1. RULES ON REGIONAL AID AND STATE AID FOR SMES
Klaus-Otto Junginger-Dittel
DG COMPETITION
Disclaimer: The views expressed are those of the author and cannot be regarded as stating an official position of the European Commission

2. Structural Funds, regional policy, SME support, and state aid rules (1)
- support to regional and SME development has always been a priority area for SF (ESIF) action;
- early support by state aid block exemptions
- SME BER 2001
- Employment BER (2003)
- Regional BER (2006)
- GBER 2008
=> GBER 2014: focus of my presentation

3. Structural Funds, regional policy, SME support, and state aid rules (2)
GBER 2014: for regional and SME aid: largelely reconduction of established policies/definitions
Some new elements: in particular:
- limitations to regional for large firms in c-areas
- anti-relocation rules in regional aid
- reorganisation of start-up
Changes above all outside block exempted areas: RAG , Common Assessment Principles

4. Changes in the roles of MS and COM, increasing importance of other actors
- Notified aid largely replaced by exempted aid.
- More responsibility to MS, Commission decision making replaced by guidance and partnership.
- More complaints by competitors, both to national courts and to Commission
- Stronger cooperation with national courts
- Increased interest by auditing bodies.

5. SCOPE OF PRESENTATION: Policy areas covered
• Regional investment aid : Articles 13 and 14 GBER 2014 • Investment aid to SMEs : Article 17 GBER • Aid for consultancy in favour of SMEs: Article 18 GBER • Aid to SMEs for participation in fairs: Article 19 GBER • Aid for cooperation costs incurred by SMEs participating in European Territorial Cooperation projects: Article 20 GBER • Aid for start-ups: Article 22 GBER

6. SCOPE OF PRESENTATION: Timeframe covered
Aid granted between 1 July 2014 and 31 December in application of GBER 2014: Article 59 GBER 2014
Individual aid granted between 1 January 2021 and 30 June 2021 in application of aid schemes – except regional aid schemes – that were exempted on 31 December 2020: Article 58(4) GBER 2014

7. SCOPE OF PRESENTATION: Provisions covered:
• Common provisions of GBER 2014: Chapter I
• Relevant specific provisions: Chapter III
• Excluded: Withdrawal of benefit, reporting, monitoring: Chapter II

8. CONDITIONS FOR EXEMPTION
Compatible and exempted from notification are: o aid schemes o individual aid granted in application of exempted aid schemes o ad hoc aid, provided that o all common provisions in Chapter I, and o all provisions specific for the aid at hand, as laid down in Chapter 3, are met.

9. SPECIAL PROVISIONS (CHAPTER III)
- eligible projects
- eligible firms
- eligible regions
- maximum aid intensities or aid or intervention amounts
- allowable forms of aid
- eligible type of aid measure (scheme, ad hoc aid)
- eligible expenditure
- maintenance of investment/posts
- own contribution.

10. Eligible projects, firms, and regions
Aid for SME investments, consultancy, and participation in fairs, and aid for start-ups is available for projects worldwide, regional aid only in assisted regions.
Large firms are eligible only in regional aid, start-up aid is open only to new small firms.
Investment aid has to adress initial investments, for large firms in c-areas initial investments for new economic activities.

11. Eligible forms of aid and maximum aid intensities/other limitations
Except start-up aid, aid has to be transparent.
For regional aid, the regional aid ceilings apply.
SME investment aid: 10% or 20%
Consultancy, participation in fairs, ETC: 50%
Start-up aid: maximum amounts of interventions (loans, guarantees, grants), variable, dependent of duration of loan/guarantee, status of region, and innovativeness of firm.

12. ELIGIBLE EXPENDITURE FOR REGIONAL INVESTMENT AID
Higher of (1) investment costs in tangible and intangible assets and (2) estimated wage costs arising from net job creation as result of investment over two years.
Assets have to be new, except for SMEs and for the acquisition of an establishment; additional posts created shall be filled within three years after completion of investment
Specific rules/limitations for
- leasing of tangible assets
- acquisition of assets of a closed/closing establishment
- intangible assets
- initial investment projects in form of a fundamental change of the production process, or the diversification of the output, of an existing establishment

13. ELIGIBLE EXPENDITURE for SME INVESTMENT AID
Either or both of (1) investment costs in tangible and intangible assets and (2) estimated wage costs arising from net job creation as result of investment over two years
Specific rules/limitations for
- acquisition of assets of a closed/closing establishment
- intangible assets
Additional posts created shall be filled within three years after completion of investment

14. ELIGIBLE EXPENDITURE OTHER MEASURES
SME consultancy aid: Costs of non-continuous or periodic consultancy services provided by external consultants. Services related to the undertaking's usual operating costs are excluded.
Aid for SME participation in fairs: Costs incurred for renting, setting up and running the stand  
SME ETC: Costs of organisational cooperation (staff, offices), non-continuous or periodic external advisory and support services, travel, equipment, investment, depreciation of tools and equipment . Only costs that are directly linked to the cooperation.
Start-up aid: Not defined  

15. MAINTENANCE AND OWN CONTRIBUTION
Regional investment aid:
- maintenance of the investment in the recipient area for at least five (SMEs: three) years after completion of investment
- if eligible costs include wage costs, maintenance of the posts created in the recipient area for at least five (SMEs: three) years after the post was first filled
- own contribution free of any public support aid of at least 25%
SME investment aid: maintenance of the employment directly created by an investment for at least three years after the post was first filled.
Other measures: none

16. KEY COMMON PROVISIONS
• Exclusions from scope of GBER: Articles 1(2) to (4)
• Notification thresholds: Article 4
• Transparency requirements as to the form of aid: Article 5
• Incentive effect: Article 6
• Aid intensity and eligible costs: Article 7
• Cumulation: Article 8
• Publication requirements: Article 9

17. EXCLUSIONS FROM SCOPE OF GBER
• large schemes
• export aid (MS/3rd countries);
• aid contingent upon use of domestic over imported goods
• aids for certain sectors (fishery, primary agricultural production, in specific cases processing/marketing of agricultural products), exceptions for certain types of aid
• aid for uncompetitive coal mines
• regional aid for steel, coal, shipbuilding, synthetic fibres, transport sector/infrastructure, energygeneration, distribution/infrastructure
• Deggendorf/ firms in difficulties
• aid measures that entail a non-severable violation of EU law

18. INDIVIDUAL NOTIFICATION THRESHOLD

19. TRANSPARENCY REQUIREMENTS
For the measures at hand (except start-up aid), only transparent forms of aid are authorised, i.e.:
o Grants and interest rate subsidies;
o Loans if GGE is calculated on basis of applicable reference rate;
o Guarantees if GGE is calculated on the basis of safe-harbour premiums, or a methodology approved ex ante ;
o Capped tax advantages;
o Repayable advances if their GGE is that of an outright grant, or calculated on the basis of a Commission approved methodology

20. Incentive effect requirement for automatic fiscal aid schemes
For all measures except start up aid: fiscal measure adopted and entered into force before works on aided project started; exception for successor schemes.
Start up aid: none

21. Incentive effect requirements for discretionary aid schemes
All measures, except start-up aid:
- aid application in writing before start of works
- aid application must contain certain mandatory elements
Start-up aid: none

22. Incentive effect provisions for ad hoc aid
All measures except start-up aid:
- aid application in writing before start of works
- for regional aid to large firms: verification by MS that without aid, the project would not have been carried out at all, or elsewhere.
Start-up aid: none

23. CALCULATION RULES FOR AID INTENSITIES AND ELIGIBLE EXPENDITURE
Eligible costs are to be supported by clear, specific, and documentary evidence.
Aid amounts are to be calculated as gross grant equivalents, before any deduction of tax or other charges,
Eligible costs/aid amounts are to be discounted to the date of grant.
The interest rate to be used for discounting is the discount rate applicable at the granting date (except: tax advantages in tranches) .

24. CUMULATION CONTROL (1)
Purpose: ensure that individual notification thresholds, maximum aid amounts or maximum aid intensities are not exceeded by a combination of support measures.
Centrally managed Union funding that is not directly or indirectly under the control of MS is not considered.
For verifying the respect of individual notification thresholds and maximum aid intensities, the total amount of state aid from all sources for the aided project, activity, or undertaking is taken into account.
de minimis aid addressing the same eligible costs is included for verifying that maximum aid intensities are respected.

25. CUMULATION CONTROL (2)
Exempted aid may be combined with any other aid for the same project or undertaking if the measures concern different identifiable eligible costs.
Exempted aid with identifiable costs may be combined with any other aid with overlapping eligible costs up to the highest aid amount or aid intensity allowable under the GBER.
Exempted aid without identifiable eligible costs may be combined with any other aid without identifiable eligible costs up to the highest relevant total financing threshold defined by a regulation or decision (special rule for aid for workers with disability).
Start-up aid may be combined with any other measure with identifiable eligible costs.

26. PUBLICATION AND INFORMATION
Publication on MS' central or regional transparency website of Summary information pursuant to Annex II (or link) for each exempted aid scheme/ad hoc aid put into effect/granted after , within six months (one year for fiscal aid). Publication of the full text (or link) of each measure: same deadlines. Publication of detailed information on individual aid awards exceeding EUR pursuant to Annex III (special rules for aid under Art. 16 and 21, and aid under fiscal aid schemes); same deadlines.

27. Preliminary Ruling in case C-493/14 ECJ of 21 July 2016 – Dilly's Wellnesshotel GmbH
Subject: Mandatory nature of the conditions for the exemption under GBER 2008 – considerations clearly transferable to GBER 2014 Questions by Austrian court: is aid scheme exempted that fails • to include reference to GBER in its national legal basis of the scheme • to submit summary information about aid measure exempted within 20 working days deadline • to publish (link to) full text of aid measure?

28. Preliminary Ruling in case C-493/14 ECJ of 21 July 2016 – Dilly's Wellnesshotel GmbH
Advocate general: "If all of the conditions for exemption are not satisfied, the obligation to notify remains." Considerations of ECJ: • "obligation to notify is one of the fundamental features of the system of control in the field of State aid" (recital 31); • "Regulation No 800/2008 [GBER 2008] and the conditions laid down by it must be interpreted strictly" (recital 37); • " (…) and simplifying administration, without weakening Commission monitoring (…) , the aim of such regulations is also to increase transparency and legal certainty" (recital 38) • "express reference to that regulation, (…), dos not amount to a mere formality, and is mandatory in nature of the competition rules regarding state aid (recital 51)