France : state aid in favour of hotel buisnesses in overseas territories
On 1 September 2008 the French authorities notified the European Commission regarding their intention to support local hotel businesses in overseas territories (DOM) in order to encourage regional development. According to the French authorities, this measure is necessary in order to maintain touristic attractivity in regions that are heavily dependent on the tourism industry.
The measure consists in financial support related to the renovation of hotel infrastructures of relative small size (under 100 rooms) and older than 15 years. The beneficiairies will receive up to 300'000 euros for room renovation (5'000 per room/max. 60 rooms). The aid is estimated to amount in total 13.5 million euros.
The aid will be effective from 1 January 2009 until 31 December 2013.
The Commission found that the measure constitutes State aid within the meaning of Article 87(1) of the EC Treaty.
The Commission assesses that the measure is selective, since the aid is only given to a limited number of businesses, providing them direct subsidies that would not be available in the absence of the related measure, which is likely to distort competition. The measure is likely to affect trade between member States since it applies to the tourism sector, where intra-Community trade exists. (par. 31-34 of the letter from the EC to France - Brussels, 17.04.2009 C (2009) 3015)
The Commission decided not to raise objections since the measure is compatible with the Common Market according to the Article 87(3)(a) EC Treaty. (par. 40 of the letter)
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
Any Evidence-Based Deliberation:
|Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations?|
|Is there any evidence that alternatives to the proposed measure were considered?|
|Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government?|
|Was such evidence identified?|
|Is such evidence publicly available?|
|Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives?|
|Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken?|
|Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory?|
|Did the government state its intention to review the measure within one year of implementation?|
Date of inception: 1 Jan 2009
Duration: 60 months
GTA Evaluation: Red
The letter from the EC to France - Brussels, 17.04.2009 C (2009) 3015 (french). Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >