Mr. Patrick Rochford:

In terms of state aid, the committee is probably aware there is currently a state aid modernisation initiative under way in the Commission. Part of the process is a review of the various guidelines in place. One of the more important ones for Ireland concerns regional aid. The Commission is also examining areas such as de minimisaid, broadband, research and development, and the risk capital guidelines. In the past six months, new regulations have been adopted for regional aid, de minimisaid, broadband and cinema communication. Other regulations are outstanding and they will have to be adopted in the next six months. I believe the deadline is July 2014. Of note for Ireland is the group block exemption regulation. It effectively covers categories of aid that are block exempted by the Commission. Covered in this regard are regional aid, risk capital and environmental aid. This means that one develops schemes under the block exemption. The likes of Enterprise Ireland and the IDA would develop schemes with regard to regional aid and they would not have to notify every support to every company to the Commission. Once there is notification under the scheme, it is fine and it is considered that it is complying with state aid guidelines, thus allowing those concerned to work away.
At present, regional aid is one of the more important categories for us. Reference was made to SMEs. Regional aid tends to be investment aid for companies to go to disadvantaged areas of Ireland. The main issue is that we are currently compiling the regional aid map for Ireland. It will be presented to the Cabinet in the next two weeks and there will be a Government memorandum after that. Provided we have a decision, it will be presented to the Commission. We will seek that the Commission approve the regional aid map for Ireland.

Those new guidelines will kick into place on 1 July 2014. Up to 51.28% of the population will be covered by the new regional aid maps. The counties outside of this map are exempt from providing investment aid to companies. There are, however, other forms of aid available such as risk capital, environmental aid for small and medium-sized enterprises, as well as research and development aid. That is the core focus of state aid for us.
The state aid modernisation initiative itself is the simplification of the process and to get more member states to use the block exemption schemes rather than notifying large projects to the Commission which takes up its time. Ireland tends to use the block exemption scheme, not the notification process. We do not notify or ask the Commission on ad hocschemes. Instead, we use the pre-notified schemes. Other member states do not tend to use them as much as we do which, in turn, creates problems for the Commission. Accordingly, the Commission’s proposals should not cause us any particular problems and we actually welcome them.
The only slight change for us would be the move from ex-anteto ex-postevaluation. Effectively, when we use the scheme and it is considered as part of the block exemption, the ex-antenotification means that the Commission has evaluated it and it is fine. The Commission is now moving to a phase of ex-postevaluation which will effectively mean, even though one has used the block exemption schemes and one is complying with the stipulated guidelines, the Commission can audit the schemes to be entirely sure there is compliance. That is a significant change for most member states, particularly for us. We are not used to having to tell individual companies that the Commission wants to audit the moneys we have given them. That will be a significant change for the agencies and the client companies. Issues around confidentiality and so on could arise that could be quite tenuous.