Draft Community framework for state aid for research and development and innovation -- comments by 13 October (extract)

September 18, 2006

Brussels, 15 Sep 2006

The State Aid Action Plan adopted in June 2005 stated that the Commission would consider to create a Framework for R&D and Innovation. When prolonging the Community Framework for State aid for Research and Development in December 2005, the Commission had announced that all interested parties would receive an opportunity to submit comments with regard to the revision of the R&D-rules. Accordingly, a draft of the Community Framework for State Aid for Research and Development and Innovation was published on 20 April 2006, in order to give all interested parties the opportunity to submit comments on the measures proposed therein. Following this first consultation, a new draft has been published. Stakeholders have until 13 October 2006 to send comments to the Commission.

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Table of Contents

1. INTRODUCTION 4

  • 1.1. Objectives of State aid for Research and Development and Innovation 4

  • 1.2. State aid policy and R&D&I 4

  • 1.3. The balancing test for aid to Research and Development and Innovation 6
    • 1.3.1. The State Aid Action Plan: less and better targeted aid, balancing test for the assessment of aid 6

    • 1.3.2. Market failures 7

    • 1.3.3. Appropriate instrument 8

    • 1.3.4. Incentive effect and necessity of aid 8

    • 1.3.5. Proportionality of the aid 8

    • 1.3.6. Negative effects of the aid to R&D&I must be limited so that the overall balance is positive 8

  • 1.4. Motivation for specific measures covered by this framework 9
  • 2. SCOPE OF APPLICATION AND DEFINITIONS 10

    • 2.1. Scope of application of the framework 10

    • 2.2. Definitions 11

    3. STATE AID WITHIN THE MEANING OF ARTICLE 87 (1) OF THE EC TREATY 13

    • 3.1. Public research organisations and innovation intermediaries as recipients of State aid in the meaning of Article 87 (1) of the EC Treaty 13

      • 3.1.1. Public funding of non-economic activities 13

      • 3.1.2. Public funding of economic activities 13

  • 3.2. Indirect State aid in the meaning of Article 87 (1) of the EC Treaty to undertakings through publicly funded public research organisations 14

    • 3.2.1. Research on behalf of undertakings (Contract research or research services) 14

    • 3.2.2. Collaboration of undertakings and public research organisations 14
  • 4. COMPATIBILITY OF AID UNDER ARTICLE 87 (3)(B) OF THE EC TREATY 15

    5. COMMISSION ASSESSMENT OF THE COMPATIBILITY OF AID UNDER ARTICLE 87(3) (C) OF THE EC TREATY 16

    • 5.1. Conditions for compatibility applying to all measures 16

      • 5.1.1. Different degrees of analysis 16

      • 5.1.2. Incentive effect and necessity of aid 17

      • 5.1.3. Proportionality 18

      • 5.1.4. Measures subject to a detailed assessment 18

  • 5.2. Specific conditions for certain aid measures 19
    • 5.2.1. Aid for R&D&I projects 19

    • 5.2.2. Aid for technical feasibility studies 23

    • 5.2.3. Aid for industrial property rights costs for SMEs 24

    • 5.2.4. Aid for technological transfer 24

    • 5.2.5. Aid for young innovative enterprises 24

    • 5.2.6. Aid for process and organisational innovation in services 25

    • 5.2.7. Aid for innovation advisory services; aid for innovation support services 26

    • 5.2.8. Aid for the loan of highly qualified personnel

    • 5.2.9. Aid for innovation clusters
  • 6. COMPATIBILITY OF AID SUBJECT TO A DETAILED ASSESSMENT 28

    • 6.1. Methodology of the detailed assessment: R&D&I criteria for economic assessment of certain individual cases 29

    • 6.2. Positive effects of the aid 29

      • 6.2.1. Existence of a market failure 29

      • 6.2.2. Appropriate Instrument 30

      • 6.2.3. Incentive effect and necessity of aid 30

      • 6.2.4. Proportionality of the aid 31

  • 6.3. Analysis of the distortion of competition and trade 31

    • 6.3.1. Distorting dynamic incentives 32

    • 6.3.2. Creating market power 33

    • 6.3.3. Maintaining inefficient market structures 33
  • 6.4. Balancing and decision 34

    7. CUMULATION 34

    8. SPECIAL RULES FOR AGRICULTURE AND FISHERIES 34

    9. FINAL PROVISIONS 35

    • 9.1. Monitoring and reporting 35

    • 9.2. Appropriate Measures 37

    • 9.3. Entry into force, validity and revision 37

    [...]

    Full text

    Earlier related items:

    State aid: Commission adopts Guidelines on state aid to support risk capital investments in SMEs
    19 July 2006

    Commentary by the State Aid Group of the EAGCP on the "Draft Community Framework for State Aid R&D&I"
    10 July 2006

    Commissioner Neelie Kroes: "Less and better state aid for growth and jobs – the new rules on research, development and innovation, and risk capital", Informal Competitiveness Council 21 April 2006

    DG Competition Draft on a Community Framework for State Aid for Research and Development and Innovation -- Comments by 30 May (link)
    20 April 2006

    Commissioner Neelie Kroes: State aid reform - the case for research and innovation, European Business Summit
    17 March 2006

    Commissioner Neelie Kroes: Competition Policy's Contribution to Growth and Jobs -- Speech before EP Economic and Monetary Affairs Committee
    3 February 2006

    Competition Commissioner Neelie Kroes: Reforming Europe's State Aid Regime: An Action Plan for Change - Wilmer Cutler Pickering Hale and Dorr/ University of Leiden Joint conference on European State Aid Reform
    14 June 2005

    Commissioner Neelie Kroes: The State Aid Action Plan - Introductory remarks at open meeting of coordinators of the Economic and Monetary Affairs Committee, European Parliament
    7 June 2005

    State Aid Action Plan – frequently asked questions
    7 June 2005

    State Aid: Commission outlines comprehensive five year reform of state aid policy to promote growth, jobs and cohesion
    7 June 2005

    Competition DG
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