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EC spells out state-aid reforms

by Renee Cordes In Brussels  |  Published December 5, 2012 at 1:44 PM
The European Commission on Wednesday, Dec. 5, released proposals to improve the way state-aid complaints are handled and allow governments to dispense certain kinds of aid without telling Brussels beforehand.

The blueprint also means that instead of just reacting to complaints, the Commission could launch investigations under its own initiative in areas where significant distortions of competition threaten to undermine the single market.

While the Commission is obliged to act on the 300-plus complaints it receives every year, it would prefer to focus its enforcement efforts on the cases with the biggest potential impact on competition and trade in the 27-nation European Union.

Regulators want to exempt states from having to lodge formal notifications beforehand when dispensing aid for culture; to compensate for natural disasters damage; for amateur sports; and certain types of support for transportation and for broadband infrastructure.

The EU's executive arm also wants to clarify the conditions for filing a complaint, by requiring complainants to submit certain compulsory information and show how they would be affected by aid given to rivals.

"The reform package is designed to turn state-aid policy into a simpler, stronger and smarter instrument to coordinate member states' efforts to boost growth in times of extraordinary budgetary constraints," EU Competition Commissioner Joaquín Almunia said in a statement. "The proposals will streamline our decision-making and refocus enforcement on the aid that really matters."

However, critics warn that EU governments are unlikely to agree to giving Brussels more power to unilaterally launch investigations. One also pointed out that the current procedural rules were four decades in the making.

Wednesday's proposals come nearly five months after the Commission launched a consultation on its plans -- and still have to be vetted by EU member states.

Separately on Wednesday, the Commission temporarily approved €1.5 billion ($2 billion) in emergency aid to Austria's Hypo Group Alpe Adria, which the lender needs to meet regulatory equity ratios. Regulators said they granted the approval "for reasons of financial stability."

Tags: European Commission | Hypo Group Alpe Adria | Joaquín Almunia

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