United Kingdom: Welsh Assembly Government Rescue and Restructuring Scheme for SMEs
Description
On 14 July 2009, the U.K. authorities notified, pursuant to Article 88(3) of the EC Treaty, the above-mentioned aid scheme.
The scheme contains two parts: one for rescue aid and one for restructuring aid. The rescue part of the scheme is aimed at helping small and medium-sized enterprises in difficulty to recover on the basis of temporary assistance aimed at keeping the firm afloat for the time needed to develop a restructuring or liquidation plan. The restructuring part of the scheme is aimed at helping small and medium sized enterprises in difficulty to reorganize their activities on the basis of a plan to restore their long term viability.
The scheme applies only to Wales. The scheme will apply to enterprises in all sectors except those operating in the coal and steel industry and in the fisheries and aquaculture sector. The Welsh Assembly Government however confirmed that any aid awarded will not exceed the maximum amount €10 million of aid per enterprise as set out in the Guidelines.
The Commission found that measures constitute State aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
" Under the scheme, U.K. authorities (the Welsh Assembly Government directly or through Finance Wales plc.) provide funds in the form of equity injections, debt write-offs, grants, loans and loan guarantees to undertakings in difficulty. These measures engage State resources. The terms on which the funding is provided are more favourable than the terms these companies would have been able to obtain in the open market. The aid element contained in the different instruments foreseen under the scheme gives an economic advantage to the beneficiaries. The aid granted in this manner may strengthen the position of these beneficiaries compared to that of their competitors in other Member States and must therefore be regarded as distorting competition and affecting trade between Member States. The aid is selective as it exclusively aims at SMEs in difficulty." (par. 26 of the letter from the EC to the UK - Brussels, 19.08.2009 C(2009)6547).
Aid under the scheme is granted to assist the rescue and restructuring of firms in difficulty. In view of this, the Commission has examined the scheme in the light of Article 87(3) (c) of the EC Treaty, and in particular, on the basis of the the Rescue and Restructuring Guidelines (R&R Guidelines). The Commission has accordingly decided not to raise objections against the notified measure, since it fulfils the conditions to be considered compatible with the EC Treaty.
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:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | Yes |
| 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 Discovered:
Implemented: Yes
Date of inception: 1 Sep 2009
Duration: 51 months
GTA Evaluation: Red
Source:
the letter from the EC to the UK - Brussels, 19.08.2009 C(2009)6547. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >
Government Response:
- 386 reads
