Global Trade Alert

On 8 November 2013, Germany notified the EC about its intention to prolong all aid schemes under the Regional State Aid program (RAG) 2007-2013.
 
Already in June 2013, the Commission adopted a new Regional State Aid scheme for 2014-2020 and extended the period for the old scheme until 30 June 2014. This extension of the legal framework motivated Germany to seek a prolongation of the guarantee schemes.
 
Potential beneficiaries are all SMEs with less than 1000 employees located in the respective state ("Bundesland"). The overall amount of guarantees for the period of 2008-2014 is listed below.
 
All aid schemes (listed below) 'have already been declared compatible with the internal market.' (para. 5, letter from the EC to Germany, Brussels 20.12.2013)
 
To decide on the existence of state aid, it is therefore necessary to investigate the initial decisions from 2007-2008.
 
In the decision about the 'Guarantee scheme of Land Brandenburg', the EC finds that:'The measure conveys an advantage by relieving the beneficiaries of the guarantee from the costs which they would have to bear under normal market conditions since, without the intervention by the State, the borrowers would obtain working capital loans only at higher costs, if at all.' (para. 34, letter from the EC to Germany, Brussels 16 July 2007).
 
Similar paragraphs can be found in all other Guarantee schemes. The EC concluded in 2007 that: 'The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists.' (para. 35)
 
List of the Guarantee schemes:

• SA.37676 08/11/2013 Guarantee scheme of Brandenburg for investment and working capital loans - EUR 340 million
• SA.37677 08/11/2013 Guarantee scheme of Saxony-Anhalt for working capital loans - EUR 330 million
• SA.37678 08/11/2013 Guarantee scheme of Thüringen for investment and working capital loans - EUR 330 million
• SA.37681 08/11/2013 Guarantee scheme for Thüringer Aufbaubank for investment and workingcapital loans (TABBürgschaftsprogramm)(shares funds with SA.37678)
• SA.37686 08/11/2013 Guarantee scheme of Mecklenburg-Vorpommern for investment and working capital loans - 300 millionSA.37705 08/11/2013 Federal guarantee scheme for Eastern Germany for investment and working capital loans - EUR 1'020 million
• SA.37680 08/11/2013 Saxon State Guarantee Programme - EUR 768 million

 
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.