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State Aid Day Office for the Protection of Competition

State Aid Day Office for the Protection of Competition. THE ROLE OF THE MEMBER STATE IN THE STATE AID POLICY Roland Schachl Federal Ministry of Economy, Family and Youth Unit C1/8 – EU State Aid Law Brno, 16 April 2009. Core Strategy Factors.

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State Aid Day Office for the Protection of Competition

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  1. State Aid DayOffice for the Protection of Competition THE ROLE OF THE MEMBER STATE IN THE STATE AID POLICY Roland Schachl Federal Ministry of Economy, Family and Youth Unit C1/8 – EU State Aid Law Brno, 16 April 2009

  2. Core Strategy Factors • Justification and alternatives • Organisation and administration • Instruments to achieve targets • Economic integration

  3. Historic Outline of State Aid Policyin Austria

  4. 1945 – 1960: Recovery and Reconstruction • Scarcity of funds in general and foreign exchange reserves in particular • “Marshall Plan“, Counterpart Agreement, ERP-Fund • Regional tax exemptions

  5. 1960 – 1980: Diminution of Regional Disparities;Balancing the Business Cycle • Stimulation of the economic growth • Equilibration of the business cycle • Foundation of aid granting institutions and creation of aid schemes • Focus on enabling access to credit capital through guarantees (closing “risk gap“)

  6. 1980 – 1990: Measures addressed to horizontalPurposes • Spectrum of focal points extended to research and technological development, environmental protection and employment • Focus given on interest subsidies to face high nominal interest rates due to high inflation rates • Structural change in largely State-owned industries (iron and steel, mining, textile) requiring rescue and restructuring interventions

  7. 1990 – 2000: Accession to EEA and EU; State Aid Law; Structural Funds Cofinancing • 1 January 1994: accession to the European Economic Area; integration of State Aid acquis • 2 March 1994: Information to EFTA Surveillance Authority on „Existing Aid“ in Austria („ESA-Notification“) • 1 January 1995: accession to the European Union • First Operational Programmes under Structural Funds • Large investment projects seen as impact for regional development (e. g. car manufacturing, tourism etc.)

  8. 2000 - : Reorganisation of Federal Aid Providers;Development of Innovative Aid Instruments • 2002: Establishment of the Austrian Economic Services Company Ltd. („Austria Wirtschaftsservice Gesell- schaft m. b. H.“), principle of “one-stop-shop“ • 2004: Establishment of the Austrian Research Promotion Company Ltd. („Österreichische Forschungs- förderungsgesellschaft m. b. H.) • Budgetary constraints • Risk capital models, hybrid forms of financing

  9. Legal Background for State Aid in Austria • ERP Fund Act 1962 • Labour Market Promotion Act 1969 • General Framework Guidelines 1977 for the Granting of Aid by Means of the State Budget • Guarantee Act 1977 • SME Promotion Act 1996 • Research and Technology Promotion Act 2006

  10. Key players in Austrian State Aid Policy • Federal Ministry of Economy, Family and Youth • State Aid Providers at the federal level • State Aid Providers at the regional level (9 Länder) • State Aid Providers at the municipality level (2400 units) • Outsourced Institutions organised under Civil Law entrusted with the granting of State Aid • Members to the so-called “Social Partnership“ (Chamber of Commerce, Labour Union, Chamber of Agriculture, Association of Austrian Industry etc.) • EU Commission services

  11. State Aid Coordination in Austria • Pre-accession Phase: Considerations about assignment of competencies • From 1994 to 2003: Federal Chancellery • From 1 May 2003 to 31 Jan. 2009: Federal Ministry of Economics and Labour • From 1 Feb. 2009: Federal Ministry of Economy, Family and Youth Distinction of tasks in State Aid and Structural Funds Policies between Ministry and Chancellery

  12. MS Functions in the Field of State Aid Policy External FunctionsInternal Functions representation in EU bodies ensuring fair competition contribution to strategy making implementation of rules formal communication legislation on aid measures addressee of decisions planning of programmes coordination and consultancy

  13. Problems in the Field of State Aid Policy • highly decentralised institutional structure • no harmonized legal basis • interdisciplinary character of aid granting • measures subject to discretionary competences • requirements for adaption pursuant to EU State Aid Law • unintended spill-over effects • dissemination of know-how • conflict of interests because of agencies partly operating on commercial terms

  14. Characteristics of domestic State Aid Policy • Principal design by authorities responsible on substance • Predominant competence of the Federal Ministry of Economy, Family and Youth in the fields of regional aid and aid to small and medium-sized enterprises • Additionality versus Subsidiarity • Aid granting administered on the basis of Civil Law („Privatwirtschaftsverwaltung“) • General Measures in the form of indirect subsidization (i. e. tax measures cover only a small portion in overall volume of State Aid)

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