By Brian Johnson - 6th June 2005
The European Commission has unveiled a shake-up to EU rules allowing – or blocking – government economic subsidies.
Brussels is seeking to streamline complicated rules by encouraging national capitals to focus on innovation and not to prop up failing industries.
Governments should focus subsidies on improving business competitiveness by promoting innovation, research and by making the financing of risk capital simpler.
Reforms will also cut down on red tape requirements to report state aid subsidies that do not distort competition, the so called ‘block exemption’ regulations.
Commenting on the launch, EU competition chief Neelie Kroes said that the reforms would help to accelerate decision making.
“The state aid reforms outlined in the action plan aim to ensure member states have a clear, comprehensive and predictable framework, so that they can provide state aid which contributes to cohesion, competitiveness and high quality public services,” she said.
“But before I make concrete proposals for change, I want to see the results of the broad consultation - including businesses, member states and the European Parliament - that we are launching on the basis of this action plan.”
The Dutch commissioner told German industrialists on Monday ahead of the announcement that she had placed state aid policy at the top of her agenda as competition commissioner.
And Kroes told MEPs in Strasbourg on Tuesday that she wanted state aid reform to give the best value for money for EU taxpayers.
“That means designing a framework to target aid better. When state subsidies are used intelligently to fill clearly identified gaps, they can deliver sizeable spin-offs – for citizens, for consumers, for companies, for Europe’s overall competitiveness and economic growth.”
The commission’s consultation period on the new proposals will last until September 15, after which the Brussels will present detailed state aid reform proposals.
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