State aid is an instrument of European policy which is laid down in the founding Treaties of the European Communities. The objective of State aid control is to ensure that government interventions do not distort competition and intra community trade. State aid is defined as an advantage in any form whatsoever conferred on a selective basis to an undertaking by a national public authority.
Whilst the EC Treaty (the ‘Treaty’) pronounces a general prohibition on State aid there is a recognition that in some circumstances, government interventions are necessary for a well functioning and equitable economy. There are therefore a number of policy objectives for which State aid can be considered compatible.
The Commission aims at ensuring that all European companies operate on a level playing field, where competitive companies succeed. It ascertains that government interventions do not interfere with the smooth functioning of the internal market or harm the competitiveness of EU Companies.
The 'State aid rules' are set out by the European Commission and are outlined in Articles 87 – 88 of the Treaty. The rules have been amplified over the years by secondary legislation and court rulings.
State Aid must be considered in all funding provided by Advantage West Midlands or through one of the funding programmes which the Agency manages. Projects can be funded by designing out any aid or ensuring that any funding is provided within the State aid rules.
More information is available in the Related Documents and Related Links sections.
New temporary framework to tackle effects of the economic downturn
The European Commission has adopted, under EC Treaty state aid rules, a temporary framework providing Member States with additional possibilities to tackle the effects of the credit squeeze on the real economy.
The new framework introduces a number of temporary measures to allow Member States to address the exceptional difficulties of companies to obtain finance. In particular, Member States will be able to grant without notification of individual cases subsidised loans, loan guarantees at a reduced premium, risk capital for SMEs and direct aids of up to €500,000. All measures are limited until the end of 2010 and subject to conditions.
State Aid Workshop - Monday 19th January 2009
On 19th January 2009, over 70 partners from around the region attended an information event on State Aid. Hosted by Advantage West Midlands and delivered in partnership with Department for Business, Innovation and Skills (BIS) formerly BERR, guest speakers provided invaluable information on the general State Aid principles followed by a more detailed look into the new General Block Exemption regulation and the Services of General Economic Interest Framework. Attendees also gained the opportunity to obtain advice and put questions to representatives from the State Aid Branch of BIS.
The presentations made at the event are available to view from the Related Documents section.