State aid plan a waste of time, Monti told

By Peter Chapman

Date: 09/09/04

MARIO Monti, the commissioner for competition, has been forced to scrap plans to make it easier for governments to hand out small grants to companies.

His state aid experts drew up a blueprint for smaller amounts of aid to industry worth no more than €1 million over three years. But other Commission departments dismissed the plan as a waste of time.

"It has been buried," said one official. "There are some people who think all kinds of state aid are a distortion - and that it shouldn't be encouraged. Others thought the plan was a lot of hassle with zero practical importance. In light of these views, the president's cabinet said "scrap it"."

Under the scheme, countries would have been free to devise small-scale aid plans that do not fit in with the strict confines of the Union's state aid rulebook.

The aid would have been targeted at areas "that contribute directly towards achievement of horizontal objectives of community interest".

Spendthrift member states would have had to keep a close track of money spent "to eliminate any potential risks of distortion".

Officials would, in turn, have waved through the aid at top speed - cutting down the uncertainty that usually dogs state handouts referred to Brussels for approval. But rules freeing relatively small amounts of aid from the EU approval process - worth €100,000 over three years - are unchanged, the official added.

European Commissioner for Competition, Mario Monti, was forced to abandon his plan on easier rules for smaller government grants to companies after resistance from other Commission departments.

European Commission: DG Competition http://ec.europa.eu/competition/index_en.html

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