22-02-2006

The Parliament’s report underlines the need for flexibility in the state aid system and calls for aid to be targeted at start-ups or new, innovative Small and Medium sized Enterprises. It also supports the adoption of a general block exemption regulation in the area of R&D. In addition, the report backs the Commission's proposal to review its guidelines on national regional aid and to invest more in infrastructure and horizontal aid in the EU's least-developed regions.

The report contains a number of more sectoral recommendations. It emphasises that state aid for R&D can enable member states to target shortcomings in the market and give industry an incentive to invest more in research. Regarding state support for services of general economic interest, Parliament says that this only counts as state aid when there is over-compensation. The report also backs a more rational approach to regional state aid, focusing on infrastructure investment and horizontal aid. While noting that environmental state aid can be crucial in achieving sustainable development, MEPs call for member states to reduce and ultimately stop state aid for purposes that actually encourage polluting production or consumption.

According to the report, total state aid granted in the EU each year amounts to almost 50% of the EU's annual budget. Poland and the Czech Republic allocated 2.76% of GDP to state aid in 2003, compared with 0.57% by France, 0.40% by Belgium, 0.30% by Luxembourg and 0.26% by the United Kingdom.