General Block Exemption Regulation Must Focus on Quality

The European Commission has recently been working on the revision of the General block exemption Regulation (the GBER), which is meant to reduce the administration linked to granting state aid.

It determines categories of aid which do not need to be notified to the EC and thus represent a key economic instrument (in 2011, state aid granted under the GBER amounted to 17.2 billion EUR). Nonetheless, functioning of the current system showed some shortcomings. The EC, therefore, decided to review it with the declared aim of clarifying and modifying it so that the evaluation of large schemes or ex-post monitoring would contribute to a better compliance, preventing deadweight losses and distortive aid.

The Confederation of Industry of the Czech Republic, the largest alliance of employers in the country, believes that simplification of the rules is necessary and appreciates the improved clarity of the draft. Nevertheless, the Confederation thinks that it also contains some shortcomings, for example, the proposed tightening of the conditions for the qualification of large enterprises for the GBER. The Confederation, as well as other stakeholders like BUSINESSEUROPE, is concerned for example with the intention to limit support for larger investment projects, i.e. to impose restrictions to aid schemes for which the planned yearly public expenditure exceeds 0,01 % of the state’s GDP.

State aid schemes should be assessed on their quality or ability to address the problems of the respective region, not on the company’s size or the extent of the schemes.