State Aid Modernisation Package
Ramona IANUȘ
Country coordinator for Romania, DG Competition
Diana BARGLAZAN
Case Handler, DG Competition
1
Overview
1. Main objectives of SAM and role of
Member States
2. De Minimis
3. General Block Exemption Regulation
2
SAM – Main objectives
• Foster growth in a competitive internal market
• Facilitate the granting of “good aid” (Europe 2020)
• Discourage ineffective or counter-productive aid
• Focus enforcement on cases with biggest impact
• Less ex ante control of potentially less distortive
aid
• Emphasis on ex post monitoring, evaluation &
transparency
• Streamline rules and speed up decisions
• Simplification and harmonisation of rules
• Improvement of procedures
Impact 1: Facilitating 'good aid'
Notification
(guidelines/Treaty)
notified
(guidelines/Treaty)
•Notified aid
•Block-exempted
GBER extended (notification and intensity threshold)
Aid amount
•De minimis
Existing
GBER
GBER
extended
(new types and
categories)
GBER extension
De minimis
minimis
De
Type of aid
4
Impact 2: Stricter control of "bad aid"
Assessment of potentially more distortive types of aid on
the basis of "common assessment criteria":
• contribution to a well-defined objective of common
interest
• need for state intervention
• appropriateness of the aid measure
• incentive effect
• proportionality of the aid (aid limited to the
minimum necessary)
• avoidance of undue negative effects on
competition and trade between Member States
Impact 3: shift of Ex Ante control to Ex
Post control
• Smaller proportion of aid will be
scrutinised by EC
• Aid under GBER
• Awards under approved aid
schemes
• Shift from ex ante control to :
• Ex Post Evaluation
• Ex Post Monitoring
• Transparency
Impact 4: Ex Post - Evaluation
• Purpose:
Monitoring
Evaluati
on
Impleme
n-tation
Design
Assessment
and
approval
Improve quality of public
expenditure
• Scope: Large schemes
• Evaluation questions:
● Did the aid alter
behaviour of
beneficiaries?
● Were the objectives of
the aid achieved?
• Independent evaluator
Impact 5: Ex post - Monitoring
• Ex Post Monitoring since 2006
• 221 schemes monitored
• 28% of monitored schemes found to be
problematic
• Widening of GBER will be accompanied by increased
monitoring efforts
Impact 6: Ex Post - Transparency
• Purpose:
• Improve accountability of public spending
• Promote compliance (enables firms to verify
legality of aid granted to competitors)
• Publication on Central/Regional website of
• Full text of aid scheme or aid granting decision
• Identity of granting authority
• Info on individual aid awards > € 500,000:
Identity of beneficiary, aid amount, date of granting,
NUTS 3 region, NACE code
Impact 7: New Partnership with MS
• Extension of GBER  Increased responsibility for MS
• Implementation aid measures without ex ante
control by EC
• Need to ensure effective control at national level
• Strengthen EC-MS partnership
•
•
•
•
Country Coordinator Network in COMP
High level Country visits  Case Portfolio approach
Guidance on new rules
High Level Forum + Working Groups
• WG on SAM implementation (GBER, Best Practices…))
• WGs on specific topics (EEAG)
DE MINIMIS
Regulation 1407/2013
11
General
• Concept: de minimis aid does not constitute State aid: it is deemed too
small to affect trade or distort competition and thus not fulfilling all the
criteria of Article 107(1) TFEU
• Scope: (article 1): exclusion of:
 Certain sectors: fisheries, agriculture, coal, acquisition of road freight transport
vehicles granted to undertakings performing road freight transport for hire or
reward
 Export aid (directly linked to quantities exported, establishment and operation
of a distribution network or other current expenditure linked to export)
 Aid contingent upon the use of domestic over imported goods
12
Conditions: firms in difficulty
 New provisions are applicable to enterprises in difficulty:
 Enterprises in difficulty are no longer excluded from the scope of the de
minimis Regulation.
 However, the “safe harbours” for the calculation of the gross grant
equivalent (amount of State aid) included in guarantees and loans are
only applicable to enterprises that are in a position to repay such loans
in the meaning that:
• the beneficiary is not subject to collective insolvency proceedings
nor fulfils the criteria under its domestic law for being placed in
collective insolvency proceedings at the request of its creditors
• in case of large undertakings, the beneficiary is in a situation
comparable to a credit rating of at least B-.
13
Conditions: Amount of aid (Article 3)
 Ceiling: the total de minimis aid per undertaking does not exceed EUR 200 000 over
any period of three fiscal years (road transport: EUR 100 000)
 rolling period (current and previous two fiscal years before the date of
granting)
 date of granting: moment the legal right to receive the aid is conferred on
the undertaking under national law (≠ payment)
 if the ceiling is exceeded the whole amount cannot benefit from the
Regulation, not even the fraction below the ceiling
 per single undertaking
14
Conditions: Single undertaking
 The de minimis treshold applies per "single undertaking" (Article 2 (2)): Single undertaking
includes, for the purposes of the de minimis Regulation, all enterprises having at least one of
the following relationships with each other:
» (a) one enterprise has a majority of the shareholders’ or members’ voting rights in
another enterprise;
» (b) one enterprise has the right to appoint or remove a majority of the members of the
administrative, management or supervisory body of another enterprise;
» (c) one enterprise has the right to exercise a dominant influence over another enterprise
pursuant to a contract entered into with that enterprise or to a provision in its memorandum
or articles of association;
» (d) one enterprise, which is a shareholder in or member of another enterprise, controls
alone, pursuant to an agreement with other shareholders in or members of that enterprise,
a majority of shareholders’ or members’ voting rights in that enterprise.
 Clarification: Enterprises which have no relationship with each other except for the fact that
each of them has a direct link to the same public body or bodies are not treated as being linked
to each other and shall therefore not be considered as a "single undertaking" (Recital 4)
15
Conditions: Transparent aid
 Regulation applies only to de minimis aid for which it is possible to calculate precisely
the gross grant equivalent ex ante without any need to undertake a risk assessment
("transparent aid").
 Loans: 2 alternative calculation possibilities:
 New „Safe harbour“ thresholds:
 the loan is secured by collateral covering at least 50 % of the loan; and

the loan amounts to either EUR 1000000 over five years or EUR 500000
over 10 years; if a loan is for less than those amounts and/or is granted for
a shorter period, the gross grant equivalent of that loan shall be calculated
as a corresponding proportion of the ceiling
 the gross grant equivalent has been calculated on the basis of the reference
rate applicable at the time of the grant.
 Aid taking the form of equity or quasi-equity investments shall only be considered as
transparent de minimis aid if the capital provided to a single undertaking does not
exceed the de minimis ceiling.
16
Conditions: Transparent aid
 Guarantees: 3 alternative calculation possibilities:
• New „Safe harbour“ thresholds:
o the guarantee does not exceed 80 % of the underlying loan and
o the amount guaranteed is EUR 1500000 and the duration of the
guarantee is five years; or
o the amount guaranteed is EUR 750000 (or EUR 375000 for undertakings
performing road freight transport) and the duration of the guarantee is 10
years.
• the gross grant equivalent has been calculated on the basis of safe-harbour
premiums laid down in a Commission notice; or
• the methodology used to calculate the gross grant equivalent of the
guarantee has been notified and accepted by the Commission.
 Aid comprised in other instruments shall be considered as transparent de minimis aid
if the instrument provides for a cap ensuring that the relevant ceiling is not exceeded.
17
Conditions: Cumulation
 De minimis aid granted in accordance with this Regulation may be cumulated with de
minimis aid granted in accordance with other de minimis regulations up to the
highest applicable ceiling (e.g. SGEI).
 De minimis aid shall not be cumulated with State aid in relation to the same eligible
costs or with State aid for the same risk finance measure, if such cumulation would
exceed the highest relevant aid intensity or aid amount (fixed by a block exemption
regulation or a decision adopted by the Commission).
 Clarification: De minimis aid which is not granted for or attributable to specific
eligible costs may be cumulated with other State aid granted under a block
exemption regulation or a decision adopted by the Commission
18
Conditions: Monitoring: Central
Register or information requirement
 A central register of de minimis aid containing complete information on all de minimis
aid granted by any authority within that Member State for a period of at least three
fiscal years.
 Information requirement: the Member State shall inform the undertaking in writing of
the prospective amount of the aid expressed as a gross grant equivalent and of its
de minimis character, making express reference to the Regulation and citing its title
and publication reference in the Official Journal of the European Union. Before
granting the aid, the Member State shall obtain a declaration from the undertaking
concerned, in written or electronic form, about any other de minimis aid received
during the previous two fiscal years and the current fiscal year.
 Member States shall record and compile all the information regarding the application
of the de minimis Regulation and shall maintain them for a period of 10 fiscal years.
19
If not de minimis…
…. measures constitutes State aid under Art. 107(1) TFEU,
it can be
20
˗
block exempted under the General Block Exemption
Regulation (GBER): no need for notification; conditions are
defined in the GBER
˗
block exempted under the SGEI Decision: no need for
notification; conditions: SGEI, no overcompensation,
maximum EUR 15 mio per SGEI per year, but no limitation
for social SGEI
˗
Notified (either individually or under a scheme)
NEW!: Indirect de minimis measures
De minimis Regulation only applies at final recipient level!
 Compatibility/no aid at financial intermediary level needs to be ensured
A. No aid at the financial intermediary level
•
Open selection and all advantages passed on to final recipients (quantification
of the advantage is necessary)
•
Market-conform investments
•
De minimis aid
B. Compatible unquantified aid at the financial intermediary level
•
GBER (Article 21(18) - risk finance)
•
Risk Finance Guidelines
21
GENERAL BLOCK
EXEMPTION
REGULATION
Regulation 680/2014
22
The GBER 2014-2020
• The GBER 2014-2020 is a set of 43
exemptions that can be used to provide
effective and compliant State aid.
• Aid under GBER can be provided without
prior approval from the Commission.
• To use the GBER, the granting body must
publish a scheme on the internet and
complete an online form which goes to
the Commission.
23
New Aid Categories
• New block exemption includes:










Aid to make good the damage caused by certain natural disasters
Social aid for passenger transport
Aid for broadband infrastructures
Aid for culture and heritage conservation
Aid for audio-visual works
Aid for sport and multifunctional recreational infrastructures
Aid for innovation clusters
Aid for process or organisational innovation
Research infrastructures
Aid for local infrastructure
Use of the GBER
Use of GBER per Member States
General Provisions
(Articles 1-12 and 57-58)
27
When does GBER not apply?
 Certain types of aid excluded from GBER, such as:
•
•
•
•
•
•
Aid for export related activity
Some aid measures to the fishery and aquaculture sector
Some aid measures in the primary agricultural production sector
Aid to facilitate the closure of uncompetitive coal mines
Aid which entail a non-severable violation of Union law
Aid to undertakings in difficulty
28
Firms in difficulty
 Hard core criteria from R&R Guidelines enshrined in GBER

Limited liability companies: more than half of subscribed share capital has disappeared as
a result of accumulated losses

NB: it doesn’t matter when the losses have been created

Undertaking is subject to collective insolvency proceedings or fulfils the criteria under its
domestic law for being placed in collective insolvency proceedings at the request of its
creditors

Undertaking has received rescue aid and has not yet reimbursed the loan/guarantee or has
received restructuring aid and is still subject to the restructuring plan

Large companies that in past 2 years had:
 Book debt to equity ratio > 7.5 and
 EBITDA interest coverage ratio <1.0
29
Aid which entail a non-severable violation of Union law
 Not possible to oblige the beneficiary of the aid to:
• Have the headquarter in Romania or to be predominantly
established in Romania
• NB: possible to require an establishment or a branch in Romania at the moment of
payment of the aid NOT at the moment of submitting an aid application
• Use nationally produced goods or national services
• Exploit the results of RDI exclusively in Romania
30
When does GBER apply?
 When all conditions of GBER (general + specific provisions) are complied with
 Notification thresholds – GBER does not cover aid above the levels set out in
Article 4: such measures must be notified.
 NB: cumulation rules incl de minimis for same eligible costs
 Aid must be transparent (it is possible to calculate precisely the GGE of the aid ex
ante).
 NB: for loans and guarantees several possibilities to make the aid transparent (reference rate
communication or safe harbors in the guarantee communication or approved methodologies)
31
Incentive Effect
State aid should encourage the beneficiary
to undertake an activity in the common
interest.
SMEs + LEs aid under schemes - incentive
effect present if they have not started the
activity before applying for the aid.
In case of ad hoc aid to large enterprises –
additional documentation needed.
32
Transparency
• Publication of information on a Member
State / regional website
• Information on each scheme as well as
individual aid awards over €500,000
(special rules for tax schemes)
• Information must be published within 6
months from the date the aid was
granted (for tax schemes - within 1 year
from the date declaration is due)
33
Evaluation
• Concerns aid schemes in some aid
categories (regional, SMEs, R&D&I,
environment and broadband), with an
average annual budget over €150 million
• These schemes are covered by the GBER
for an initial period of 6 months
• Can be extended by the Commission upon
approval on an evaluation plan
(describing e.g. scope of evaluation,
result indicators, methods and timeline)
34