Humbert DRABBE Director, Cohesion, R&D&I and enforcement DG Competition Brussels, 6 March 2012 Session 2: Possible main elements of the modernisation package

Building-blocks: An integrated approach Partnership with MS Procedural matters Analysis of compatibility Block- exemption De minimis Notion of aid Foster growth Better prioritised enforcement Streamlined rules

Building-blocks: Proposed elements of the package Partnership with MS Procedural matters Analysis of compatibility Block-exemption of aid De minimis Notion of aid Reflection on modes of cooperation with MS Reform of the Procedural Regulation (+Implementing rules) Common principles, consolidation, review of major guidelines New Enabling Regulation and new General Block Exemption Regulation Reviewed de minimis Regulation Notice on the notion of aid

Notion of aid: Clarification Notion of State aid based on Treaty and extensive jurisprudence No ready-made answer but clarification is possible Distinction from general measures, Market Economy Investor Principle, definition of economic activity Constitutional elements of State aid: State resources, selective advantage, effect on trade and competition Will such clarification help you when designing and assessing subsidies?

Block exempted aid: Enlarge scope The rules which exempt certain categories of State aid from notification (block exemption) could be extended: by adapting the thresholds above which an aid needs to be notified by adding more categories that can be exempted from notification In which areas do you think such extensions could be useful? What is your experience with block-exemptions?

Compatibility: Common principles Proposal: Review and clarification of principles Proposal: Consolidation across guidelines start with Regional, R&D&I, Risk Capital and Environmental aid (75% of all aid) Proposal: Place greater emphasis on incentive effect Aim to speed up decisions Aim to avoid wasting public money

Compatibility: Common principles - a comparison with sound financial principles Public spending: sound financial principles Compatibility of State aid: common principles Purpose? Problem to solve?Market failure or equity objectives? What is the most appropriate instrument? Is State aid the appropriate instrument? Contribution to achieving the objective? Incentive effect? Adequate funding, no overfunding?Not more than necessary? (proportionality) Effect on market?Negative effects on trade and competition?

Compatibility: Common principles - your experience when designing policies What is the main focus of your state aid policies? How do you choose between different alternative instruments? State aid, regulation, taxes… Do you check if the aid gives an incentive to the beneficiary? Who checks it? How? How do you decide on the level of the aid? How do you limit the negative effects of the aid? What kind of effects of state aid are (potentially) the most negative in your view?

Integrated approach for notion of aid, block-exemptions, and guidelines / common principles In your view, does this set of proposals address the objective of State aid Modernisation? does this help to foster growth, better prioritise, and streamline the rules? Distinction between per se rules (GBER, standard rules) and detailed assessment What is the proper balance? Coherence between building-blocks

Envisaged timetable State aid Modernisation Communication Spring 2012 Guidelines (RAG, RCG, RDI, EAG), Common Principles, Notion of aid, GBER, de minimis Regulation End 2013 (adoption) Procedural and Enabling Regulations: 4 th quarter 2012 (COMM proposals) 2013 (adoption process in Council and EP)  Implementing Regulation and post-Enabling GBER