Issues Paper on the revision of the Community Framework for State aid for RDI

On 12 December 2012, the Commission published an Issues Paper which identifies the most relevant areas for reflection regarding the revision of the Framework for State aid for research, development and innovation (RDI), in the context of adapting it to the "Europe 2020 Strategy".

On 8 May 2012, the Commission enacted a Communication on the modernization of EU State aid policy. This Communication aims at adapting the State aid rules to the Europe 2020 growth strategy, prioritizing scrutiny of aids that are potentially the most harmful for the internal market and simplifying the applicable rules and procedures. One of the main priorities of the Europe 2020 strategy is to increase the level of RDI investment at a level of 3% of GDP.

In the Issues Paper, the Commission outlined the possible directions that the future Framework should, in its opinion, take.

A revision of the scope of the existing Framework as regards increasing legal certainty is first suggested. This revision should also define new compatibility criteria for aid to research infrastructures that are publicly funded as well as for aid to important projects of common European interest.

Second, the Issues Paper proposes to rethink the structure of and relationship between the Framework and General Block Exemption Regulation (GBER). The idea is to have both instruments cover the exact same situations, but with the Framework only applying to individual notifications taking place where the aid amount exceeds a certain threshold.

Third, the Issues Paper addresses the necessity to enhance the compatibility rules. The paper suggests strengthening the market failure analysis by making more sectorial comparisons and allowing the presumption of market failure or absence of market failure in certain situations (for example, absence of market failure when a similar project is carried out without aid). Regarding the incentive effect of the aid, the Issues Paper proposes to presume its absence when the project started before granting the aid. The proportionality test could also be enhanced by adopting the net extra cost approach and the maximum aid intensities could be increased in order to match the aid amounts allocated to competitors outside the EU. Finally, regarding the analysis of the negative effects of the aid, the Issues Paper recommends designing built-in remedies for reducing distortions of competition.

The full text of the Issues Paper is available online.