ANNOUNCED AS TEMPORARYNo
Interest payment subsidy
On 30 October 2009, the German authorities notified a temporary aid scheme ("Bundesregelung landwirtschaftliche Kleinbeihilfen") for granting limited amounts of compatible aid under the Temporary Framework for State aid measures to support access to finance in the current financial and economic crisis.
The German authorities consider that the crisis has considerably hit the agriculture sector, with the dairy and crop sector being particularly concerned. It is estimated that the decrease in producer prices has led to an income foregone in the German agriculture sector of some EUR6 billion.
The German authorities confirmed that the aid will be provided in transparent forms of aid, and in particular in the form of direct grants, interest rate subsidies, loans with an aid element which is calculated on the basis of the applicable reference rate and in the form of guarantees where the aid element is calculated either on the basis of notified methodologies, or on the basis of the safe harbour premiums laid down in the annex to the Temporary Framework.
The aid volume available under this scheme is estimated at EUR100 million. Aid can be granted from the approval of the scheme by the Commission until 31 December 2010. Beneficiaries are undertakings active in the primary production of agricultural products
The commission found that the measure constitutes State aid withinthemeaning of Article 87(1) of the EC Treaty and gave the followingassessment:
"The aid at issue is financed out of State resources and benefits certain undertakings (cf. point 2.6). Pursuant to the case law of the Court of Justice, aid to an undertaking is deemed to affect trade between Member States if that undertaking operates in a market open to intra-Community trade. The mere fact that the competitive position of an undertaking is strengthened compared with other competing undertakings, by giving it an economic benefit which it would not otherwise have received in the normal course of its business, points to a possible distortion of competition. The beneficiaries of the aid at issue operate on a market where intra-community trade takes place. The aid measure could therefore distort competition and affect trade between Member States and consequently constitutes aid pursuant to Article 87(1) of the EC Treaty." (par. 23 of the letter from the EC to Germany - Brussels, 23.11.2009 C(2009) 9171 final)
The Commission hasdecided to consider the aid compatible with the common market under Article 87(3)(b) of the Treaty.
A state measure in the GTA database is assessed solely in terms oftheextent to which its implementation affects the extent ofdiscriminationagainst foreign commercial interests. On this metric,the state aidproposed here is discriminatory.
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