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BB200605, News in Brief

Spring State Aid Scoreboard special focus on Acceding and Candidate countries

30.01.2007

The update of the State aid Scoreboard aims to present the State aid situation in the current Acceding countries (Bulgaria and Romania) as well as touching on how it relates to the Candidate countries (Croatia, Turkey and The Former Yugoslav Republic of Macedonia ) and the Potential Candidate Countries ( Albania, Bosnia and Herzegovina, Serbia and Montenegro, and Kosovo under UN Security Council Resolution 1244).

Romania is found to overshadow Bulgaria with €981 million awarded each year over the period 2002-2004 compared to a paltry €65 million for Bulgaria. The figures discount agriculture, fisheries and transport aid.

The share of sectoral aid for both countries; 87% of total state aid in Romania, and 55% in Bulgaria, was relatively high, indicating distortive aid such as rescuing firms in difficulty. In Romania the very high share of sectoral aid is clearly in the context of strong support for its major industries such as mining (21%), steel (14%) and coal (11%).

Total state aid for Romania at 1.86% of GDP was higher than the EU average for the ten new Member States (1.35%), but in this period it has undergone an extensive restructuring and reform programme to make a transition to a market economy. Bulgaria’s total state aid package however at 0.36% of GDP was lower even than the average for the EU 25 (0.49%.)

The EU’s State Aid is currently undergoing a process of reform to make it better targeted and more efficient. In the spirit of the Lisbon strategy it is focusing on innovation and R&D, entrepreneurship, human capital, high quality services of general economic interest, and encouraging an environmentally sustainable future. It aims to become more modern both in practices and procedures and targets. In February of this year the European Parliament welcomed the Commission’s refining approach but underlined that aid for R&D must not fall to established market players. It noted that the development of environmental technologies in the EU, notably in the energy sector, had been hampered by significant State aids for fossil fuels and nuclear power. According to its non-binding resolution (14.02.2006): “It strongly believed in the principle that external costs should be included in the price of energy from different sources and that this principle should be a basis for the revision of the EU’s State Aid guidelines.”

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