Select Committee on European Scrutiny Tenth Report


STATE AID


(a)

(22605)

11190/01

COM(01) 403

(b)

(22602)

11204/01

COM(01) 412



Ninth survey by the Commission of state aid in the European Union.



State aid scoreboard 2001.

Legal base:
Document originated: (a) 18 July 2001

(b) —

Forwarded to the Council: 20 July 2001
Deposited in Parliament: 3 September 2001
Department: Trade and Industry
Basis of consideration: EMs of 17 September 2001
Previous Committee Report: None; but see paragraph 1 below
To be discussed in Council: None planned
Committee's assessment: Politically important
Committee's decision: (Both) Cleared

Background

  10.1  The Commission has published survey reports on state aid in the Community for some years, and since 1998 the reports have been annual. These surveys compare three-year periods. The previous Committee reported on the Eighth survey in May 2000.[18] That survey covered the three-year period 1996-98 and included comparisons with 1994-96.

The documents

  10.2  Document (a) is the Ninth Survey of state aid and covers the period 1997-99, with comparative figures for 1995-97. Document (b) is the first of a new series of documents on state aid that complements the surveys. Neither document contains any legislative proposals.

  10.3  The Ninth Survey, like previous editions, sets out a large amount of statistical material on state aid to various sectors, in particular the manufacturing sector, but also agriculture, fisheries, coal, transport and other sectors. Supranational aid (for example, EC Structural Funds) is excluded.

  10.4  The data shows a continuing gradual downwards fall in overall levels of state aid. The average annual amount of state aid for the EU15 has decreased from _102 billion during 1995-97 to _90 billion during 1997-99.

  10.5  Manufacturing aid (31% of the total) has declined by nearly one quarter (23%) in 1997-99 compared with the previous period, reflecting reductions in Germany (_3 billion) and Italy (_4 billion) and smaller reductions in Belgium, Greece, Spain, Luxembourg, the Netherlands, and the UK.

  10.6  Tables, 1, 2 and 3 set out various statistics on the level and composition of state aid in individual Member States and the EU generally.

  10.7  In terms of state aid expressed as a percentage of GDP, the highest levels were found in Finland (1.74%), Portugal (1.56%) and Belgium (1.41%). The UK had the lowest figure (0.60%). In terms of the average annual amount of state aid (in 1998 constant prices), the highest sums were in Germany (_26.7 billion), France (_17.8 billion), and Italy (_13.6 billion). The comparable figure for the UK was _7.6 billion.

  10.8  Part II of the Survey provides a detailed breakdown of state aid in the manufacturing sector to show differences between Member States in terms of the volume of aid, sector, function, aid instrument[19] and objectives. The Survey analyses support by main manufacturing sectors (shipbuilding, steel, motor vehicles) and also ad hoc aid (mainly for rescuing or restructuring companies, principally in the steel and shipbuilding industries but also air transport and financial services).

  10.9  Part III of the Survey deals briefly with aid to agriculture, where the limits on state aid are to a great extent determined by the Common Agricultural Policy, and refers to the more detailed account in the Commission's separate annual publication, The Agricultural Situation in the Community. Part IV sets out aid to fisheries within the context of the Common Fisheries Policy.

  10.10  Part V, which deals with aid to coal mining, notes that "for coal, the observed amounts of aid are high" and that "the declared will of the Community to open up the energy market renders a strict aid control policy by the Commission in this sector more and more important." Part VI deals with aid to the transport sector. The vast bulk of state aid for transport goes to railways; such aid decreased in volume from _35.8 million in 1995 to _31.3 million in 1999. Part VII deals with aid to the other service sectors (tourism, media and culture). The largest provider of state aid by way of specific programmes to tourism was Italy. France and the UK were the largest providers of state aid to media and culture.

  10.11  Part VIII deals with aid for employment and training. Part IX sets out a view of the year 2000. Part X provides an overview of the 1990s and a country analysis. Part XI deals with aid to services and changing patterns in state aid.

  10.12  Document (b) presents a series of indicators that demonstrate the various trends in state aid and provide a means for Member States to measure their individual performance. The scoreboard, which generally covers a similar period as the Survey, consists of five parts:

  • an overview of state aid in the European Union over the last ten years and in the recent past;

  • a Member State forum whereby Member States set out relevant sources of information on state aid, usually by means of an internet address, which it is hoped will act as a catalyst for discussion between Member States;

  • a range of indicators, including the degree of compliance with state aid rules, such as the percentage of investigated aid cases that had not been notified to the Commission; this shows that the UK has the third highest percentage (22%) of non-notified cases, after Greece (32%), and Germany (29%);

  • information on the current state aid policy in the Member States, showing the amounts of aid for different objectives and specific sectors; and

  • discussion of the relationship between state aid and the Internal Market.

The Government's view

  10.13  As regards document (a) the Minister for Competition, Consumers and Markets at the Department of Trade and Industry (Miss Melanie Johnson) says that:

"Successive European Councils have endorsed the reduction of state aid. The Stockholm Council conclusions said that aid should be reduced in relation to GDP by 2003 and reoriented towards horizontal objectives of common interest including cohesion objectives.

"The Survey's detailed information is a valuable source for Member States to assess how well the Community is doing collectively as well as at individual Member State level to achieve these commitments."

  10.14  As regards the state aid scoreboard, the Minister says:

"The UK is a low provider of aid and has been in the forefront of pressing for increased transparency and a reduction in overall EU levels of aid. This new Commission document is a positive development which responds to UK influence. The longer term aim is that the scoreboard should replace the Surveys and, unlike the Surveys, become a document that is actively discussed by Member States. This new 'peer review process' should become an effective tool in helping to meet the Stockholm Council target to reduce state aid in relation to EU GDP by 2003."

Conclusion

  10.15  Although the ninth survey of state aid is, like its predecessors, largely descriptive and somewhat out of date, it nevertheless contains a large amount of useful comparative statistical material. The state aid scoreboard is an innovation and, in part, presents similar material to the annual survey. However, at the centre of the scoreboard is a set of indicators that should help to identify where improvements are necessary and should, over time, indicate changes in policy and patterns of state aid.

  10.16  The Minister says that the long-term aim is for the scoreboard to replace the surveys and, unlike the surveys, to be actively discussed by Member States. If this happens, we will welcome it. Meanwhile, we clear the documents.

Table 1

Overall national state aid in the Community — annual averages 1995-1997 and 1997-1999 in constant prices (1998)

                                        _ Billion


1995 - 1997

1997 - 1999

Overall national aid

102

90

of which:



— Agriculture

15.2

14.0

— Fisheries

0.3

0.3

— Manufacturing

35.8

27.6

— Coal Mining

8.2

7.6

— Transport

35.4

32.0

 Of which rail transport

33.7

31.5

— Services

5.0

5.4

— Employment

0.8

0.9

— Training

1.7

2.2

Table 2 State aid per capita in the Member States - annual averages 1995-1997 and 1997-1999 in constant prices (1998) and
overall national aid in the Member States as a percentage of GDP, in euros per person employed and as a percentage of government expenditure 1995-1997 and 1997-1999 in constant prices (1998)




Population in millions

Annual averages 1995-1997

Annual averages 1997-1999

As a percentage of GDP

In euros per person employed

As a percentage of total Government Expenditure

  In _

   million


_ per capita

In _ million

_ per capita

1995-1997

1997-1999

1995-1997

1997-1999

1995-1997

1997-1999

Austria

8

2,389

296

2,180

270

1.32

1.16

610

550

2.37

2.15

Belgium

10

3,285

322

3,152

309

1.55

1.41

880

830

2.94

2.76

Denmark

5

1,575

297

1,681

317

1.07

1.08

599

622

1.80

1.90

Germany

82

32,228

393

26,716

326

1.73

1.39

864

712

3.49

2.85

Greece

11

1,584

151

1,305

124

1.55

1.21

416

338

3.37

2.70

Spain

39

6,801

173

6,086

155

1.40

1.17

493

416

3.21

2.80

Finland

5

2,292

445

1,994

387

2.22

1.74

1,103

914

3.76

3.21

France

59

17,989

306

17,829

304

1.46

1.38

790

772

2.64

2.55

Ireland

4

698

189

1,065

288

1.08

1.36

517

706

2.72

3.75

Italy

58

18,523

322

13,605

236

1.80

1.28

838

607

3.41

2.56

Luxembourg

0

140

330

218

514

0.94

1.31

633

912

2.12

3.04

Netherlands

16

2,739

175

3,159

202

0.84

0.90

373

406

1.69

1.90

Portugal

10

1,557

156

1,535

154

1.68

1.56

342

326

3.73

3.50

Sweden

9

2,000

226

1,792

203

0.99

0.84

492

436

1.50

1.35

United Kingdom

59

8,519

144

7,569

128

0.72

0.60

324

280

1.63

1.47

EUR 15

375

102,319

273

89,885

240

1.43

1.18

656

563

2.82

2.44

Table 3 Overall national aid in the Member States - breakdown according to main sectors 1995-1997 and 1997-1999

                          Per cent


Agriculture and

fisheries

Manufacturing

Coal

Transport

Services

Employment and

Training

1995-1997

1997-1999

1995-1997

1997-1999

1995-1997

1997-1999

1995-1997

1997-1999

1995-1997

1997-1999

1995-1997

1997-1999

Austria

51

46

20

22

-

-

27

30

1

2

1

1

Belgium

8

8

25

21

-

-

64

67

-

-

3

4

Denmark

17

15

41

39

-

-

32

31

2

2

9

14

Germany

7

6

41

37

16

18

35

37

1

1

-

1

Greece

11

14

43

41

-

-

47

45

-

-

-

-

Spain

18

20

31

25

16

18

26

24

1

1

8

12

Finland

78

74

17

21

-

-

2

2

0

1

3

2

France

20

17

23

26

4

5

37

34

16

17

-

-

Ireland

16

17

38

45

-

-

24

13

11

15

11

10

Italy

9

13

56

42

-

-

31

39

4

5

-

2

Luxembourg

23

14

34

21

-

-

43

64

-

1

-

-

Netherlands

34

37

22

18

-

-

44

44

1

1

-

-

Portugal

13

20

12

12

-

-

19

7

45

53

10

7

Sweden

14

19

18

23

-

-

54

51

4

5

10

2

United Kingdom

19

18

18

19

13

8

35

35

3

3

11

17

EUR 15

15

16

35

31

8

8

35

36

5

6

2

3



18  (21183) - ; HC 23­xviii (1999­2000), paragraph 15 (17 May 2000). Back

19   For example, whether the aid is provided by means of grants, tax exemptions, equity participation, soft loans, tax deferrals or guarantees.  Back


 
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