ANNOUNCEMENT 17 Mar 2010In March 2010, the government of Bulgaria announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the European Commission to Bulgaria - Brussels, C (2010) - http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N108_2010
By notification of 17 March 2010, the Bulgarian authorities notified an aid scheme 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" (referred to as the Temporary Framework).
The scheme intends to provide support to the Bulgarian agricultural sector which has been severely hit by the financial an economic crisis. The Bulgarian authorities have provided information on the impact of the crisis on the Bulgarian economy and in particular on agriculture which is a sector of material importance for the Bulgarian economy.
The aid will be provided in the form of direct grants. The aid volume available under this scheme is estimated at BNL 20 000 000 (approximately EUR 10 225 994).
Undertakings active in the primary production, processing and marketing of agricultural products. The Bulgarian authorities estimate the number of beneficiaries to be over 1000 undertakings.
The Commission concluded that the measure contains state aid and gave the following assessment:
"The aid at issue is financed out of State resources and benefits certain undertakings (cf. paragraph (17)). 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-Union 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-Union trade takes place. The aid measure could therefore distort competition and affect trade between Member States and consequently constitutes aid pursuant to Article 107(1) of the TFEU." (par. 28 of the letter from the European Commission to Bulgaria - Brussels, C (2010) )
Article 107(3)(b) TFEU 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 107 (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 107 (1) TFEU, it is compatible with the internal market according to the Article 107 (3)(b) TFEU. 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. 29-41 of the letter ).
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.