EU state-aid chief says $357 billion projects need oversight
By Bloomberg
Projects selected for the European Union’s 315 billion-euro ($357 billion) investment plan shouldn’t seek to sidestep state-aid control lest they invite future legal battles, said the EU official in charge of the unit policing state subsidies that skew competition.
Skipping state-aid reviews would be “very ill-advised,” said Gert-Jan Koopman, the European commission’s deputy director-general for state aid. To ensure efficiency the regulator is designing a streamlined process for the program, in cooperation with the European Investment Bank, he said.
“What investors and project developers want is legal certainty,” Koopman said in an interview. “If there are clear state-aid issues they actually have an interest in getting a positive ruling from our side in order to ensure the project doesn’t come unstuck at a later point in time.”
EU Commission President Jean-Claude Juncker has put the investment plan at the center of efforts to jumpstart the European economy. As EU nations and the European Parliament work towards signing off on the plan, state-aid concerns are still casting a shadow.
“The commission has to be involved in it so everything is clear beforehand,” Slovakian Finance Minister Peter Kazimir told reporters after a meeting of EU finance ministers in Brussels last week. “It would be very unfortunate if a project is prepared, financed and then accused of illegal state aid.”
Competition Constraints
EIB President Werner Hoyer told finance ministers that the competition constraints had the potential to cripple the program if left unresolved. The EU has to approve large government subsidies to make sure they don’t give any one company an unfair advantage over its rivals.
“If most of what we have on our minds and you have in your project proposals falls under the category of state-aid regulation, then we can forget about a considerable part of the proposals that are on the table,” Hoyer said in public debate. “Then I don’t believe that 315 billion can be achieved.”
Koopman said that the commission has already started work on how to keep state-aid concerns from getting in the way. He said the EIB can help by screening projects as they get started, and infrastructure projects are considered “pro-growth” and shouldn’t present many difficulties.
“We want to obviously be as helpful as possible, this is really a major priority,” Koopman said of the investment plan.
Individual projects can be part of the investment plan if they get funding from the proposed European Fund for Strategic Investments, a collaboration between the commission and the EIB that will offer loans and guarantees.
National governments, development funds and private investors would all be able to design and take part in projects that have the investment program’s backing.
The commission said last year that any national complementary support will be assessed under a “simplified and accelerated” state-aid assessment to ensure there is no overcompensation of projects.
“There shouldn’t be too many difficulties” in the reviews, Koopman said. “But if it’s state aid it’s state aid and we cannot simply completely ignore it.”