State aid should not be at level field for small peripheral EU countries

Former Prime Minister Alfred Sant said that state aid itself is not, and cannot be in fact, subject to a level playing field for small peripheral countries within the European Union. During an exchange of views with EC Commissioner for Competition, Dr. Sant asked whether the time has come for the Commission to audit the real impact of current state aid rules as modernised, including post state airlines, in small peripheral EU countries . Dr Sant asked whether it was possible to carry out an audit of how state aid rules are functioning on the ground in these peripheral regions, given the need to promote economic convergence between regions of the Union, and the need to counter diseconomies of scale and other disadvantages in regions where economic and social development has lagged.
Dr. Sant said that in many cases, state interventions would have minimal to no impact on the single European market. As the Greek crisis has shown, imbalances resulting from a divergence of economic performance between widely positioned partners in the Union can create upheaval. State aid applied across the board according to equivalent rules may be contributing further to economic divergences. What works well to regulate big conglomerates, can become meaningless or counterproductive in peripheral areas connected to distant metropoli through a single currency.
Dr. Sant said that economic divergences between European partners has been growing to the extent that it is now a crucial problem for Europe. Those parts of Europe which are trailing, lack enough instruments that would help them stimulate new activity in their territories. They fail to attract outside investment to their side. And they cannot back directly, through state intervention, their local entrepreneurial “champions”, such as they are, in new efforts to create projects and jobs.
‘For instance, a state with a booming defence industry has many ways by which to camouflage research and development state aids as part of this industry and of the national security interest. Meanwhile, small states and those which are not in the defence business lack this possibility.’ Said Dr. Sant.
Reacting to Dr. Sant’s intervention, Commissioner Vestager said that one of the important issues is that member states can do much more by themselves, within the same set of rules. ‘This can be done on two conditions: One is transparency. They have to tell their citizens what they are doing, how they spend tax payers’ money. Second, governments must evaluate what schemes can actually be decided to work and to deliver to the same result. And in doing that I think we can have a much more level playing field.’ Said Ms Vestager.

You can follow Dr. Sant’s and Ms. Vestager’s interventions on this link :

Maltese Version – ‘PAJJIŻI ŻGĦAR U PERIFERJALI TAL-UE JEĦTIEĠU GĦAJNUNIET SPEĊJALI TAL-ISTAT’

Il-Kap tad-Delegazzjoni Laburista fil-Parlament Ewropew staqsa wasalx iż-żmien li l-Kummissjoni Ewropea tippermetti li stati żgħar u fil-fruntiera tal-Unjoni Ewropea jitħallew jagħtu għajnuniet speċjali lil kumpaniji ta’ pajjiżhom ħalli b’risq l-investiment li jsir, jibdew jingħelbu d-differenzi bejn l-ekonomiji Ewropej sinjuri u l-ekonomiji Ewropej l-oħra li mhumiex ilaħħqu magħhom. Dr. Sant qal li l-għajnuna tal-istat, jekk applikata l-istess għal kullħadd, ma tippermettix riżultat ugwali u li jirnexxu f’pajjiżi periferjali żgħar tal-Unjoni Ewropea. Waqt diskussjoni mal-Kummissarju tal-Kompetizzjoni Margrethe Verstager, Dr Sant qal li l-Kummissjoni għandha tanalizza l-effetti reali li qed iħallu r-regoli attwali tal-għajnuna tal-istat. Dan għandu jinkludi l-għajnuna tal-istat lil-linji tal-ajru li ħadu l-għajnuna u li qegħdin fil-pajjiżi fil-periferija tal-Unjoni Ewropea.
Dr Sant staqsa hux possibbli li jsir awditjar dwar ir-regoli tal-għajnuna tal-istat f’dawn iż-żoni tal-periferija biex titjieb il-konverġenza ekonomika bejn r-reġjuni Ewropej, u l-bżonn li nagħmlu tajjeb għall-iżvantaġġi u spejjeż żejda li għandhom ekonomiji żgħar oħra f’reġjuni fejn l-iżvilupp ekonomiku u soċjali baqa’ lura.
Dr Sant qal li f’ħafna każijiet, l-intervent tal-istat jew ma jħallix effett jew ikollu impatt żgħir fuq is-suq komuni Ewropew. Kif uriet il-kriżi tal-Greċja, l-iżbilanċi li jinħolqu bejn l-imsieħba tal-UE li għandhom ekonomiji differenti, jistgħu joħolqu ħafna inkwiet. L-għajnuna tal-isat, kif applikata l-istess f’kull pajjiż u bl-istess regoli tista’ tikkontribwixxi għal aktar differenzi fl-ekonomiji. Li hu tajjeb għal kumpaniji kbar, jista’ ma jagħmilx sens jew iħalli effett negattiv f’reġjuni periferjali li huma magħquda bl-istess munita ma’ ċentri metropolitani ’l bogħod.
Dr Sant qal li d-diverġenzi ekonomiċi bejn l-imsieħba Ewropej kibret tant li saret problema kruċjali fl-Ewropa. Dawk l-inħawi tal-Ewropa li qed jaqgħu lura, ma għandhomx biżżejjed strumenti li jgħinuhom jistimulaw attivita’ ġdida fit-territorji tagħhom. Ma jirnexxilhomx jattiraw investiment ġdid lejhom. U ma jistgħux jgħinu direttament, bl-għajnuna tal-istat, l-imprendituri lokali, kif inhuma, bi sforz biex jinħolqu l-proġetti u l-impjiegi. ‘Pereżempju, stat li għandu industrija ta’ difiża b’saħħitha għandu ħafna modi kif jaħbi l-għajnuna tal-istat għar-riċerka u l-iżvilupp fi ħdan din l-industrija u fl-interess tas-sigurta’ nazzjonali. Safrattant, pajjiżi żgħar u dawk li mhux qegħdin fin-negozju tad-difiża, ma għandhomx din il-possibilita’. Qal Dr Sant.
B’reazzjoni għall-intervent ta’ Dr Sant, il-Kummissarju Vestager qalet li waħda mill-kwistjonijiet l-aktar importanti hija meta stat membru jista’ jagħmel ħafna aktar waħdu, fi ħdan l-istess regoli. ‘Dan jista’ jsir fuq żewġ kondizzjonijiet: waħda minnhom hija t-trasparenza. Iridu jgħidu liċ-ċittadini tagħhom x’qed jagħmlu, kif qed jonfqu l-flus miġbura mit-taxxi. It-tieni, il-gvernijiet iridu jevalwaw l-iskemi li jistgħu jaħdmu u li jwettqu l-istess riżultat. U billi jagħmlu dan, kulħadd ikollu aktar ċans li jirnexxi.’ Qalet il-Kummissarju Vestager.