IQ-Net partners – regional and national programme management authorities

1. Managing State aid compliance in Cohesion policy programmes Rona Michie, European Policies Research Centre, University of Strathclyde, GlasgowMeeting of the Monitoring Committee, Riga, 24 November 2010

2. IQ-Net partners – regional and national programme management authorities • Italy • Lombardia • IPI / Ministry of Economic • Development • Austria • Niederösterreich • Steiermark • Belgium • Enterprise Flanders • Poland • Śląskie Voivodeship • (Marshal’s office) • Czech Republic • Ministry for Regional • Development • Portugal • Financial Institute for • Regional Development (IFDR) • Denmark • Danish Enterprise & • Construction Authority • Slovenia • Government Office for Local Self- • Government & Regional Policy • Finland • Keski-Suomi • Min. of Employment & the Economy • Spain • País Vasco (Province of Bizkaia) • France • DATAR • Sweden • Tillväxtverket (Swedish Agency for • Economic & Regional Growth) • Germany • Nordrhein-Westfalen • Sachsen-Anhalt • United Kingdom • North-East England • Department of Communities & • Local Government (CLG) • Wales (WEFO) • Scottish Government • Hungary • Hungarian Enterprise Development Centre (MAG) • in association with National Development Agency • Greece • Management Organisation Unit • of Development Programmes S.A.

3. Methodology • Methodology – interviews and desk research • Focus today on practical issues faced by partners when trying to manage compliance • Absence of ‘sharp edges’ has practical consequences in particular areas

4. Managing compliance – domestic arrangements • State aid rules do not specify internal structures for managing compliance • Structures are more formal in new Member States – legacy of pre-accession era • Common theme: importance of training, advice and information by State aid specialists; only in Slovenia is binding opinion given • Attitudes to compliance vary: • extreme caution – notify for legal certainty in cases of doubt • informed risk analysis • “we try to comply, but if it really doesn’t suit, we don’t”

5. Managing compliance – EU framework • In principle all aid must be notified to and approved by the Commission before implementation • In practice, not workable, so most aid in form of schemes, for which potentially ‘000s of beneficiaries • Hierarchy of scrutiny has emerged – from case-by-case analysis to reporting (GBER) or ‘no aid’ (de minimis)

6. Use of block exemptions Use of block exemptions among IQ-Net partners: • Those who use say it offers flexibility and room for manoeuvre • National framework legislation in France uses GBER as a template • Italian ‘omnibus’ scheme introduced instead of using GBER • Some see no benefit – Pais Vasco, Flanders

7. de minimis – experience of IQ-Net partners • de minimis widely used by IQ-Net partners • avoids having to define State aid; no constraint on aid rate or eligible expenditure • different attitudes use of de minimis: • last resort for some (because of monitoring and compliance obligations) • for others: ‘safe harbour’; ‘get-out-of-jail-free’ card • different approaches to monitoring and compliance • reliance on beneficiary declarations • actual or proposed databases of awards

8. Use of de minimis databases • Use of databases to help monitor de minimis levels: • Poland: SHRIMP – System for Collection, Reporting and Monitoring Aid • Italy: BDA – Banca Dati Anagrafica • Portugal • Slovenia • Some programmes decided they would be too costly to develop, or that de minimis aid was too marginal

9. Slovenian State aids database

10. Managing compliance – partner feedback • Workshops held at Steiermark IQ-Net meeting – the main messages: • Perception that definition of State aid is changing and moving into new areas • JEREMIE and JESSICA problematic • Use of de minimis labour intensive and questions about use of databases

11. Managing compliance – partner feedback Partner feedback (continued) • Lack of clear definitions and the complexity and constantly evolving nature of the rules makes the system fraught with uncertainty • Need for better, more centralised, consistent and comprehensive information

12. Issues, trends and tensions • Principles drafted 50+ years ago difficult to apply today • Blurred boundary public/private sector, complex areas such as healthcare, infrastructure, public/private partnerships • All these often supported under Cohesion policy programmes • Greater awareness of rules in current planning period • State aid rules are a major source of anxiety for many

13. Issues, trends and tensions (cont’d) • Significant asymmetries of risk in compliance process • Technical demands of compliance are considerable • State aid compliance may frustrate Cohesion objectives • Structural Funds may achieve greater State aid compliance than purely domestic policy

14. Thank you for your attention! Pandora's Box and the Delphic Oracle: EU Cohesion Policy and State Aid Compliance, IQ-Net Thematic Paper 24(2) Fiona Wishlade and Rona Michie The full paper can be downloaded from the IQ-Net website at: http://www.eprc.strath.ac.uk/iqnet/reports.cfm rona.michie@strath.ac.uk