European Commission adopted Regulation No 800/2008 of 6 August 2008 that consolidates the former block Exemption Regulations (except the de minimis one). Through Block Exemption Regulations the Member States are able to grant whole categories of state aid without first notifying them to the European Commission. The General Block Exemption provides for a simpler and coordinated text that makes state aid control simpler and quicker.
State aid can be a real benefit to society, for example by improving the environment, encouraging research and development or allowing for increased training of the employees. However, State support can also have harmful effects: it can help inefficient firms stay on the market, which in the long run will lead to higher prices for consumers. Companies can also play off one government against another, threatening to move its investments to whichever country providing the largest subsidies.
State aid has to be notified to the Commission to ensure that it contributes to commonly agreed objectives. The Commission receives many hundreds of such notifications each year, many of which clearly aim at praiseworthy objectives.
The Commission wants to ensure that clearly compatible aid gets approved as quickly as possible. This new law (regulation) will automatically approve whole categories of aid, without the need for notifications. In practice, this implies that Member States can grant aid more quickly.
This reduces red tape for the Member State, the beneficiaries and for the Commission.
The law both simplifies the existing arrangements for automatic approvals(1), consolidating them into a single law. It also exempts new types of aid. The Commission has been allowed by the EU Council of Ministers(2) to adopt such types of regulations.
This provides simple and transparent rules for the beneficiaries and the Member States.
Among the different measures included in the regulation intending to ensure growth and jobs for European businesses and consumers, we can find:
The law has been adopted on 7 July and it will have direct effect. It should be published in the EU Official Journal in the course of July 2008 and enter into force 20 days later.
1) For a complete list of existing regulations click here
2) Regulation from the Council n. 994/1998.
[07 july 2008]
of DG COMP OFFICIAL SITE