State aid: EU guidelines for regional aid for 2014 to 2020

EU guidelines on how EU Member States can grant investment aid to companies to support the development of disadvantaged regions in Europe between 2014 and 2020 entered into force in July 2014.

ACT

Guidelines on regional State aid for 2014-2020 (Official Journal C 209 of 23.7.2013).

SUMMARY

The European Commission has produced guidelines as to how EU Member States can grant investment aid to companies in order to support the development of disadvantaged regions in Europe between 2014 and 2020.

The purpose of the revised guidelines is to encourage economic growth by promoting investments in projects that bring real added value for regional development, especially in Europe’s most disadvantaged regions.

More specifically, the regional aid guidelines set out the rules under which EU Member States can grant state aid to companies to support investments in new production facilities in the less advantaged regions of Europe or to extend or modernise existing facilities.

The guidelines also contain rules on the basis of which EU Member States can draw up regional aid maps to identify in which geographical areas companies can receive regional state aid and at what level.

Key features of the new guidelines include:

• The overall share of regions where regional aid can be granted will increase to 47 % of the population of the EU. Currently, about about one in four Europeans lives in less developed regions (defined as regions with Gross Domestic Product (GDP) below 75 % of the EU average). About one in three Europeans lived in less developed regions when the 2007-13 guidelines were adopted. Despite this reduction in regional disparities, the Commission has taken account of the effects of the economic crisis and therefore increased the population coverage.
• The guidelines adopt a stricter approach on aid for investments made by large enterprises in the more developed assisted areas. Aid to large enterprises in these areas will only be allowed for investments that bring new economic activity, for initial investments for the diversification of existing establishments into new products or for new process innovation, because it is more likely that these investments will be carried out thanks to the subsidy. In the poorest regions (regions below 75 % of the average GDP of the EU), the guidelines continue to allow aid for other types of investments by large companies as well.
• To increase transparency and accountability, Member States will have to publish on the Internet data on how much regional aid they grant and to whom.

Last updated: 27.02.2014