Global Trade Alert

On 26 June 2009, the Estonian authorities notified a temporary aid scheme ("Ühisturuga kokkusobiv piiratud summas antav abi") 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 aid will be provided in the form of transparent forms of aid, as defined by the General Block Exemption Regulation, and in particular, in the form of direct grants, loans with an element which is calculated on the basis of the communication on the revision of the method for setting the reference and discount rates (2008/C14/02) and public guarantees where the aid element is calculated either on the basis of notified methodologies, or on the basis of the safe harbor premiums laid down in the annex A to the amended Temporary Framework.
 
The Estonian authorities estimate that under the scheme aid not exceeding EEK 3198 mio (approx. EUR 204 mio) will be granted in 2009 and 2010. The scheme applies to SMEs and large firms. The Estonian authorities estimated the number of beneficiaries will be over 1000
firms.
 
The Commission found that the notified measure constitutes state aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
 
"State resources are involved in the notified scheme since the aid is granted from national, regional and local resources, via the respective aid granting authorities at all levels. The measure is selective since aid is awarded only to certain undertakings. The measure conveys an advantage by making available limited amounts of compatible aid which would not be available to the beneficiaries without the measure. 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. The measure distorts or threatens to distort competition." (par. 25-29 of the letter from the EC to Estonia - Brussels, 13.07.2009 K(2009)5697).
 
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
 
The Commission referred to its Communication on the financial crisis (Temporary Framework) and concluded that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 31- 39 of the letter).
 
Prolongation of aid scheme N 387/09 Compatible limited amount of aid - State aid SA.32104.

On 16 December 2010, Estonia notified the prolongation of the abovementioned measure until 31 December 2011.
The notified prolongation of the existing aid scheme does not alter the Commission's previous assessment in its Decision of 13 July 2009. The Commission has accordingly decided not to raise any objections on the notified measure on the ground that it is compatible with the internal market on the basis of Article 107(3)(b) of the TFEU.
 
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.