The European Commission has approved Bulgaria's map for granting state aid between 2014 and 2020 within the framework of the new regional aid guidelines adopted by the Commission in June 2013 (see IP/13/569). The new guidelines set out the conditions under which Member States can grant state aid to businesses for regional development purposes. They aim to foster growth and greater cohesion in the Single Market.
Commission Vice President in charge of competition policy Joaquín Almunia said: “Bulgaria´s new regional aid map allows the Bulgarian authorities to promote investment throughout the country and further economic growth and cohesion in the Single Market. It also provides a basis for an easier and targeted use of regional development programmes co-financed by the European Structural Funds.”
Under Bulgaria's regional aid map, the entire territory of Bulgaria will be eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the European Union (TFEU) that allows Member States to grant aid in areas with a standard of living below EU average or high unemployment. The map will be in force from 1 July 2014 to 31 December 2020.
The map also defines the maximum aid intensities for large companies carrying out projects in the country at 50% of the total investment cost in five of Bulgaria's regions and at 25% in the Yugozapaden region. The proposed maximum aid intensity is for projects with eligible expenditure below €50 million. These percentages can be increased by 20 percentage points for investments carried out by small and 10 percentage points by medium sized enterprises.
Five regions in Bulgaria have a GDP per capita lower than 45% of the EU average and one - the Yugozapaden region - between 60% and 75% of the EU average. Under the regional aid guidelines 2014-20, areas with a GDP per capita below 75% of the EU average are eligible in priority for regional investment aid, as the main purpose of regional aid is to foster the development of the less advantaged regions of Europe. In comparison to the previous map, the overall aid intensity remains the same (50%) for all Bulgarian regions except for the Yugozapaden region where it drops to 25%, in line with the guidelines' principle to prioritise providing support to the most disadvantaged regions. The population coverage remains the same.
The regional aid guidelines set out the rules under which Member States can grant state aid to companies to support investments in new production facilities in the less advantaged regions of Europe, or to extend or modernise existing facilities. The ultimate purpose of regional state aid is to support economic development and employment. The regional aid guidelines contain rules on the basis of which Member States can draw up regional aid maps valid throughout the guidelines' period of validity. The maps identify in which geographical areas companies can receive regional state aid and at what proportion of the eligible investment costs (aid intensity). Eligible costs are the part of the total investment costs that may be taken into account for the calculation of the aid. On the basis of the guidelines, the Commission adopts a regional aid map for each Member State.
Article 107(3)(a) of the TFEU allows Member States to grant state aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment. The regional aid guidelines define these as regions with a GDP per capita below 75% of EU average and outermost regions.
The non-confidential version of today's decision will be made available under the case number SA.38667 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News