1. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY 1 Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey This project is co-financed by the European Union and the Republic of Turkey PROJECT DEVELOPMENT & APPRAISAL PART II “Project Development under IPA” 7 February 2013 Alberta Criscuolo – Senior State Aid Expert Presentation 2 Introduction to state aid (Continued)

2. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Project Development and Appraisal Part II 2 If it is State aid, then what ? HOW TO PROCEED ? 1 - DECIDE WHICH RULE SUITS BEST YOUR NEEDS 2 – READ THE RULE AND ADAPT YOUR INSTRUMENT TO THE STATE AID REGULATION, BEFORE ITS IMPLEMENTATION

3. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY 1 st option: DE MINIMIS. Within a period of 3 fiscal years, a single firm can be granted up to 200 000 Euros. Problems Problems: identifying the beneficiary; determining the moment of granting; the aid form (transparent aid); excluded sectors; aid above the threshold.

4. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY 50 000 € 25 000 € 75 000 € 15 000 € 2011 2012 2013 3 000 € 8 000 € 2 500 € 200 000 €

5. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY 1234560 200 000 €

6. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Project Development and Appraisal Part II 6 EXCLUDED SECTORS (valid also for General Block Exemption Regulation GBER) - Example of the AGRICULTURAL SECTOR “De minimis” rule does not apply to aid granted to: 1.undertakings active in the primary production of agricultural products as listed in Annex I to the Treaty; 2.undertakings active in the processing and marketing of agricultural products as listed in Annex I to the Treaty (that is any operation on an agricultural product resulting in a product which is also an agricultural product listed in Annex I) but only for those farm activities necessary for preparing an animal or plant product for the first sale and any activity preparing a product for such first sale.

7. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Beneficiary ObjectiveCostsIntensity Key Elements of the compatibility of the aid, outside de minimis rule

8. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY If the aid cannot be covered by the de minimis regulation, the second step is to “try” the General Block Exemption Regulation nº 800/2008. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:214:0003:0047:en:PDF How do I proceed to see whether I can apply the GBER ? a. Scope of application; b. Threshold; c. Always excluded ad hoc State aid to large firms.

9. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY The General Blcok Exemption Regulation concerns different types of aid: Regional aid (that is aid granted in “assisted region” which aims at the development of underdeveloped areas); Aid to SMEs (investment, consultancy, participation in fairs); Employment aid; training aid; R&D&I aid; environmental aid; risk capital aid.

10. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY The GBER is composed by 2 parts: 1. The rules valid for all types of aid: definitions and scope of application (mainly: sectors excluded); 2. Rules specific to every type of aid: size of beneficiary; eligible costs and aid intensity. Can I grant different types of aid to the same beneficiary? The problem of the proper and improper cumulation.

11. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Main problem: GBER is not clear. Member States are supposed to apply the Regulation by themselves, but the Commission discovered that in 90% of the cases they looked at, the national law was completely “wrong” in respect to the GBER rules. Let’s have a look at the text. Future developments.

12. This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY What if the aid measure does not fit into the GBER ? The Member State has to notify the aid to the European Commission, which will apply either the existing guidelines (e.g. Rescue aid) or the Treaty, on the basis of its previous decisions and the European Court of Justice (ECJ) cases. See for instance all the issue of the MARKET ECONOMY PRINCIPLE or the AID FOR CONSTRUCTION, USE AND OPERATION of INFRASTRUCTURE. Project Development and Appraisal Part II12