Czech Business Today
New Regional Aid Guidelines Will Lead to Investors’ Outflow
At end of 2013, the effectiveness of wide range of state aid instruments expired, and it was therefore necessary to adopt new legislation. The European Commission took advantage of this opportunity to propose a significant revision of the whole state aid system. While some changes, like acceleration of decision processes within the Commission or clarification of unclear rules, can be appreciated, others seem rather problematic.
The second category includes state aid reduction for large enterprises. From 1st July 2014 to 31st December 2020, the regional aid will be provided in all NUTS II regions except Prague, however, the support to large enterprises will be limited to 25 % of eligible costs, which is a decrease of 5–15% compared to the previous period. The Commission ́s justification of this approach is that large companies would invest in the region anyway, while small and medium- sized enterprises would otherwise not manage. I strongly disagree with this opinion. At the time when the EU is recovering from the crisis, such a solution, which can lead to a loss of investment incentives and outflow of investors, is inappropriate.
Oldřich Vlasák
Vice-President of the European Parliament
