The 2021 State Aid Scoreboard, published today by the European Commission and relating to State aid expenditure in 2020, shows the crucial role of State Aid policy in preserving a fair Single Market while at the same time allowing Member States to support companies in times of acute and unforeseen crisis.
In 2020, Member States granted €384.33 billion under State aid measures for all objectives, of which €227.97 billion helped businesses seriously affected by the coronavirus pandemic to remain viable.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The State Aid Scoreboard for expenditure in 2020 published today points to unprecedented levels of public support to ensure businesses hit hard by the coronavirus pandemic could stay afloat. It also shows that the temporary measures adopted were proportionate and necessary, matching the economic damage suffered during the crisis. In addition, very importantly, it shows that State aid expenditure for non-crisis objectives has remained within the pre-pandemic existing ranges. It confirms the crucial role of State aid policy as the cornerstone of a fair Single Market”.
The annual State Aid Scoreboard provides a comprehensive overview of EU State aid expenditure based on the reports provided by the Member States.
The 2021 State Aid Scoreboard comprises aid expenditure made by the 27 EU Member States and the UK in 2020. In particular, it shows that:
In 2020, Member States and the UK spent €384.33 billion, about 2.43% of their combined 2020 GDP, on State aid for all objectives, excluding aid to railways and Services of General Economic Interest (‘SGEI’). While the total expenditure for COVID-19 measures reached €227.97 billion (about 59% of the total State aid spending), public support for other measures not related to the coronavirus pandemic hit €156.36 billion (about 41% of the total spending).
For what concerns State aid expenditure in the context of the coronavirus pandemic, Poland and Greece are the Member States with the largest share of COVID-19 State aid expenditure relative to 2020 national GDP (3.8% and 3.6% respectively), followed by Malta (3%), Slovenia (2.5%), Hungary (2.1%) and Germany (1.9%). Ireland (0.2%) and Sweden (0.2%) are the Member States that spent least in relative terms, followed by Finland (0.3%), Belgium (0.4%) and the Netherlands (0.58%).
For what concerns State aid expenditure for non-coronavirus crisis objectives:
In 2020, State aid expenditure for non-crisis objectives has remained within the ranges existing pre-pandemic. In particular, it increased by €9.12 billion compared to 2019. Although this increase is lower than the one observed in 2019 with respect to 2018 (€13.44 billion), it is in line with the average annual increase recorded in the period 2015 – 2019 (€9.80 billion per year).
In line with previous years, also in 2020 environmental protection and energy savings are the non-crisis-related policy objectives on which Member States significantly spent the most (€77 billion), followed by regional development (€18.30 billion) and research and development, including innovation (€16.40 billion).
Compared to 2019, total spending on non-crisis-related projects co-financed by EU funds and Member States funds increased from about €14.85 billion in 2019 to about €17.83 billion in 2020, thus registering a €2.98 billion increase (+20%), which is much larger than the annual increase observed in the two years before (+3% in 2019 and +9% in 2018). This comes on top of the unprecedented amounts spent for co-financed COVID-19 measures (€12.95 billion), which brings the total co-financed State aid spending to the record level of €30.78 billion in 2020.
In the same trend as previous years, Member States are increasingly using the General Block Exemption Regulation (‘GBER’), which provides scope for certain measures with limited impact on the internal market to be implemented without prior approval by the Commission, as well as other sectoral block exemptions (i.e. Agricultural Block Exemption Regulation (‘ABER’) and Fishery Block Exemption Regulation (‘FIBER’)). In 2020, 79% of new State aid measures were implemented under the Block Exemption Regulations. While the absolute number of new block-exempted measures has increased in 2020 (2091 measures in 2020, 1815 measures in 2019), it represents a lower share of total new measures compared to previous years (new block-exempted measures represented +98.8% of total new measures in 2019). This is linked to the large increase in notified COVID-19 measures in 2020. Expenditure under GBER measures increased in 2020 with respect to the previous year (+9%, €59.5 billion), although at a slower pace than in the two preceding years (+13% in 2018 and +12% in 2019).
The COVID State aid Temporary Framework was adopted on 19 March 2020 to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The COVID Temporary Framework has been amended on 3 April, 8 May, 29 June, 13 October 2020, 28 January and 18 November 2021. As announced in May 2022, the COVID Temporary Framework has not been extended beyond the set expiry date of 30 June 2022, with some exceptions.
The COVID Temporary Framework complemented the ample possibilities available to Member States, such as measures providing compensation to companies for damages directly suffered due to exceptional circumstances or measures helping companies cope with liquidity shortages and needing urgent rescue aid.
Furthermore, on 23 March 2022, the Commission adopted a State aid Temporary Crisis Framework to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia’s invasion of Ukraine. The Temporary Crisis Framework has been amended on 20 July 2022 to complement the Winter Preparedness Package and in line with the REPoweEU Plan.
Finally, since May 2012, the Commission has implemented an ambitious State aid reform programme (‘State Aid Modernisation’) with three closely linked objectives: (i) foster growth in a strengthened, dynamic and competitive internal market; (ii) focus enforcement on cases with the biggest impact on the internal market; and (iii) streamlined rules and faster decisions.
The State Aid Modernisation exercise has allowed Member States to quickly implement State aid that fosters investment, economic growth and job creation, leaving the Commission to focus its State aid control on cases most liable to distort competition.
On 7 January 2019 the Commission launched, in line with the Commission’s Better Regulation Guidelines, the evaluation of the rules, which were adopted as part of the State aid Modernisation exercise, including the Guidelines on State aid for environmental protection and energy and the Communication on important projects of common European interest (IPCEI) among others. The evaluation took the form of a “fitness check”. The aim was to provide a basis for decisions about whether to further prolong or possibly update the existing rules.
The results of the evaluation exercise are summarised in a Commission Staff Working Document. The milestones of the Fitness Check are listed on the Better Regulation Portal. All relevant State aid rules, including the already amended ones, can be found here.
Source: Cyprus News Agency