Commission gives guidance on local public support measures that do not constitute State aid

On 21 September 2016, the European Commission adopted five decisions on the financing of purely local activities that fall outside the scope of State aid rules.

A public support measure can only qualify as State aid under European law if it affects or threatens to affect trade between Member States.

Previously, the European Commission had a very broad interpretation of this condition. This broad interpretation meant that most public measures fell under EU State aid rules, which led to significant administrative burdens for public authorities and entailed meeting strict conditions to grant those public financial measures.

Recently, the Commission decided to adopt a more flexible and realistic approach towards the financing of purely local operations.

In April 2015, the Commission had adopted several decisions, concluding that the funding of purely local activities fell outside the scope of State aid rules.

The Commission included that new approach in its notion of aid notice adopted in May 2016 and published in July 2016.

On 21 September 2016, the Commission adopted five decisions that clarify further the notion of purely local operations that do not fall within the scope of State aid rules:

  • Spanish public funding for micro companies in the media sectors, especially print media, where the aim is to promote periodicals and collaborative projects in the field of local media in the Basque language in the Province of Gupúzcoa;
  • public financing of the construction of several sports facilities with a maximum of 200 beds at the Sportcamp of Nordbayern in Bavaria, that is opened principally for schools, non-profit sports clubs and social or educational activities;
  • funding of the renovation and modernization of infrastructure in the Port of Wyk auf Föhr, a German island with about 8,000 inhabitants;
  • social support services for the elderly and disabled as well as other long-term care services in the City of Tomar in Portugal;
  • support for written or digital media in Valencian.

This new decision-making practice will allow regional and local authorities greater freedom in the financing of local projects.