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A new framework for the Regional Aid Guidelines

The actual framework for the Regional Aid Guidelines (RAG) will come to an end on December 31, 2013. The latter, effective since 2007, hasn’t been adapted neither to the new economic context nor to the previous and upcoming enlargements, and therefore would need a new lease of life!

As a reminder, the Regional Aid Guidelines, which are operating and investment aids given by public authorities to large corporations of SME, intend to support the European most disadvantaged regions and underprivileged development due to socio-economic situation, by means of investment and job creation.

As the Regional Aids participate to the economic development of disadvantaged territories and to and not competition, they benefit from derogations to the EU principle that national aid is incompatible with the common market (Article 87(3)(a) and (c) of the Treaty establishing the EC).

Fallowing the publication of the State Aid Modernisation (SAM) Strategy, by the Commission in May 2012, expected to support growth in the single market, by focusing scrutiny by the Commission on cases with the biggest impact on the internal market, streamlining rules and allowing faster decisions, the revision process started in January 2011, along with a workshop organized for all Member States.

The two rounds of public consultations, one in January 2012 and one in January 2013, allowed the Commission to publish on January 14th 2013 a first draft version of the new Guidelines.

However, if the Commission is due to adopt the new Guidelines in June 19th some significant criticisms linger, especially over some key questions as:
-The reduction of the budget suggested by the European Commission as regard to its new budgetary restriction policy
-The limitation of the AEFR to SME and therefore the prohibition of the aids for large companies (over certain zones covered by article 107 §3 c)
-The absence of a new individual category “areas in transition” (that should echo the Cohesion policy set for 2014-2020)
-The distribution methods of zone c) to be calculated on European average and not national average. In France, the last AEFR modification of te zoning came into effect on December 15, 2010, it then covered 15,5% of the French population.

Eventually, the Commission will have to be fast in the publication of its final decision, in order to allow all Member states to have sufficient time to identify the region most in need for the next programming period !


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