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State aid control

Public investment in culture and communications industry Brussels 22 November 2011. State aid control. Wouter Pieké * Head of Unit COMP.C.4

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State aid control

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  1. Public investment in culture and communications industryBrussels22 November 2011 State aid control WouterPieké* Head of Unit COMP.C.4 *"The viewsexpressed are purelythoseof the writer and maynot in anycircumstancesberegardedasstatinganofficial position of the European Commission."

  2. Is public investment State aid? • Article 107(1) TFEU implies the use of public resources, advantage, selectivity, risk of distortion of competition & effect on trade, for undertakings or productions. • General measures – no selectivity, no aid. • Market economy investor principle (MEIP) – no advantage, no aid.

  3. Compatibility of aid (1) • Culture and communication cover a variety of activities. • Article 107(3)c) allows for aid to promote certain economic activities. • Article 107(3)d) allows for aid to promote culture. • Article 106(2) allows for aid to SGEI.

  4. Compatibility of aid (2) • Whether 107(3)c) or 107(3)d): aid must be the adequate instrument and necessary to achieve the goal set, and it must be proportionate to it. • The positive effects of the aid need to be balanced with the negative effects on competition and trading conditions.

  5. Compatibility of aid (3) • Specific rules in: • Broadcasting Communication (2009) • Broadband Guidelines (2009 – review) • Cinema Communication (2009 – review) • SGEI package (2005 – review) • Decisions published on website.

  6. Compatibility of aid (4) • Undertakings in culture and communication may also benefit from horizontal aid schemes (environment, R&D&I, training, regional development, SME aid). • Rules can be found in the GBER and horizontal frameworks and guidelines. • “De minimis” aid is also possible.

  7. Fiscal measures • The form of the aid is in principle not relevant for compatibility, as long as the aid is measurable. • Direct and indirect fiscal aid can be made comparable to grants. • Difficulties: profitability, no margin for discretion (entitlement to aid).

  8. Example: tax credits for film industry2009 • Italian tax credits for film production and distribution were found to be compatible under Article 107(3)d). • Regarding tax credits for digitisation of cinemas the Commission expressed doubts on necessity, proportionality and adequacy.

  9. Example: tax credits for publishing2011 • In October 2011 the Commission approved a scheme for Italian publishing companies in the form of a 10% tax credit on paper purchased (advertisement excluded). • A similar scheme had been approved in 2004 after a full examination and which was prolonged in 2005.

  10. State aid for primary objectives and sectoral aid as % of total aid

  11. Thank you for your attention.

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