ANNOUNCEMENT 14 Jul 2009In July 2009, the British government announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
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=3_N421_2009 >
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 industryand in the fisheries and aquaculture sector. The Welsh Assembly Government however confirmed that any aid awarded will not exceed the maximum amount EUR10 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.