Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

Regional aid, also known as investment aid, is paid in the form of grants by the industrial development agencies to businesses in order to support new investment and new employment in productive projects in Europe's most disadvantaged regions. Such aid must be in accordance with each country’s regional aid map, as approved by the European Commission, which has responsibility for the regional aid guidelines.

The guidelines for the period 2014 to 2020 are being revised as part of the state aid modernisation reform package. The final iteration of the guidelines was adopted by the College of Commissioners on 19 June 2013. The guidelines will enter into force on 1 July 2014. The Commission initially proposed a complete ban on aid for investments made by large enterprises in the more developed assisted areas, known as C areas. This would have meant that such aid would not be permitted in Ireland. The proposal presented significant challenges for Ireland and the implications could have been very serious in terms of our enterprise agencies being able to attract investment into disadvantaged regions in Ireland.

Following significant engagement by Ireland, at both official and political levels, the final proposal represents considerable progress from the initial Commission proposal in December 2012. The compromise agreed with the Commission will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation.

With regard to population coverage, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country’s population for the period 2007-13. For 2014-20, that will increase to 51.28%. It was threatened with reduction by half.

It should be noted that the Commission has announced a transition period of six months for the new guidelines. Therefore, the new rules will not take effect until 1 July 2014. All of the country, including those areas not entitled to regional aid, can qualify for other forms of aid such as research, development and innovation aid, SME investment aid, training aid and aid for environmental protection.

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