexes 

I
I
x
e
n
n
A

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

Source: European Commission.

69

Number of schemes monitored

Number of problematic cases

Ratio of problematic cases

15

4

10

5

26

4

11

11

21

29

28

4

3

4

4

9

3

13

11

17

9

6

4

5

4

7

29

7

1

3

1

3

1

1

6

5

10

6

1

1

2

2

1

1

6

4

4

6

1

1

0

1

0

15

47 %

25 %

30 %

20 %

12 %

25 %

9 %

55 %

24 %

34 %

21 %

25 %

33 %

50 %

50 %

11 %

33 %

46 %

36 %

24 %

67 %

17 %

25 %

0 %

25 %

0 %

52 %

 
 
Annexes 

70

I
I
I
x
e
n
n
A

Major projects adopted by the Directorate-General for Regional and Urban Policy for 
the 2007-2013 programme period

Member State

Number of major pro-
jects adopted 

Proportion of major 
projects adopted 

Average EU contribu-
tion per major project 
approved  
(in million euro)

Total EU contribution to 
major projects approved  
(in million euro)

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Croatia

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

Total

0

18

49

0

44

9

3

59

70

36

12

3

10

10

0

51

7

0

1

274

39

100

16

33

0

0

13

918

0.0 %

2.0 %

5.3 %

0.0 %

4.8 %

1.0 %

0.3 %

6.4 %

7.6 %

3.9 %

1.3 %

0.3 %

1.1 %

1.1 %

0.0 %

5.6 %

0.8 %

0.0 %

0.1 %

29.8 %

4.2 %

10.9 %

1.7 %

3.6 %

0.0 %

0.0 %

1.4 %

100.0 %

-

108.8

89.5

-

41.6

50.8

24.8

105.6

83.6

28.8

39.2

34.0

70.3

49.7

-

114.7

40.9

-

4.1

98.6

47.5

80.4

58.2

79.8

-

-

38.6

82.6

0.0

1 958.4

4 387.8

0.0

1 830.3

457.3

74.5

6 228.4

5 852.3

1 035.7

470.3

102.0

702.7

496.5

0.0

5 849.2

286.3

0.0

4.1

27 022.9

1 852.0

8 044.4

931.1

2 634.8

0.0

0.0

501.2

75 790.3

Source: European Court of Auditors, based on Commission data.

 
Annexes 

71

V

I
x
e
n
n
A

Legal framework in the area of State aid

TFEU – The Treaty lays the foundation of all State aid rules in Articles 107 to 109. The Treaty has the highest legal 
standing and all other legislation must be in conformity with its provisions. Articles 108(4) and 109 provide for 
the adoption of Regulations in the area of State aid. 

Case law – Judgments from the Court of Justice which interpret the provisions of the Treaty and secondary law. 
The judgments of the Court of Justice are binding on the Commission and on Member States. The Commission 
must adapt its approach to the judgments of the Court.

Regulations – Regulations are acts of secondary law adopted by the institutions. They have general applica‑
tion, are binding in their entirety and directly applicable in Member States on the date of their entry into force 
(without requiring separate incorporation into national law)1. The most important Regulation in the area of State 
aid is the GBER. 

Soft law

Guidelines – Guidelines are soft law which lack legally binding force but may have legal effects. The Court of 
Justice has in the past annulled Commission Decisions because they failed to comply with soft law. Guidelines 
set out criteria by which the Commission will assess the compatibility with the internal market of notified aid 
measures. The Commission is likely to consider notified aid measures which do not abide by the criteria set out 
in the guidelines to be incompatible. Guidelines exist at horizontal level (for example: guidelines on research, 
development and innovation) and at sectoral level (for example: guidelines on airports and airlines). 

Analytical grids – Guidance documents designed specifically to help Member States assess whether aid granted 
to infrastructure projects should be notified to the Commission.

1 

See Article 288 TFEU. 

 
Reply of the  
Commission

72

IV
The Commission closely and continuously works with audit authorities to improve their capacity as regards audit 
of State aid. Beyond targeted training, actions and guidance, it provided ready to use State aid checklists to audit 
authorities in 2011 and updated ones in November 2015.

The Regulation requires audit authorities to submit in their annual control reports (ACR) the principal results of the 
audits but not detailed information regarding the nature of errors identified. The Commission services’ reviews of 
the ACRs include an examination of the methodology for system audits and audits of operations (including check‑
lists) as well as re‑performing audits already done by Member States' audit authorities. Based on its reviews, the 
Commission considers that in some cases audit authorities may have detected State aid errors while reporting them 
under a different category, leading to a possible under‑reporting in the ACRs. But it has also identified weaknesses 
and requested the audit authorities to improve their controls on State aid issues. Finally, the Commission's own 
verifications have lately found significant improvements concerning the quality of State aid check lists used by audit 
authorities, in line with the Court’s assessment.

V
The Commission notes that both DG REGIO and DG EMPL have made use of databases to record audit findings 
under the 2007‑2013 financial period. While these databases were not intended to serve as tools for an analysis 
of sources of errors, this did not prevent the Commission from undertaking appropriate and preventive measures 
addressing the well‑known recurrent State aid issues. DG COMP shared in March 2016 its experience in ex‑post mon‑
itoring of State aid schemes with DG REGIO and DG EMPL. In particular, DG COMP provided the outcome of the 2015 
monitoring cycle to DG REGIO and DG EMPL. Moreover, the Commission is improving the exchange of information 
on errors in State aid between the Directorates‑General where and when needed.

As regards the preventive measures undertaken, DG REGIO and DG COMP implement since March 2015 a compre‑
hensive action plan for ‘Strengthening administrative capacity for the management of the Funds of Member States 
in the field of State aid’. For the 2014‑2020 programming period, the legislative framework introduces ex‑ante con‑
ditionalities on State aid with a view to improve some Member States' administrative capacity in this area through 
action plans, before programme implementation. 

VI
The Commission stresses that the obligation to notify State aid measures lies with the Member States and the 
decision on the major project is not a decision on compliance of the major project with State aid rules. In addition, 
Member States have to assess whether State aid is granted to projects or not, and, where they assess that State aid 
is granted, to demonstrate State aid compliance when they submit a major project proposal, regardless of which 
related decision‑making procedure is chosen under the Common Provisions Regulation.

DG COMP was consulted in formal inter‑service consultations by DG REGIO on major projects decisions already 
before the end of 2012, although not systematically. Internal cooperation with DG COMP on the approval of major 
projects was improved following the Leipzig‑Halle judgement. Appropriate checks and balances have been intro‑
duced as preventive measures to avoid that State Aid non‑compliant decisions are taken on major projects in 
2014‑2020.

Reply of the Commission 

73

The Commission therefore considers that the preventive measures and cooperation with DG COMP put in place for 
the 2014 to 2020 period both at project preparation stage and at project decision‑making stage appropriately miti‑
gate the risk mentioned by the Court.

Going further and trying to obtain legal certainty on State aid compliance through systematic formal notifications 
followed by a Commission State aid decision on all major projects (independently of legal requirements) would 
conflict with the State aid modernisation process but also with the overarching objective of simplification and 
reduction of administrative burden of all stakeholders, and would entail additional risk for timely implementation of 
ERDF/CF funded major projects.

VII
In the context of the State Aid Modernisation which increased Member States' responsibility in granting aid, DG 
COMP reinforced its sample based monitoring of implementation of State aid measures. DG COMP's monitoring 
targets errors and irregularities in the implementation of aid measures but serves also to learn how Member States 
actually implement aid measures in practice. This enables DG COMP to draw good and bad practices and to share 
them with the Member States (through the Member States' working groups, the country coordinators network etc.).

DG COMP further developed and shared with the Member States the General Block Exemption Regulation (GBER – 
Commission Regulation No 651/2014 of 17 June 2014) checklists to make it easier for them to check in advance that 
all applicable compatibility conditions are met. The GBER checklists are also shared with DG REGIO and DG EMPL 
and with Cohesion policy audit authorities.

Moreover, DG COMP offers a dedicated IT‑platform where it replies to Member States' interpretation questions 
(eState aid WIKI) and also publishes FAQ documents on the basis of those questions and replies.

As regards the assessment of ex‑ante conditionalities on State aid, as stipulated in the Common Provisions Regula‑
tion (CPR), it is to be based on the three criteria defined in the annex XI of the CPR. The compliance with State aid 
rules during the 2007‑2013 programming period is not a criterion for fulfilment as such. However the Commission 
will continue to monitor all issues related to compliance with State aid for all Member States and will take appropri‑
ate action as necessary.

VIII (a)
The Commission accepts the recommendation and considers that it is already implementing it.

It uses available corrective measures in case monitoring detects instances of non‑compliance with State aid rules. 

In this context, it is necessary to distinguish between illegality and incompatibility. An aid measure is illegal when 
granted without prior notification to the Commission and when not covered by GBER. The Commission, however, 
can only order recovery of such measure, if it is incompatible with the internal market (i.e. it cannot be found com‑
patible on the basis of any Guidelines or directly on the basis of the Treaty). 

If DG COMP's monitoring detects an illegal aid measure, it first examines whether such measure can be found com‑
patible with the internal market. 

Reply of the Commission 

74

Only if the error detected results into granting incompatible aid, corrective measures consisting in recovery of aid 
can be used.

For other types of errors, adjustment to the design of the scheme and/or to the control mechanisms is more appro‑
priate. For some errors, corrective measures would be difficult to achieve (e.g. the aid was incompatible at the 
moment when it was granted, but can be found compatible on the basis of the later revised rules).

VIII (b) (i)
The Commission accepts the recommendation and is already implementing it in its audit tool MAPAR.

MAPAR provides for a comprehensive database of all irregularities identified, including State aid errors. For State aid 
irregularities specifically, seven types of findings are defined for the time being in MAPAR. 

Moreover, MAPAR will allow to better structure the information on audit findings. It offers full flexibility to add 
or modify any category or sub‑category of findings, including for State aid ones, as per identified audit needs or 
findings. 

The MAPAR audit tool is also designed to allow the concerned Commission services following‑up all identified 
irregularities, including financial corrections.

VIII (b) (ii)
The Commission accepts the Court's recommendation and will adapt the typology of errors so that an analysis can 
be made.

VIII (b) (iii)
The Commission accepts the recommendation and is already implementing it. 

As far as MAPAR is concerned, DG EMPL and DG REGIO will communicate once a year the relevant data on State 
aid to DG COMP on the basis of a tailor‑made reporting (typologies of State aid findings evidenced by Commission 
audits). 

Regarding the exchange of information between the Commission services, DG REGIO, DG EMPL and DG COMP are 
increasing their communication channels to share information. DG EMPL and DG REGIO share results between each 
other and they consult DG COMP on audit issues related to State Aid when necessary.

As far as IMS is concerned, DG COMP will be granted access to information on a ‘need‑to‑know’ basis.

VIII (b) (iv)
The Commission accepts the recommendation.

Reply of the Commission 

75

It will follow‑up Member States' capacity to comply with State aid rule, based on the information available in its 
databases and stemming in particular from available audit findings. 

The Commission will use the results of the follow‑up exercise to better target its monitoring and training activities it 
offers to the concerned programme authorities in the Member States

VIII (c)
The Commission accepts the recommendation and has already implemented it since Member States have to dem‑
onstrate that they have thoroughly checked State aid compliance when they submit a major project proposal, 
regardless of which related decision‑making procedure is chosen under the Common Provisions Regulation, includ‑
ing through State aid notification where needed.

In case of State aid subject to a Commission decision, the Member State must wait until the State aid decision is 
approved by the Commission before submitting to the Commission the Major project application or the major pro‑
ject notification.

This is a preventive measure to avoid that State Aid non‑compliant decisions are taken on major projects in 
2014‑2020.

VIII (d) (i)
The Commission accepts the recommendation and has already implemented it.

The Commission examines the quality of the work of audit authorities with regards to State aid in different audit 
procedures: in the Commission’s risk‑based audits on the work performed by audit authorities, which include an 
examination of the methodology (including check‑lists) used by audit authorities for system audits and audits of 
operations; during re‑performance work on audits already done by audit authorities, to check the validity of the 
reported results; or during the review each year of Annual Control Reports submitted to the Commission by audit 
authorities, to confirm whether the audit authority’s opinion is solidly grounded on the basis of the results of sys‑
tem and operations audits.

In some cases, the Commission had already recommended to the audit authorities concerned, to reinforce their 
check‑lists to better cover the verification of State aid. The Commission will continue to ensure that audit authorities 
use appropriate checklists.

VIII (d) (ii)
The Commission does not accept the recommendation as it goes against the Commission's objective pursued 
through its guidance given to Member States in 2012 to not systematically re‑examine the projects decided before 
that date – leaving to the Member States the possibility to notify or not – and to provide stability to Member States 
and beneficiaries as regards the treatment of such projects.

Reply of the Commission 

76

VIII (d) (iii)
The Commission accepts the recommendation and is already implementing it. 

In the context of the implementation of the State aid action plan, the Commission already works on the basis of its 
State aid decisions which are used as case studies: for instance, over half of the programmes of the thematic semi‑
nars (RDI and Energy have taken place so far) is based on concrete cases (actual State aid decisions).

The Commission services provide also guidance in the form of grids, checklists or quick replies to interpretation 
questions submitted by aid granting authorities. The questions and answers serve as the basis for the publication of 
FAQ documents.

The Commission will continue to update the guidance material for all concerned authorities, including ESIF pro‑
gramme authorities, if developments require it.

Finally, the recently adopted Commission Notice of the Notion of aid provides guidance on when public spending 
falls within, and outside, the scope of EU State aid control.

VIII (d) (iv)
The Commission does not accept the recommendation since the de minimis Regulation leaves the choice to Member 
States whether to set up a central register for monitoring de minimis aid or to work on the basis of other means (e.g. 
self‑declarations by beneficiaries).

While a central register of de minimis aid is preferable, Article 6 of the de minimis Regulation does not oblige the 
Member State to have such register and allows implementing the cumulation rule with other means. Leaving the 
Member States the choice is in line with the general principle that Member States can decide on the most appro‑
priate administrative setting for their Member State. The Commission also noted the negative reaction of several 
Member States on the idea to have a mandatory de minimis register in the context of the first consultation for the 
revision of the de minimis Regulation. 

(http://ec.europa.eu/competition/consultations/2013_de_minimis/index_en.html).

VIII (d) (v)
The Commission does not accept the recommendation as it considers that the Deggendorf principle can only be 
applied at the level of an individual Member State. The Commission intends to clarify this point in the ongoing 
review of the 2014 GBER.

Should a Member State have doubts or face difficulties with identifying whether a certain undertaking is subject to 
an outstanding recovery order, it can approach DG COMP in the context of mutual cooperation.

VIII (e)
The Commission accepts this recommendation. 

The Directors‑General of the four European Structural and Investment Fund Directorates‑General meet already 
regularly in the ex‑ante conditionality suspension committee. The current approach which is both preventive (with 
the implementation of national action plans for non‑fulfilment of ex ante conditionality) and corrective (with sus‑
pension of payments when necessary), will continue to be applied strictly and consistently.

Reply of the Commission 

77

Common reply to paragraphs 34 to 36
The Commission has carefully followed‑up all State aid issues detected over the last years following the Court's and 
its own audit findings in this field and requested financial corrections from the concerned Member States and pro‑
grammes, whenever it deemed necessary (see paragraphs 50 and 51). 

The Commission notes nevertheless that as shown by the Court in table 2, the number of State aid errors detected 
in its samples has recently decreased. The number of errors with a financial impact decreased from 5 cases in 2013 
to 3 cases in 2014. The Commission expects this trend to continue also due to the application of the 2014 GBER 
(Regulation (EU) No 651/2014). 

Common reply to paragraphs 37 to 44 
The Commission agrees with the typology of errors in the area of State aid presented by the Court and also 
detected through its own audits (see paragraphs 47 and 48). Experience from past errors has led the Commission to 
clarify and simplify rules, in particular on the incentive effect in the 2014 GBER.

53
The Commission notes that, during the period covered by the Court’s report, the Commission’s State aid monitor‑
ing covered roughly 6% to 9% of total expenditure of State aid each year. A significant portion of schemes has been 
monitored at least once in their lifetime. 

55
Given the limited number of schemes monitored for individual Member States, the ratio of problematic cases 
should be related to the overall number of schemes monitored. For example, in case of Lithuania and Luxembourg, 
the 50% ratio of problematic cases is based on the monitoring of four schemes only (i.e. two out of four were found 
problematic). ‘Problematic’ is a term used by DG COMP to indicate infringements of State aid rules ranging from 
formal shortcomings such as incorrect formulation of cumulation rules to legal issues such as an absence of GBER 
conditions reflected in a GBER scheme.

56
DG COMP's monitoring resulted into several corrective measures including voluntary and imposed recovery of 
incompatible aid. 

Cases where voluntary recovery takes place are followed up by the Commission with the Member State concerned. 
No separate records are being kept of all cases of voluntary recovery. In some instances, recovery is not appropriate 
as the measure although illegal can be found compatible with the internal market, or because the measure once 
incompatible became compatible due to a later change in State aid rules.

In such cases, the Commission issues recommendations and eventually requests the Member States to change the 
design of the aid scheme if needed.

Reply of the Commission 

78

57
The Commission notes that both DG REGIO and DG EMPL have made use of databases to record their audit findings 
under the 2007‑2013 programming period. While these databases were not intended to serve as tools for an analysis 
of sources of errors, this did not prevent the Commission from undertaking appropriate and preventive measures 
addressing recurrent issues in the context of State aid, such as the SME bonus or incentive effect. 

For the 2014‑2020 programming period, the internal monitoring tool used by the Commission to follow‑up on its 
own audit findings has considerably improved with the introduction of a common IT tool to manage and monitor 
the audit process, called ‘MAPAR’ (Management of Audit Processes, Activities and Resources) for the ERDF, the CF 
and the ESF. 

In order to improve the information flow and analysis capacity of all concerned Commission services, DG EMPL and 
DG REGIO have agreed with DG COMP in mid‑2016 to annually communicate to DG COMP the relevant data on their 
State aid audit findings from now on. 

59
IMS is a tool dedicated to the irregularity (including fraud) reporting by Member States. The type of irregularity is 
indicated via drop‑down‑lists (codes) while the applied modus operandi is described in text which enriches the 
information provided through codified fields. Analysis can be performed on basis of the type of irregularity. IMS is 
not a State‑aid control instrument, but it is possible to add a specific typology for State aid to the already existing 
drop‑down‑lists.

61
The Commission notes that it did take preventive measures addressing recurrent State aid issues during the 2007‑
2013 period, notably as a result of regular exchanges between the relevant Commission services. The Commission 
DGs have for example been sharing audit reports since the beginning of the 2007‑2013 programming period. DG 
COMP is also consulted on audit issues related to State aid when necessary before finalising the audit conclusions. 

See also paragraph 60 and Commission reply to paragraph 57.

The Commission services agreed in March 2015 on a State aid action plan with specific targeted actions, based on 
lessons learned from available audit findings (see the Court's observation under paragraphs 108 to 110). 

In addition the legislative framework for the 2014‑2020 programming period adopted in December 2013 introduces 
an ex‑ante conditionality on State aid with a view to enhance the Member States’ capacity to comply with State aid 
rules ahead of programmes’ implementation. 

62
The Commission notes that the Vademecum refers to the transport sector. The Commission does not say that State 
aid rules are not applicable in that sector, but that instead of the general State aid rules, specific State aid (compati‑
bility) rules apply, pursuant to Article 93 TFEU. The statement in the Vademecum should not be understood to mean 
that the State aid qualification as such is different in the transport sector.

Reply of the Commission 

79

Common reply to paragraphs 69 to 71
The Commission notes that the obligation to notify State aid measures lies with the Member States and that the 
decision on the major project is not a decision on compliance of the major project with State aid rules.

A distinction needs to be made between the situation before the Leipzig –Halle judgment and after it and between 
the 2007‑2013 and the 2014‑2020 programming periods.

The Commission underlines that the DG COMP was consulted in formal inter‑service consultations by DG REGIO on 
major projects decisions already before the end of 2012, although not systematically.

Following the Leipzig‑Halle judgement, DG REGIO and DG COMP have enhanced their cooperation in relation to 
the assessment of major projects application. The Commission stresses that there is no major project for which the 
Commission adopted a decision approving ERDF or CF funding in recent years and for which subsequently a nega‑
tive decision under State aid rules was adopted. This shows that the cooperation arrangements put in place work 
well in practice.

For the 2014‑2020 period the Member State has to prepare a major project application in which it is required to 
demonstrate the compliance with State aid before submission to DG REGIO, regardless of which major project 
decision‑making procedure it is choosing (Article 102.1 or Article 102.2 of the CPR). In any event, if a State aid deci‑
sion is needed, it has to be adopted before the major project can be submitted to DG REGIO.

In addition to the enhanced cooperation referred to by the Court, an additional preventive measure has been put in 
place: the possibility for the Member State and IQR experts to contact DG COMP at project preparation level in case 
of doubts whether the respective major project needs to be the subject of a State Aid Notification procedure to DG 
COMP or not.

The Commission therefore considers that the current preventive measures and cooperation with DG COMP put in 
place for the 2014 to 2020 period both at project preparation stage and at project decision‑making stage appropri‑
ately mitigate the risk mentioned by the Court in paragraph 70.

Common reply to paragraphs 74 to 79
The Regulation requires audit authorities to submit in their annual control reports (ACR) the principal results of 
the audits but not detailed information regarding the nature of errors identified in the framework of the audits of 
operations. This can however be done on a voluntary basis. 

Moreover, based on its own reviews, the Commission considers that in some cases Audit authorities may have 
detected State aid errors while reporting them under a different category, such as non‑compliance with national 
eligibility rules, leading to a possible under‑reporting in the ACR. 

The Commission services are also continuously and closely working with audit authorities in order to increase their 
audit capacity on State aid issues through training, guidance and exchange of experience, including on the sharing 
of specific audit checklists which the Commission did in 2011 and again in 2015 with updated checklists. During the 
ACRs’ review, the Commission examines whether the audit authority’s opinion is solidly grounded on the basis of 
the results of system and operations audits.

Finally, the Commission's own verifications have found significant improvements concerning the quality of State aid 
check lists used by audit authorities, in line with the Court’s assessment (see paragraph 79).

Reply of the Commission 

80

Common reply to paragraphs 81 and 82
In recent years, the Commission services have stepped up their training support for Member States in a very con‑
siderable manner. First, they have organised or contributed to a significant number of seminars and workshops 
throughout the EU (for instance, they provided training on the GBER in most Member States, including to all audit 
authorities, see paragraph 111). In addition, they provide guidance in the form of grids, checklists or quick replies to 
interpretation questions submitted by aid granting or audit authorities.

The recently adopted Commission Notice on the Notion of aid also provides further guidance on when public 
spending falls within, and outside, the scope of EU State aid control. This guidance should help public authorities 
and companies to identify when public support measures can be granted without needing approval under EU State 
aid rules. 

The Commission services note the outcome of the survey conducted by the Court and the preference given, out of 
other possibilities, to a practical guidebook with case studies and additional training measures. In the field of State 
aid, the specific circumstances of a case play a significant role in its assessment. DG COMP considers that the Com‑
mission’s State aid decisions constitute the best examples for useful guidance for Member States.

The Commission will continue to support audit authorities and will encourage them to have increased contacts with 
State aid offices in the Member States.

Common reply to paragraphs 92 to 94
The main purpose of the 2014 review of the GBER was to further clarify and simplify State aid rules and to reduce 
the administrative burden on Member States. In particular, the extension of the scope of the GBER led to a consider‑
able reduction of the number of State aid measures to be notified to the Commission. This should also facilitate the 
implementation of ESIF operations. 

93
The GBER is about the need to notify. Its scope of application extends to measures that were not exempted from the 
obligation to notify before the entry into force of the GBER 2014. Those measures could have been declared com‑
patible after an assessment by the Commission also before the entry into force of the 2014 GBER.

96
The Commission considers that the Deggendorf principle can only be applied at the level of an individual Member 
State. The Commission intends to clarify this point in the ongoing review of the 2014 GBER.

Should a Member State have doubts or face difficulties with identifying whether a certain undertaking is subject to 
an outstanding recovery order, it can approach DG COMP in the context of mutual cooperation.

Common reply to paragraphs 102 to 104
Member States adopted action plans that must be implemented and completed by end 2016. This is thoroughly 
monitored by the Commission services (DG REGIO and DG COMP) and can eventually lead to suspension of pay‑
ments by the Commission in case of non‑fulfilment.

Reply of the Commission 

81

105
The Commission notes that the ex‑ante conditionalities concern the implementation of the European Structural and 
Investment Funds, while schemes monitored by DG COMP do not necessarily involve funding from ESI funds.

Also, as indicated by the Court the Common Provisions Regulation stipulates that the assessment of the ex‑ante 
conditionality on State aid is to be based on the three sub‑criteria defined in the Annex XI of the Common Provi‑
sions Regulation. The compliance with State aid rules during the 2007 – 2013 period is not a criterion for fulfilment 
as such. 

However the Commission will continue to monitor all issues related to compliance with State aid for all Member 
States and will take appropriate action as necessary. 

106
The procedure to approve major projects under the 2014 – 2020 period has improved compared to the previous 
period (see common reply to paragraphs 69 to 71). 

The Commission services are committed to undertake further efforts to streamline the treatment of major projects 
co‑financed by ESI Funds which are submitted via the new IQR procedure (Article 102.1 of the CPR). 

In this context, DG COMP has set up internal procedures to ensure the efficient and effective treatment of consulta‑
tions on major projects under the IQR procedure.

The IQR report should contain a comprehensive analysis on the aid character of the measure and/or on its compat‑
ibility on the basis of an exemption or an existing scheme. In addition, on the basis of Article 23 of the Commission 
Delegated Regulation 480/2014, IQR experts can contact DG COMP to clarify the State aid issues arising in a major 
project. 

Therefore also in this new IQR procedure, State aid issues notified to DG COMP have to be cleared before the major 
project documents can be submitted to the Commission.

107
The Commission underlines that Member States have to demonstrate that they have checked thoroughly State aid 
compliance when they submit a major project proposal, regardless of which related decision‑making procedure it is 
choosing (Article 102.1 or Article 102.2 of the CPR). Major project proposals cannot be submitted to the Commission 
without such a detailed assessment on State aid compliance.

Only projects with a positive IQR report can be notified to the Commission according to Article 102.1 of the CPR, 
which means all requirements have been complied with by the Member State, including the State aid related ones. 

The Commission services consider that the procedure can have a number of positive effects since it includes a more 
detailed State aid assessment by the Member State submitting the application and a more in‑depth verification of 
the State aid issues by the IQR team of independent experts. In addition, DG COMP has put in place arrangements to 
enable the IQR teams to consult it on State aid issues arising in a Major Project reviewed by them. 

Reply of the Commission 

82

Going further and trying to obtain legal certainty on State aid compliance through systematic formal notifications 
followed by a Commission State aid decision on all major projects (independently of legal requirements) would 
conflict with the State aid modernisation process but also with the overarching objective of simplification and 
reduction of administrative burden of all stakeholders, and would entail additional risk for timely implementation of 
ERDF/CF funded major projects.

114
The Commission is supporting Member States' ability to correctly interpret and/or implement the State aid rules 
since they are primarily responsible for taking the appropriate measures to comply with these rules.

In order to address deficiencies, the Commission services (at the level of the DG REGIO and DG COMP) are imple‑
menting a common action plan on ‘Strengthening Administrative Capacity for the Management of the Funds of 
Member States in the Field of State Aid’. Trainings were provided to several Member States and the target audience 
are all relevant bodies involved in management and implementation of ESI Funds – the Managing Authorities, the 
Intermediate Bodies as well as the main beneficiaries.

Furthermore, for the 2014‑2020 financial period, the Common Provisions Regulations foresees an ex‑ante condi‑
tionality related to State aid with the purpose to ensure ex‑ante conditions for effective application of EU State aid 
rules. For those Member States not fulfilling this ex‑ante conditionality, action plans have been set out that must be 
implemented and completed by end 2016. This is thoroughly monitored by the Commission services and can even‑
tually lead to suspension of payments by the Commission in case of non‑fulfilment.

114 (a)
The Commission closely and continuously works with audit authorities to improve their capacity as regards audit 
of State aid. Beyond targeted training, actions and guidance, it provided ready‑to‑use State aid checklists to audit 
authorities in 2011 and updated ones in November 2015.The Commission's own verifications have lately found 
significant improvements concerning the quality of State aid check lists used by audit authorities, in line with the 
Court’s assessment.

The Commission services’ reviews of the ACRs include an examination of the methodology for system audits and 
audits of operations (including check‑lists) as well as re‑performing audits already done by Member States' audit 
authorities. In such audits, the Commission services have identified weaknesses and requested the audit authorities 
to improve their controls on State aid issues.

114 (b)
The Commission notes that both DG REGIO and DG EMPL have made use of databases to record audit findings 
under the 2007‑2013 financial period. While these databases were not intended to serve as tools for an analysis 
of sources of errors, this did not prevent the Commission from undertaking appropriate and preventive measures 
addressing the well‑known recurrent State aid issues. DG COMP shared in March 2016 its experience in ex‑post mon‑
itoring of State aid schemes with DG REGIO and DG EMPL. In particular, DG COMP provided the outcome of the 2015 
monitoring cycle to DGs REGIO and EMPL. Moreover, the Commission is improving the exchange of information on 
errors in State aid between the Directorates‑General where and when needed.

As regards the preventive measures undertaken, the legislative framework for the 2014‑2020 programming period 
introduces ex‑ante conditionalities on State aid. 

Reply of the Commission 

83

In addition, the DGs REGIO and COMP are implementing a comprehensive action plan since March 2015 for 
strengthening administrative capacity for the management of Structural Funds in the field of State aid.

See also Commission replies to paragraphs 57 and 61.

114 (c)
The Commission stresses that the ex‑ante obligation to notify State aid measures lies with the Member States and 
the decision on the major project is not a decision on compliance of the major project with State aid rules.

DG COMP was consulted in formal inter‑service consultations by DG REGIO on major projects decisions already 
before the end of 2012, although not systematically. 

Appropriate checks and balances have been introduced, in the major projects information requirements and in 
both decision‑making procedures concerning major projects (Article 102.1 and Article 102.2 of the CPR), as preven‑
tive measures to avoid that State Aid non‑compliant decisions are taken on major projects in 2014‑2020.

See also Commission reply to paragraph 69. 

114 (d)
In the context of the State Aid Modernisation which increased Member States' responsibility in granting aid, DG 
COMP reinforced its sample based monitoring of implementation of State aid measures. DG COMP's monitoring 
targets errors and irregularities in the implementation of aid measures but serves also to learn how Member States 
actually implement aid measures in practice which enables DG COMP to draw good and bad practices.

DG COMP shares with the Member States (through the Member States' working groups, the country coordinators 
network etc.) the experience and lessons learned from monitoring.

DG COMP further developed and shared with the Member States the General Block Exemption Regulation (GBER – 
Commission Regulation No 651/2014 of 17 June 2014) checklists to make it easier for them to check in advance that 
all applicable compatibility conditions are met. The GBER checklists are also shared with DG REGIO and DG EMPL 
and with Cohesion Policy audit authorities.

Moreover, DG COMP offers a dedicated IT‑platform where it replies to Member States' interpretation questions 
(eState aid WIKI) and also publishes FAQ documents on the basis of those questions and replies.

As regards the assessment of ex‑ante conditionalities on State aid, as stipulated in the CPR, it is to be based on the 
three criteria defined in the annex XI of the CPR. The compliance with State aid rules during the 2007‑2013 program‑
ming period is not a criterion for fulfilment as such.

However, the Commission will continue to monitor issues related to compliance with State aid for all Member States 
and will take appropriate action as necessary.

117
DG COMP considers that it properly uses available corrective measures in case monitoring detects incompliance 
with State aid rules. 

Reply of the Commission 

84

The Commission can only use corrective measures consisting in voluntary or imposed recovery if the aid granted is 
incompatible with the internal market. 

For other types of errors, adjustment to the design of the scheme and/or to the control mechanisms is more appro‑
priate. For some errors, corrective measures would be difficult to achieve (e.g. the aid was incompatible at the 
moment when it was granted, but can be found compatible on the basis of later revised rules). In any event recom‑
mendations are given to the Member State and where appropriate re‑monitoring of the scheme is envisaged after 
a while to verify that recommendations have been implemented.

Cases where voluntary recovery takes place are followed up by the Commission with the Member State concerned. 
No separate records are being kept of all cases of voluntary recovery. However, the Commission considers recovery 
of incompatible aid voluntarily implemented by Member States to be a useful tool to swiftly and effectively remove 
the unfair advantage from the market and to incentivise Member States not to grant unlawful aid.

Recommendation 1
The Commission accepts the recommendation and considers that it is already implementing it.

It uses available corrective measures in case monitoring detects instances of non‑compliance with State aid rules. 

In this context, it is necessary to distinguish between illegality and incompatibility. An aid measure is illegal when 
granted without prior notification to the Commission and when not covered by GBER. The Commission, however, 
can only order recovery of such measure, if it is incompatible with the internal market (i.e. it cannot be found com‑
patible on the basis of any Guidelines or directly on the basis of the Treaty). 

If the DG COMP's monitoring detects an illegal aid measure, it first examines whether such measure can be found 
compatible with the internal market. 

Only if the error detected results into granting of incompatible aid, corrective measures consisting in recovery of aid 
can be used.

For other types of errors, adjustment to the design of the scheme and/or to the control mechanisms is more appro‑
priate. For some errors, corrective measures would be difficult to achieve (e.g. the aid was incompatible at the 
moment when it was granted, but can be found compatible on the basis of the later revised rules). 

118
The Commission notes that both DG REGIO and DG EMPL have made use of databases to record their audit findings 
under the 2007‑2013 financial period. While these databases were not intended to serve as tools for an analysis of 
sources of errors, this did not prevent the Commission from identifying the recurrent types of errors in this area and 
to implement concrete and targeted measures to prevent State aid errors. 

See also Commission replies to paragraphs 57 and 61.

Reply of the Commission 

85

119
DGs REGIO and EMPL will be able to provide more detailed overview of the type of irregularities on the basis of its IT 
audit tool MAPAR, which covers the 2014‑2020 programme period for ERDF/CF and ESF. One objective of the MAPAR 
tool is to register and classify identified errors and irregularities, thus providing a database of detailed audit find‑
ings. Also, in the context of the continuous dialogue with audit authorities, the Commission services will continue to 
work with Member States to develop a common typology of State aid errors, which will be based on and reflected 
in MAPAR. 

In addition, this tailor made reporting on the typologies of errors introduced in MAPAR will enable DG REGIO and 
DG EMPL to transmit to DG COMP on a yearly basis the relevant data on their State aid audit findings. 

See also Commission replies to paragraphs 57, 59 and 61.

120
IMS is a tool dedicated to the irregularity (including fraud) reporting by Member States. The type of irregularity is 
indicated via drop‑down‑lists (codes) while the applied modus operandi is described in text which enriches the 
information provided through codified fields. Analysis can be performed on basis of the type of irregularity. IMS is 
not a State‑aid control instrument, but it is possible to add a specific typology for State aid to the already existing 
drop‑down‑lists. 

Recommendation 2 (a)
The Commission accepts the recommendation and is already implementing it in its audit tool MAPAR.

MAPAR provides for a comprehensive database of all irregularities identified, including State aid errors. For the 
reporting of State aid irregularities specifically, seven types of findings are defined for the time being in MAPAR. 

Moreover, MAPAR will allow to better structure the information on audit findings. It offers full flexibility to add 
or modify any category or sub‑category of findings, including for State aid ones, as per identified audit needs or 
findings. 

The MAPAR audit tool is also designed to allow to the concerned Commission services the follow‑up of all identified 
irregularities, including financial corrections.

The Commission also refers to its reply to paragraph 57. 

Recommendation 2 (b)
The Commission accepts the Court's recommendation and will adapt the typology of errors so that the analysis can 
be made.

Reply of the Commission 

86

Recommendation 2 (c)
The Commission accepts the recommendation and is already implementing it. 

As far as MAPAR is concerned, DG EMPL and DG REGIO will communicate once a year the relevant data on State 
aid to DG COMP on the basis of a tailor‑made reporting (typologies of State aid findings evidenced by Commission 
audits). 

Regarding the exchange of information between the Commission services, DG REGIO, DG EMPL and DG COMP are 
increasing their communication channels to share information. DG EMPL and DG REGIO share results between each 
other and they consult DG COMP on audit issues related to State Aid when necessary.

As far as IMS is concerned, DG COMP will be granted access to information on a ‘need‑to‑know’ basis.

Common reply to paragraphs 121 and 122
The Commission stresses that the ex‑ante obligation to notify State aid measures lies with the Member States and 
the decision on the major project is not a decision on compliance of the major project with State aid rules.

DG COMP was consulted in formal inter‑service consultations by DG REGIO on major projects decisions before the 
end of 2012, although not systematically. 

The Commission put in place preventive measures and enhanced the cooperation between its services to ensure 
that in the programming period 2014‑2020, only major projects compliant with the new State‑aid related legislation 
are presented by the Member State and decided by the Commission.

Going further and trying to obtain legal certainty through formal State aid notifications on all major projects would 
conflict not only with the State Aid Modernisation process but also with the overarching objective of simplification 
and reduction of administrative burden of all stakeholders, and would entail further risk for timely implementation 
of ERDF/CF funded major projects. 

See also Commission replies to paragraphs 69, 107 and 114 (c).

Recommendation 3
The Commission accepts the recommendation and has already implemented it since Member States can only sub‑
mit to the Commission a major project proposal when all State aid compliance issues have been cleared, including 
through State aid notification where needed. 

The Commission also enhanced the cooperation between its services to ensure that in the 2014‑2020 program‑
ming period only major projects for which Member States have thoroughly assessed compliance with the recently 
updated State‑aid related legislation are presented by the Member States and decided by the Commission. 

123
The 2007 ‑ 2013 regulatory framework requires audit authorities to submit in their annual control reports (ACR) the 
principal results of the audits but not detailed information regarding the nature of errors identified in the frame‑
work of the audits of operations. This can however be done on a voluntary basis. Therefore information communi‑
cated by audit authorities may understate their capacity to detect State aid.

Reply of the Commission 

87

The Commission services are also continuously and closely working with audit authorities in order to increase their 
audit capacity on State aid issues through training, guidance and exchange of experience, including on the sharing 
of specific audit checklists which the Commission did in 2011 and again in 2015. 

Finally, the Commission's own verifications have found significant improvements concerning the quality of State aid 
check lists used by audit authorities, in line with the Court’s assessment (see paragraph 79).

124
The Commission services have already shared with Member States audit and coordination bodies the GBER Check‑
lists enabling them to check in advance whether all compatibility conditions are fulfilled or to improve audits in this 
area. Typology of problems detected, good and bad practices and lessons learned from monitoring are also shared 
with Member States in different ways (working groups, country coordination network, multilateral or bilateral audit 
coordination meetings, etc.). Interpretation of State aid rules is further provided by the system of interpretative 
questions (eState aid Wiki), by analytical grids etc.

The Commission considers that the Deggendorf principle can only be applied at the level of an individual Member 
State. The Commission intends to clarify this point in the ongoing review of GBER 2014.

Should a Member State have doubts or face difficulties with identifying whether a certain undertaking is subject to 
an outstanding recovery order, it can approach DG COMP in the context of mutual cooperation.

Recommendation 4 (a)
The Commission accepts the recommendation and has already implemented it.

The Commission examines the quality of the work of audit authorities with regards to State aid in different audit 
procedures: in the Commission’s risk‑based audits on the work performed by audit authorities, which include an 
examination of the methodology (including check‑lists) used by audit authorities for system audits and audits of 
operations; during re‑performance work on audits already done by audit authorities, to check the validity of the 
reported results; or during the review each year of Annual Control Reports submitted to the Commission by audit 
authorities, to confirm whether the audit authority’s opinion is solidly grounded on the basis of the results of sys‑
tem and operations audits.

In some cases, the Commission had already recommended to the audit authorities concerned, to reinforce their 
check‑lists to better cover the verification of State aid. The Commission will continue to ensure that audit authorities 
use appropriate checklists.

Recommendation 4 (b)
The Commission does not accept the recommendation as it goes against the Commission's objectives pursued 
through its guidance given to Member States in 2012 to not systematically re‑examine the projects decided before 
that date – leaving it to Member States the possibility to notify or not ‑ and to provide stability to Member States 
and beneficiaries as regards the treatment of such projects.

Reply of the Commission 

88

Recommendation 4 (c)
The Commission accepts the recommendation and is already implementing it. 

In the context of the implementation of the State aid action plan, the Commission already works on the basis of its 
State aid decisions which are used as case studies: for instance, over half of the programmes of the thematic semi‑
nars (RDI and Energy have taken place so far) is based on concrete cases (actual State aid decisions).

The Commission services provide also guidance in the form of grids, checklists or quick replies to interpretation 
questions submitted by aid granting authorities. The questions and answers serve as the basis for the publication of 
FAQ documents.

The Commission will continue to update the guidance material for all concerned authorities, including ESIF pro‑
gramme authorities, if developments require it.

Finally, the recently adopted Commission Notice of the Notion of aid provides guidance on when public spending 
falls within, and outside, the scope of EU State aid control.

Recommendation 4 (d)
The Commission does not accept the recommendation since the de minimis Regulation leaves the choice to Member 
States whether to set up a central register for monitoring de minimis aid or to work on the basis of other means (e.g. 
self‑declarations by beneficiaries).

While a central register of de minimis aid is preferable, Article 6 of the de minimis Regulation does not oblige the 
Member State to have such register and allows implementing the cumulation rule with other means (e.g. on the 
basis of self‑declarations by the beneficiaries). Leaving to the Member States the choice is in line with the general 
principle that Member States can decide on the most appropriate administrative setting for them. The Commission 
also noted the negative reaction of several Member States on the idea to have a mandatory de minimis register in 
the context of the first consultation on the revision of the de minimis Regulation. (http://ec.europa.eu/competition/
consultations/2013_de_minimis/index_en.html).

Recommendation 4 (e)
The Commission does not accept the recommendation as it considers that the Deggendorf principle can only be 
applied at the level of an individual Member State. The Commission intends to clarify this point in the ongoing 
review of the GBER 2014.

Should a Member State have doubts or face difficulties with identifying whether a certain undertaking is subject to 
an outstanding recovery order, it can approach DG COMP in the context of mutual cooperation.

129
As regards the assessment of ex‑ante conditionalities on State aid, as stipulated in the Common Provisions Regula‑
tion (CPR), it is to be based on the three criteria defined in the annex XI of the CPR. The compliance with State aid 
rules during the 2007‑2013 programming period is not a criterion for fulfilment as such.

However the Commission will continue to monitor all issues related to compliance with State aid for all Member 
States and will take appropriate action as necessary.

Reply of the Commission 

89

Recommendation 5 (a)
The Commission accepts this recommendation. 

The Directors‑General of the four European Structural and Investment Fund Directorates‑General meet already 
regularly in the ex‑ante conditionality suspension committee. The current approach which is both preventive (with 
the implementation of national action plans for non‑fulfilment of ex ante conditionality) and corrective (with sus‑
pension of payments when necessary), will continue to be applied strictly and consistently. 

Recommendation 5 (b)
The Commission accepts the recommendation.

It accepts to follow‑up Member States' capacity to comply with State aid rule, based on the information available in 
its databases and stemming in particular from available audit findings. 

The Commission will use the results of the follow‑up exercise to better target its monitoring and training activities it 
offers to the concerned programme authorities in the Member States.

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Event

Adoption of the Audit Planning Memorandum/Start of audit

Official sending of draft report to Commission (or other auditee)

Adoption of the final report after the adversarial procedure

Commission’s (or other auditee’s) official replies received in all languages

Date

12.11.2014

16.6.2016

7.9.2016

27.9.2016

 
Over the past several years the Court of Auditors found 
a significant level of non-compliance with State aid rules in 
cohesion policy. The Court of Auditors and the Commission 
detected infringements of State aid rules at a far higher rate 
than the Member States, pointing to a need for more 
awareness and continued Commission support. For the 
2007-2013 programme period, the Commission’s databases 
did not allow a proper analysis of State aid errors nor did its 
monitoring result in significant recovery of State aid. 
The Commission has taken actions to simplify the 
applicable State aid legislation and to promote Member 
States’ administrative capacity. Responsibility for 
implementation of State aid measures has been shifted to 
the Member States in the 2014-2020 programme period, 
which risks an increase in State aid errors. 

EUROPEAN
COURT
OF AUDITORS