Parliament supports move to focus state aid on competitiveness - Main contents

Parliament is supporting Commission plans to reform the state aid rules, with the aim of having less, but better state aid in the future. MEPs adopted a report by Gunnar Hökmark (EPP-ED, SE) which approves the EU executive's aim of making state aid an instrument for growth and jobs as part of the Lisbon strategy.

The own-initiative report is Parliament's contribution to the Commission's consultation on its proposals. MEPs agree that state aid policy needs comprehensive reform, saying that the market economy is the most efficient way of allocating limited resources, so state aid should be a last resort. However, they note that when it does not distort competition, state aid is a permissible means to promote development. Welcoming the plans for an economic approach to state aid, they call for this to be strictly defined, notably including a detailed definition of the concept of market failure.

The report says Member States should require companies to publish details of the subsidies they receive " to enable shareholder to better evaluate the real performance of the company." MEPs stress that aid for innovation can give industry an incentive to invest more in research and development, but warn it should not distort competition, by for example, favouring one undertaking over others.

On state support for services of general economic interest, Parliament says that this only counts as ' state aid ' when there is overcompensation. It calls for greater clarity from the Commission on the implementation of the Altmark ruling taking account of the specificities of different sectors and suggests assessment of state aid to public service companies should be based on the effect on the market rather than the size of the company involved.

When it comes to regional aid, the report supports a focus on investments on infrastructure and horizontal aid. While noting that environmental state aid can be crucial in achieving sustainable development, MEPs call for Member States to reduce and ultimately eliminate state aid which promotes polluting production or consumption.

Among other points, the report also argues that the system should be made less bureaucratic and that sanctions for non-notification should apply to the Member States concerned as well as to the recipients of aid.