Polish undertakings in 2011 were granted as much as PLN 24.5 billion. How future guidelines by the European Commission for regional aid granted in the years 2014-2020 will affect domestic funds? Participants to the International State Aid Days, held by UOKiK in cooperation with the Danish Ministry of Business and Growth, tried to answer this question

The international conference State Aid Days was held by the Office of Competition and Consumer Protection in cooperation with the Danish Ministry of Business and Growth.

State aid constitutes funds granted by a state, given at more favourable than market terms and providing particular undertakings with a more privileged position than other market entities. The aid given inter alia by means of grants, benefits, tax concessions, is aimed at providing support to entrepreneurs of a given industry (sectoral aid), or less developed EU regions (regional aid). The latter one consists in equalizing the level of economic growth of particular member states by promoting investments, creating new vacancies, giving support to newly established small businesses and enhancing the economic activity. In 2010 the aid awarded to Polish entrepreneurs exceeded PLN 10 billion – almost half of all state aid funds given this year. For this reason UOKiK is concerned about the proposal of the EC aimed at decreasing the regional aid value in the perspective 2014-2020. These changes were discussed during International State Aid Days held by UOKiK.

According to draft proposal of the European Commission, in 1.5 year time the intensity of aid granted in EU would be significantly restricted. For example, at present the intensity of regional aid granted to large businesses in states with GDP (Gross Domestic Product, pl. PKB) below 75% of the EU average (Poland represents this group) is 30-50%, as compared to the latest proposal of the EC – it would be lowered to 25-35%. Small businesses of the same regions would be potentially provided with 45-55%, in contrast to 50-70% at present. The intensity of aid granted constitutes the rate of public funds in the total action value. Decreasing its value results inter alia in Polish undertakings obtaining less funds.

Furthermore, in Mazowieckie voivodeship the aid for large businesses would be restricted and made dependent on GDP. Poland, France, Germany, Hungary, Spain, Ireland, Latvia, Luxembourg, Portugal, Romania, Slovenia and the United Kingdom are opposed to the proposal of the EC regarding the exemption for large entities. At the beginning of May, they presented their common view on the matter before the Commission.

The new rules of the EC for regional aid are among the issues discussed during the meeting held by UOKiK on 29^th and 30^th May this year. Representatives of the European Commission, Hungarian, Danish, Dutch and Swedish state aid authorities were asked to participate in the debate.

Additionally, the invited guests consider inter alia the transparency and acceleration of procedures by the EC within state aid monitoring, as well as challenges in understanding and proper application of this concept. Małgorzata Krasnodębska-Tomkiel, the President of UOKiK, stated on starting the meeting that the financial and economic crisis that commenced nearly 4 years before, has seriously threatened the integrity of the internal market and has considerably increased the probability of anti-competitive practices by entrepreneurs. Still, the expectations were growing to make the states more involved in stimulating the economic growth.

Gert-Jan Koopman, a representative of the European Commission, said EU policies aim to overcome the crisis and pave the way to economic recovery, competiveness, employment and growth and added that the economic and financial crisis has changed the State aid landscape.

Preben Sanberg Pettersson fromthe Danish Ministry of Business and Growth emphasized the great singnificance of the event held by UOKiK - Such events such as these where we meet and exchange knowledge and experience on the latest development of state aid law and practice are important in order to help disseminate knowledge of state aid - and added that - state aid control is important to ensure well functioning competitive markets – a precondition for growth and competitiveness.

The international conference State Aid Days was held by the Office of Competition and Consumer Protection in cooperation with the Danish Ministry of Business and Growth. This event corresponds to a continuation of state aid meetings held by EU member states which assumed the Presidency in the EU Council.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 55 60 106
Fax: +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]

Presentations

• Presentation: Preben Sandberg Pettersson - Opening speech
• Presentation: Gert-Jan Koopman - Future development of state aid policy (presentation represents the views of the author)
• Presentation: Adinda Sinnaeve - The reform of the state aid rules applicable to compensation of Services of General Economic Interest (presentation represents the views of the author)
• Presentation: Kim Lundgaard Hansen - Economic Interest in transport - implementation of Regulation 1370/2007
• Presentation: Adinda Sinnaeve - The application of the concept of ”undertaking” and ”economic activity” and the application of Market Economic Investor test
• Presentation: Sylwia Ojdym - Cumulation of de minimis aid for entities with complex structure
• Presentation: Göran Grén - Application of state aid rules by local administration (e.g. sale of public land and property). How do Member States handle with legal assistance and control the conformity with the state aid provisions?
• Presentation: Paolo Cesarini - State Aid to R&D&I and cooperation between public research institutions and undertakings
• Presentation: Aleksandra Pruska - State Aid to R&D&I and cooperation between public research institutions and undertakings
• Presentation: Adam Leśniewski - State Aid to R&D&I and cooperation between public research institutions and undertakings
• Presentation: Conor Quigley - Present challenges of implementing the existing state aid rules and state aid jurisprudence relating to direct business taxation and charges
• Presentation: Eszter Hargita - Remarks on application of regional state aid policy in Hungary