25 April 2012

State aid: Commission adopts de minimis Regulation for services of general economic interest (SGEI)

Compensation of this magnitude is deemed unproblematic because it is too low to have any impact on trade and competition. This is the last pillar of a new package of state aid rules for SGEI, the bulk of which has been adopted in December 2011 (see IP/11/1571 and MEMO/11/929).

Joaquín Almunia, Vice President of the Commission in charge of competition policy, said: "European citizens need both strong public services and an efficient internal market based on strong competition rules. This new exemption will facilitate the provision of many small, local public services and will also help the Commission focus its efforts on cases where state aid has a real impact on competition and trade between Member States".

The SGEI de minimis Commission Regulation adopted today sets out the conditions under which support granted to SGEI providers does not constitute state aid within the meaning of Article 107 of the Treaty on the Functioning of the European Union (TFEU). Amounts of up to €500,000 over three years are now deemed not to constitute aid because it does not affect competition or trade between Member States. This threshold is higher than the general de minimis thresholds in the field of state aid (€200,000 over three years) because it can be assumed that the support measures are at least in part compensating for the extra costs incurred for the provision of a public service.

The new Regulation is a major simplification for both public authorities and service providers, because it will considerably reduce the administrative burden for granting public service compensation for small SGEI. At the same time, it increases legal certainty, because it establishes a clear threshold, below which SGEI compensation does not constitute state aid within the meaning of EU rules.

Drafts of the new Regulation had been published for consultation in September 2011 (see MEX/11/0916) and in January 2012. The Commission received valuable contributions from Member States, European institutions and stakeholders which have been taken into account in the final version of the Regulation. In particular, conditions relating to the turnover of the provider and the size of the local authority granting the compensation have been removed. In the final version, only the condition related to the amount of aid (€500,000 over three years) has been maintained.

The de minimis Regulation will be in force until 31 December 2018.

Background

The new SGEI package revises the 2005 so-called "Monti-Kroes" package applicable to services of general interest that are of an economic nature. It aims at providing clarification and introducing a diversified and proportionate approach in the assessment of state aid to public service providers and has been subject to an extensive consultation process. The new SGEI package applies to all authorities (national, regional, local) that grant compensation for the provision of SGEI. In addition to the SGEI de minimis Regulation adopted by the Commission today, it consists of the following three instruments:

• The Communication guides Member States, public services providers and other interested parties, mainly by clarifying basic concepts of State aid that are relevant for SGEI, such as the notion of aid, SGEI, economic/non-economic activity etc.
• The Decision exempts certain categories of public service compensation fulfilling certain conditions from notification to the Commission. The revised Decision provides a simpler and more flexible approach for small services and certain social services.
• The SGEI Framework is the basis for dealing with large compensation amounts granted to operators outside the social services field. Those cases have to be notified to the Commission for state aid scrutiny and may be found compatible if certain criteria are met. The new rules foresee a more thorough competition scrutiny.

© European Commission