Written answers

Thursday, 9 June 2011

Department of Enterprise, Trade and Innovation

Departmental Bodies

6:00 pm

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein)
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Question 29: To ask the Minister for Jobs, Enterprise and Innovation his plans to renegotiate EU-imposed grant ceilings throughout the State. [14723/11]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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1The various EU State Aid regulations and frameworks set out the types of activities that can be supported by the Member States and stipulate the maximum percentage of eligible costs that can be aided. These ceilings vary according to the type of aid measure involved but typically allow higher rates of aid for small and medium sized enterprises. Most measures are horizontal and do not have differentiated aid rates depending on the location of a company in the EU.

By contrast, the Regional Aid Guidelines govern the areas in which Member States may grant regional aid, more commonly known as investment aid. Investment aid is intended to promote the economic development of certain disadvantaged areas within the European Union in order to redress regional disparities. The Guidelines specify rules for the selection of regions which are eligible for regional aid and define the maximum permitted levels of this aid. Under Ireland's current Regional Aid Map, regions covering 50% of the population are entitled to grant Regional Aid.

Under the Regional Aid Map, the highest rates were afforded to the Border, Midlands, West (BMW) region. For the period of 2007 to the end of 2010, the region qualified for a rate of 30% for large firms; for medium and small firms the rates were 40% and 50% respectively. In accordance with the Guidelines, a reduced rate of aid for the BMW region is applicable from 1 January 2011: 15% for large companies, 25% and 35% for medium and small firms respectively. The maximum aid rates for eligible regions within the Southern and Eastern Region remain at 10% for large companies, 20% and 30% for medium and small firms respectively. No scope exists to renegotiate aid rates within the current Guidelines, which are due to expire on 31 December 2013.

To launch the work on the new Guidelines beyond 2013, the European Commission hosted a workshop for Member States in Brussels last March. The purpose of the workshop was to gather information on the operation of the current Guidelines and the experiences of Member States and to give Member States the opportunity to express preliminary views on the issues that should be reviewed in the future framework.

Following consultation with stakeholders, my Department made preliminary submissions to the Commission both in advance and after the workshop. There are as yet no proposals from the Commission on a future Regional Aid Framework. The next steps are that the Commission is to undertake an Impact Assessment, which will involve questionnaires to Member States. This is due to be followed by further multilateral meetings in advance of adopting new Guidelines by end of 2012. The process of notification of the new Regional Aid Maps for the Member States will continue throughout 2013, after which the new Regional Aid Guidelines will enter into force. My Department will continue to liaise with stakeholders throughout the process.

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