ANNOUNCEMENT 01 Jan 2009
In January 2009, the European Commission approved a new R&D incentive in the Czech Republic.
NUMBER OF INTERVENTIONS
the letter from the EC to the Czech Republic - Brussels, 20.XI.2008 C(2008) 7331 corr. Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N662_2007 >
On 15 November 2007, the Czech authorities notified, according to Article 88(3) of the EC Treaty, the above mentioned aid scheme.
The measure provides aid for research and development projects carried out before entering into competition in the market. The general objective is to ensure research and development for future rational industrial production in order to ensure continuous and sustainable creation of research and development knowledge for industrial production and its rapid and effective exploitation.
The overall budget is CZK 11 035 million (around EUR 427 million). The measure provides for aid in the form of direct grants.
The duration of the aid scheme is 9 years, until 31 December 2017, from the date of approval by the Commission (i.e. 1 January 2009).
The beneficiaries of the aid scheme are all kind of companies from the industrial production sector, including research organisations.
The commission found that the measure constitutes State aid within themeaning of Article 87 (1) of the EC Treaty and gave the followingassessment:
"The notified scheme allows a limited number of enterprises to be relieved, by means of State resources, of a part of the R&D costs which they would normally have to bear themselves. Consequently, the financial aid from the State strengthens the position of the enterprises in relation to their competitors in the Community and therefore has potentially distorting effects on competition. Products of benefiting enterprises are or might be subject to intra-Community trade and therefore the aid is likely to affect trade between Member States." (par. 29 of the letter from the EC to the Czech Republic - Brussels, 20.XI.2008 C(2008) 7331 corr.)
According to the EC, the Czech authorities have committed to fulfil the requirements for reporting and monitoring set out in section 10.1 of the R&D&I Framework. The Czech authorities have also committed to notify all projects where the aid amount exceeds those set under point 7.1 of the R&D&I Framework. They will also ensure full co-operation and the provision of adequate information in a timely manner. The Commission therefore considers the conditions related to reporting and monitoring to be satisfied.
In consequence, the Commission considers that the aid measure is compatible with the EC Treaty in application of its Article 87 (3) (c).
A state measure in the GTA database is assessed solely in terms of theextent to which its implementation affects the extent ofdiscriminationagainst foreign commercial interests. On this metric,the state aidproposed here is discriminatory.