State aid evaluation Rodrigo PEDUZZI Unit A.3 State aid Strategy, DG Competition Evaluation Network meeting Brussels, 15 January 2015

State aid modernisation Launched in 2012, now essentially completed Comprehensive reform of State aid rules 3 objectives: Enhance effectiveness of aid, in line with Europe 2020 objectives, and limit distortions of trade and competition Prioritise enforcement on cases/schemes that have a significant impact on the internal market Simplification of rules

Most State aid is granted through schemes 87% of aid (in 2013) provided through schemes, either block-exempted or approved ex ante Very limited ex post assessment of impact Mostly formal rather than substantial assessment of incentive effect

Evaluation: 'Closing' the State aid cycle Objectives of State aid evaluation : Assessing whether the scheme was effective in achieving the direct objective for which it was introduced, (i.e. did it change the behaviour of the beneficiary, and to which extent?) Detecting possible indirect effects of the scheme (e.g. spill-over effects on the activity of other firms, general effects on regional growth, etc.); Addressing the issues of proportionality and appropriateness of the chosen aid instrument. Assessment and approval Design Evaluation Monitoring Implemen-tation did the public intervention work?”, “why and how did it work?”, “did the positive impacts outweigh the negative ones?”.

Opportunities and challenges Collect evidence on actual impact of State aid Contribute to a better informed decision-making, by the Member States and by the Commission Help allocate scarce resources more efficiently Need to facilitate ownership from Member States Ensure equal treatment and the necessary flexibility Implement evaluation for block-exempted schemes

Scope of evaluation In the GBER: Only for selected aid categories (e.g. regional aid). Only for large aid schemes, with an average annual budget exceeding €150 million (a handful each year). For such schemes, the exemption is limited to an initial period of six months following their entry into force. The Commission, under certain conditions, may extend this period upon approval of an evaluation plan. In the guidelines (Broadband, Regional, Risk finance, Aviation, R&D&I, Environment and Energy): Large aid schemes, novel schemes, schemes affected by significant markets, technology or regulatory changes

Evaluation plan - Content For schemes subject to evaluation, Member States have to notify to the Commission an evaluation plan, which should contain at least the following elements: Objectives of the aid scheme to be evaluated Evaluation questions Result indicators Envisaged methods Data collection Timeline The body conducting the evaluation (or the selection principles) Publicity of evaluation  Methodological guidance in Commission Staff Working Document: http://ec.europa.eu/competition/state_aid/modernisation/state_aid_evaluation_m ethodology_en.pdf

Implementation since July 2014 - Template for notification of evaluation plans - FAQ available on DG COMP website - First two decisions under GBER adopted in December (large regional aid schemes, UK and CZ) - Two other regional aid cases in the pipeline - New cases in other areas (R&D, energy, broadband) - Ongoing discussions with Member States - Exploring synergies (e.g. with ESIF experts) - Advocacy - Eventually, policy recommendations on future schemes and State aid rules