New rules on state aid and business relocations 30-01-2006 The European Parliament urges the European Commission to rule out state aid
to businesses relocating within the EU. Under the proposed new regime, national
and local governments would no longer be allowed to provide state aid to
businesses relocating from one EU region to the other. The European Commission
recently drew up new regional state aid guidelines. The Commission has the
option of ignoring the recommendations since the European Parliament made them
on its own initiative.
Members of European Parliament (MEPs) recommend that the businesses
relocating within the EU should not be eligible for public aid from the host
country and should be ineligible for Structural Fund assistance or state aid for
a minimum period of seven years. European Commission proposals on EU cohesion
policy for 2007-2013 do not go so far as to bar companies relocating from
receiving Structural Fund assistance. They do, by contrast, provide for the
refunding of aid where companies that benefited relocate their activities within
seven years of receiving that aid. Ironically, an EU Council of Ministers
working group is in the final stages of examining the future Structural Fund
Regulations and is considering watering down the Commission's proposal to cut
the deadline to five years (which corresponds to the period currently enforced
through existing Regulations).
MEPs want to see a legal framework at EU level for demanding the repayment of
all public aid paid to businesses that relocate within 14 years of receiving
that aid. Conversely, MEPs also call for the new guidelines on state aid to
permit the granting of public aid in the event of major job losses due to
relocation, even if the region concerned is not normally eligible for such aid.
LinksSource: European Information ServiceSeveral member states to lose 50% of regional state aid coverage back |
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