In 2016 EU State aid control completed the latest phase of its evolution. By end 2014, the Commission had largely finished its reform programme, the State aid modernisation initiative (SAM); the final element was its Communication on the ‘notion’ of State aid, which it adopted in May this year. SAM placed new emphasis on transparency, effectiveness and evaluation. It recast the basis for the assessment and compliance of State aid across a range of policy areas and further increased the ‘self-policing’ element of State aid discipline. The reform agenda has been wide-ranging, and few aspects of regional aid control were immune from change. The approval of all the assisted area maps by the European Commission or the EFTA Surveillance Authority under the 2014-20 Regional Aid Guidelines (RAG) provided the basis for the introduction of new aid schemes almost exclusively on the basis of the 2014-20 General Block Exemption Regulation (GBER).
As the current Regional Aid Guidelines approach the mid-point of their lifecycle, competition policy and regional aid relations have been rather quiescent. As anticipated, the Commission has undertaken a mid-term review of ‘a’ region eligibility, with implications for assisted areas in some countries, but no far-reaching changes. Perhaps more interestingly, two recent cases provide some insights into the circumstances in which the Commission will authorise aid for large firms in the ‘c’ areas. The RAG and GBER constrain the use of regional aid to large firms in the so-called ‘c’ areas, essentially limiting such aid to greenfield projects under the GBER. Until now, however, it has been unclear to what extent the Commission would entertain aid to large firms notified under the GBER and how it would interpret ‘new process innovations.’
An important development in the recent State aid reforms has been the emphasis on evaluation. Under both the RAG and the GBER approval of regional aid schemes can be subject to evaluation plans negotiated with the Commission. Under the GBER, this applies whenever the estimated annual budget exceeds €150 million. For some countries this limit is well above likely regional aid spend, but for others there have been sometimes intense negotiations over the type of evaluation that should be undertaken. In due course, the outcome of evaluations may have direct implications for the Commission’s willingness to extend approval of the schemes concerned.
At the same time, fewer aid schemes are subject to direct scrutiny by the Commission since the scope of the GBER has been broadened to encompass measures with which the Commission considered it had had sufficient experience. The Commission has proposed to extend the scope of this still further, and in a recent consultation exercise proposed to include aid to airports and ports, as well as simplifying some aspects of operating aid.
Recent developments in regional aid have been incremental rather than groundbreaking, and pale somewhat against the impact of controversial State aid decisions such as the recent Apple tax case or the policy and political fallout from the UK referendum on EU membership. Against this backdrop, the aim of this paper is to provide a brief overview of change. The paper is structured as follows: Section 2 outlines the changes implied by the midterm review of assisted areas; Section 3 discusses cases of notified regional aid assess on the basis of RAG 2014-20; Section 4 provides an overview of regional aid evaluation plans; Section 5 sets out the Commission proposals for amendments to the GBER; and Section 6 speculates on the implications of ‘Brexit’ for the future of State aid control, especially in the UK.