91999E0055

WRITTEN QUESTION E-0055/99

by Paul Rübig (PPE) to the Commission

(22 January 1999)

Subject: Avoiding a contest for financial aid - priority for the business environment

The EU's regional policy is intended to increase the competitiveness of regions whose development is lagging behind and those with structural adjustment problems. There is, however, a danger that regional rivalry in an unhealthy race for business sites and associated financial aid will distort competition. Such distortions can be kept to a minimum if we give priority to fostering the business environment rather than assisting individual firms. In this way we would support a more sustainable regional development. A way to implement this strategy in concrete terms would be, for example, for each programme's total operations to include a 50 % commitment of ERDF funds, which are intended to support the business environment.

What is the Commission's view of these efforts to avoid harmful competition for business sites?

Answer given by Mrs Wulf-Mathies on behalf of the Commission

(3 March 1999)

European competition policy ensures that aid given to eligible regions complies with Articles 92 and 93 of the EC Treaty. Within this framework, a certain competition between different regions is welcome in order to increase the competitiveness of regions as well as the Community as a whole.

However, to avoid damaging or unfair competition between the regions for inward investment the Community's competition policy includes measures such as the guidelines on national regional aid(1) or multisectoral framework on regional aid for large investment projects(2).

The Commission agrees with the Parliament on the need to give more importance to the improvement of the business environment rather than assisting enterprises themselves. In its working paper on "The Structural Funds and their coordination with the Cohesion Fund - Draft guidance for programmes in the period 2000-2006"(3) adopted on 3 February 1999, the Commission urges the need to focus more on the qualitative aspects of the business environment, such as for example business support services, while the importance of capital grants should be reduced.

However, the extent to which the European regional development fund assists productive investment or business related infrastructure is the responsibility of the regions drafting and implementing the programmes. Indeed, this question is at the core of formulating a region specific strategy for regional development. The Commission does not therefore in general give any specific quotas for individual priorities such as business related infrastructure.

(1) OJ C 74, 10.3.1998.

(2) OJ C 107, 7.4.1998.

(3) SEC(99) 103.