State aid: Major revamping under way
By Sophie Mosca | Thursday 12 July 2012
The Cyprus EU Presidency will have to manage a heavy agenda in the field of competition, particularly on state aid, which is undergoing a major overhaul. It will probably also have to launch work on collective redress in the wake of the Commission’s presentation of its directive, set for the summer or early autumn.
The EU executive has launched an ambitious reform of state aid control to simplify the existing corpus of legislation and adapt it to promote innovation and growth. According to its communication of 8 May, the Commission plans to target its control on aid schemes having the greatest impact on the single market, encourage investments in research and development, promote the development of a greener economy and facilitate SME access to finance. The system of public aid for the broadband sector, for example, will be re-examined in December 2012.
This targeting implies closer scrutiny of aid packages in high amounts likely to cause distortions of competition. This means a revision of the 2006 de minimis regulation exempting certain schemes of less than €200,000 from the prior notification requirement. This will entail checking whether this threshold corresponds to market conditions. The revision includes a review and extension of the scope of the general block exemption regulation adopted in 2008 to encourage aid to priority growth sectors, and consequently possible changes to the Council enabling regulation under which the Commission can exempt certain categories of support. The Cyprus Presidency will have to steer negotiations by the 27 on this subject.
The revision aims to streamline control based on the common principles applied to the different codes in place. It comprises a simplification of the sector-based guidelines to make them compatible with the common principles. This will include, for example, a review of guidelines for aid to aviation or cinema by the end of 2012 so as to assess potential negative impacts more systematically.
The Presidency will have to organise the Council’s work on collective redress, a mechanism to allow complainants from the 27 to take grouped legal action to denounce the same damage resulting, for example, from infringement of competition rules. This measure, found in the Commission’s work programme for the third quarter of 2012, is sought by Parliament and consumer associations, but challenged by enterprises. There is strong pressure by the different parties and a draft directive will probably be presented during the latter half of the year, meaning the Cypriots will have to deal with this sensitive issue.