1. The new guidelines on regional State aid ('RAG') for 2014-2020
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2. Regional aid and EU cohesion policy
Other horizontal aid
(training, employment SME)
(€ 168 bn)*
Non-cofinanced State aid
Support to enterpise and innovation (€ bn)
Environment aid
(€ 91 bn)*
EU cohesion policy (€ 347 bn)
R&D&I aid
(€ 74bn)*
Regional aid
(€ 98 bn)*
Total State aid
(€ 360 bn)*
* estimates

3. Regional aid expenditure (2007-2011)
Significant proportion of all State aid:
0.11% of EU GDP (± € 67 bn)
Concentrated on most disadvantaged regions:
€ 57 bn in 'a' areas (more disadvantaged assisted areas)
€ 10 bn in 'c' areas (less disadvantaged assisted areas)
Tendency towards more aid being block-exempted:
40% (€ 26 bn) under block-exemption regulations (→ 50% in 2011)

4. Number of regional aid measures (2007-2012)
* Large investment projects (eligible costs > €50 m)

5. RAG part of State Aid Modernisation (SAM)
Commission Communication of May 2012: Main objectives:
More with less: support economic growth with constrained public budgets
Prioritisation: target enforcement on most distortive cases
Better control: simplify rules and streamline procedures
For RAG: Link with Europe 2020 and cohesion policy is crucial

6. RAG
Conditions under which State aid can be granted for the development of disadvantaged regions in the EU
Criteria for maps designing disadvantaged areas where regional can be granted
Legal basis: Articles 107(3)(a) and (c) TFEU
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7. Links between RAG and General Block Exemption Regulation (GBER)
New regional aid in GBER:
Multi-sectoral schemes
Transport aid schemes for outermost regions + sparsely populated areas
Operating aid schemes for outermost regions up to 10% of annual sales revenues or turnover
Other types of ad hoc aid (option in draft GBER)
Measures to be notified and assessed under RAG:
Individual aid > notification thresholds
Aid linked to relocation (closing down similar activities in the EEA in 2 years before or after)
Other types of ad hoc aid (if not block-exempted)
Sectoral schemes
Large schemes (annual budget > 0.01% of MS GDP + > € 100 million)

8. Sectoral scope and forum shopping
Excluded from RAG but covered by other guidelines:
Agriculture, forestry
Fisheries, aquaculture
Transport, incl. airports
Energy sector
Regional aid prohibited:
Steel
Synthetic fibres
No aid under GBER but notifiable under RAG:
Shipbuilding
Covered by RAG but with specific additional conditions (transparency, fair access):
R&D infrastructure
Broadband networks

9. Main changes
More emphasis on soundness of aid (necessity, proportionality, avoidance of distortions of competition)
Aid limited to 'extra costs'; generally lower aid intensities
Proceedings regarding infringements of Article 101/102 TFEU may be taken into account when assessing compatibility with Article 107(3) TFEU
No aid if it attracts an investment from a more disadvantaged region, or if an investment is relocated, or investment in a market with structural overcapacity
Transparency and evaluation requirements
Overall population coverage slightly increased; generous treatment of 'programme countries'

10. Aid to large enterprises (LEs)
In 'a' areas (more disadvantaged assisted areas), regional investment aid can be granted to SMEs and LEs
Economic studies and enforcement experience: serious doubts about incentive effect of aid to LEs
In 'c' areas (less disadvantaged assisted areas), regional investment aid can only be granted to LEs for aid that creates new economic activities in 'c' areas, or for the diversification of existing establishments into new products or new process innovations
In 'a' areas operating aid only to SMEs
Stricter treatment of LEs in 'c' areas but broader possibilities for Europe 2020 investments under other thematic guidelines

11. Medium-sized enterprises
Aid intensities
Assisted area
(% EU GDP/head)
Large enterprises
Medium-sized enterprises
Small enterprises
'a' areas (<45%)
50%
60%
70%
'a' areas (45%-60%)
35%
45%
55%
'a' areas (60%-75%)
25%
Former 'a' areas (until end 2017)
15%
Sparsely populated areas, external border areas
Non-predefined 'c' areas
10%
20%
30%

12. Notified individual awards
Objective of common interest: demonstration that aid contributes to regional development strategy
Appropriateness: aid instrument is appropriate
Incentive effect: formal requirements (start of the project after submission of application form); demonstration of the counterfactual scenario
Proportionality: net extra cost + cap (aid intensity on total costs)
Black list (negative effects outweigh any positive effects):
NO investment aid if it attracts an investment from a poorer region
NO investment aid if relocation of an investment due to the aid
NO investment aid if investment takes place on a market with structural overcapacity
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13. Assessment of schemes Objective of common interest:
Assumed for co-financed schemes
To be demonstrated for other schemes
Appropriateness: schemes are appropriate instrument
Incentive effect (formal requirements): start of the project after application for aid
For SMEs: application form
For large enterprises: application form +documentary evidence of the counterfactual
Credibility check by granting authority for SMEs + LEs
Proportionality: net extra cost + cap (aid intensity on total costs)
For SMEs: total costs + aid intensity
For large enterprises: net extra cost with a cap (aid intensity on total costs)
Limitation of negative effects: to ensure that aid is not attracting an investment from a poor(er) region (i.e. higher or same aid intensity as the target region)
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14. Transparency and evaluation
'Full recipient disclosure'  MS must publish on a central public website:
Aid scheme + implementing provisions
Name of the granting authority + individual beneficiary
Aid amount, aid intensity
Commission may limit the duration of largest, potentially most distortive schemes to 4 years and impose an evaluation before prolonging the scheme
Evaluations must be undertaken by an independent expert
Precise scope + methodology of evaluation to be defined in Commission decision limiting the duration of the scheme

15. Geographical scope ‒ regional aid maps
EU population coverage: 46.5% (→ 47.2%)
Regions with GDP <75% of EU average + outermost regions ('a' areas): 25.2%
Former 'a' areas + sparsely populated areas (predefined 'c' areas): 7.5%
Rest (non-predefined 'c' areas): 13.8%
Quota allocated among MS with formula combining EU and national disparities
Non-predefined 'c' areas designated by MS
MS benefitting from macro-financial assistance keep 100% of their current coverage

16. Total coverage per MS MS ‘a’ areas
Predefined ‘c’ (ex-'a '+ sparsely populated areas)
Non-predefined ‘c’ / safety net
Total [current situation]
Austria
25.8
25.8 [22.5]
Belgium
12.1
17.9
29.9 [25.9]
Bulgaria
100
100 [100]
Czech Republic
88.1
88.1 [88.6]
Cyprus
0 / 50
50 [50]
Denmark
8.0
8.0 [8.6]
Estonia
Finland
1.85
26.03 [33]
France
2.9
21.2
24.1 [18.4]
Germany
11.9
13.9
25.8 [29.6]
Greece
45.9
= 10.3
(23.4) / 43.8
Hungary
70.4
6.3+ 0
76.7 [100]
Ireland
51.28
51.28 [50]
Italy
29.0
5.0 +0
34.1 [34.1]
Latvia
Lithuania
Luxembourg
0 / 8
8 [16.0]
Netherlands
(4.3) / 7.5
7.5 [7.5]
Malta
Poland
86.3
13.7
Portugal
69.2
15.8
85 [76.7]
Romania
89.4
10.6
Slovakia
88.5
88.5 [88.9]
Slovenia
52.9
47.1
Sweden
12.3
12.3 [15.3]
Spain
6.8
= 28.8 33
68.6 [59.6]
United Kingdom
3.9
22.8
27.0 [23.9]
EU-27
25.2
= 7.4
14 / 0.6
47.2

17. Timing RAG: GBER: Adoption: 19 June 2013 Entry into force: 1 July 2014
Current RAG + maps extended until 30 June 2014
Transitory measures for MS
GBER:
Adoption: 1st semester 2014