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State aid

Data and policy analysis

Scoreboard - Conceptual and methodological remarks

Scope of the Scoreboard
What is State aid?
General Methodological remarks
Objectives of aid
Categories of aid
Methods of assessing the aid element
State aid in the context of the financial and economic crisis
Sources of data

Scope of the Scoreboard

The Scoreboard covers State aid as defined under Article 107(1) Treaty on the Functioning of the European Union ("TFEU") (ex Article 87(1) of the EC Treaty) that Member States granted from 1 January 2009 to 31 December 2009.

State aid data refer to the implementation of Commission decisions but exclude cases which are still under examination. In addition, it includes information on block exempted cases measures registered by the Commission. Aid granted for Services of General Economic Interest ("SGEI") are excluded from the Scoreboard. Also excluded from the report is expenditure through Community funds and other Community instruments. General measures and public subsidies that have no affect on trade and do not distort or threaten to distort competition are not dealt with in the Scoreboard as they are not subject to the Commission’s investigative powers.

State aid is a form of state intervention used to promote a certain economic activity. It implies that certain economic sectors or activities are treated more favourably than others and thus distorts competition because it discriminates between companies that receive assistance and others that do not. In order to determine whether a measure constitutes State aid, a distinction has thus to be drawn between the situation where the support is directed at certain undertakings or the production of certain goods, as specified in Article 107(1) TFEUof the Treaty, and the situation where the measures in question are equally applicable throughout the Member State and are intended to favour the whole of the economy. In the latter case, there is no State aid within the meaning of Article 87107(1) TFEU.

This selective character thus distinguishes State aid measures from general economic support measures. Most nation-wide fiscal measures would be regarded as general measures as they apply across the board to all firms in all sectors of activity in a Member State. The distinction is, however, not always clear-cut. For example, a measure that is open to all sectors may be selective if there is an element of discretion by the awarding authorities. On the other hand, the fact that certain companies might benefit more than others from a measure does not necessarily mean that the measure is selective. The interpretation of the concept of selectivity has evolved over the years following various Commission decisions and Court rulings. Details of the most important cases can be found on the Commission website or in recent Annual Competition Reports.

The distinction between State aid measures and general economic support measures should be borne in mind when interpreting certainsome of the data included in the Scoreboard. They Some of the detailed statistical tables may in the online Scoreboard point to a stable level or a decrease of State aid for some horizontal objectives such as employment or training in a show that in some Member State.s the amount of State aid for some horizontal objectives such as employment or training has fallen or remained stable. However, this This does not however indicate a decrease mean that in public expenditures on these activities. have fallen. Instead, the Member States may have increased spending on general economic support measures.

Another important area concerns aid which compensates for the provision of SGEI. In its judgment in the Altmark case , the Court of Justice ruled that compensation to undertakings that perform a SGEI is not State aid, provided certain conditions are fulfilled. As a result, similar measures are now classed as aid, or non-aid depending, for example, on whether a certain kind of tender was used. All aid compensating for SGEI is therefore excluded from the Scoreboard. In contrast, in cases where part of the aid is found to overcompensate for the SGEI the appropriate amount is included, e.g., in the Deutsche Post case.

The following measures or areas are not dealt with in the scope of the State aid Scoreboard:

  • Aid whose recipients are not enterprises
    • Aid to households
    • Aid to the handicapped people
    • Aid for infrastructure
    • Aid for educational institutes, hospitals, public housing
    • Aid for public vocational training centres
    • Aid given directly to developing countries
  • General measures and other measures
    • Differences between the various tax systems and general social security systems in Member States (depreciation, social security deficit, etc.)
    • Quotas, public procurement, market restrictions, technical standards
    • Tax schemes that account for the specific nature of some economic activities (co-operatives, owner enterprises, self-employed, etc.). However, a lower-than-the-standard rate of corporation tax for small businesses constitutes an aid and has been included.
    • General reduction in VAT (for example, foodstuffs in the United Kingdom)
  • Community funds and instruments
  • Aid granted by supranational and multinational organisations
    • Financing by EIB and EBRD
    • Support to the European Space Agency
  • Individual types of aid
    • Defence
    • Public Works
What is State aid?

State aid is a form of state intervention used to promote a certain economic activity. State aid implies that certain economic sectors, regions or activities are treated more favourably than others. State aid thus distorts competition because it discriminates between companies that receive assistance and others that do not. Hence, it presents a threat to the well-functioning running of the internal market. The authors of the TFEU (ex EC Treaty) recognised this risk and set up a system which, while it is centred on the principle that State aid is incompatible with the common market, nevertheless accepts that the granting of such aid can be justified in exceptional circumstances.

The Articles 107 and 108 TFEU (ex Articles 87 and 88 EC Treaty) establish the basic rules.The basic rules of the system are outlined in Articles 87-88 of the Treaty. Those rules have been amplified over the years by secondary legislation and court rulings. For more information on the legal and procedural framework, see the legislation pages on this site.

Another source of information on State aid can be found in the Vademecum Community Rules on State Aid. The following is an extract from the Vademecum.

The point of departure of EU State aid policy is laid down in Article 107 TFEU (ex Article 87(1) of the EC Treaty). This article provides that State aid is, in principle, incompatible with the common market. Under Article 108 TFEU (ex Article 88 EC Treaty), the Commission is given the task to control State aid. This article also requires Member States to inform the Commission in advance of any plan to grant State aid (notification requirement).

The authors of the Treaty did not suggest that the Commission should try to monitor and control all types of measures that could affect companies. Community State aid rules apply only to measures that satisfy all of the criteria listed in Article 107(1) (ex Article 87(1)), and more in particular:

(a) Transfer of State resources:

State aid rules cover only measures involving a transfer of State resources (including national, regional or local authorities, public banks and foundations, etc.). Furthermore, the aid does not necessarily need to be granted by the State itself. It may also be granted by a private or public intermediate body appointed by the State. The latter could apply in cases where a private bank is given the responsibility to manage a state funded SME aid scheme.

Financial transfers that constitute aid can take many forms: not just grants or interest rate rebates, but also loan guarantees, accelerated depreciation allowances, capital injections etc.

(b) Economic advantage:

The aid should constitute an economic advantage that the undertaking would not have received in the normal course of business. Less obvious examples of transactions satisfying this condition are given below:

  • A firm buys/rents publicly owned land at less than the market price;
  • A company sells land to the State at higher than market price;
  • A company enjoys privileged access to infrastructure without paying a fee;
  • An enterprise obtains risk capital from the State on terms, which are more favourable than it would obtain from a private investor.

(c) Selectivity:

State aid must be selective and thus affect the balance between certain firms and their competitors. Selectivity is what differentiates State aid from so-called general measures (namely measures which apply without distinction across the board to all firms in all economic sectors in a Member State (e.g. most nation-wide fiscal measures)).

A scheme is considered selective, if the authorities administering the scheme enjoy a degree of discretionary power. The selectivity criterion is also satisfied if the scheme applies to only part of the territory of a Member State (this is the case for all regional and sectoral aid schemes).

(d) Effect on competition and trade:

Aid must have a potential effect on competition and trade between Member States. It is sufficient if it can be shown that the beneficiary is involved in an economic activity and that he operates in a market in which there is trade between Member States. The nature of the beneficiary is not relevant in this context (even a non-profit organisation can engage in economic activities).

The Commission has taken the view that small amounts of aid (de minimis aid) do not have a potential effect on competition and trade between Member States. It therefore considers that such aid falls outside the scope of Article 107(1) (ex 87(1)).

General remarks on the methodology applied in the Scoreboard Methodological remarks

As a general rule, figures represent actual expenditure (or actual revenue foregone in tax measures). It is recalled that yearly expenditure may not be identical with either commitment or budgetary appropriation in a given aid scheme for that year. Where yearly expenditure was not available, the budget appropriation or the amount that the planning programme provides was used instead, after consultation with the Member State. Where no figure was available, an estimate was made on the basis of the figures from previous years.

All figures were compiled in national currency at current prices, then converted into Euros (where necessary) and further on expressed in constant 2000 prices but re-referenced on the year 2009. All figures are given in million Euro (or billion where appropriate).

Historical data were also updated to include reimbursement of incompatible aid and to include figures on public support that, after investigation by the Commission, has been deemed as constituting "non-notified" aid.

Where the Commission decided that the character of the State aid measure altered to be State aid (and previously considered as not constituting State aid), the Scoreboard includes that aid. For example, following an examination of Irish corporation tax, the Commission decided in December 1998 that this existing scheme constituted State aid. As a result of this decision, there was an apparent increase in the level of State aid in Ireland although this increase did not represent any voluntary change in the Irish Government's State aid policy.

The Scoreboard focuses on State aid expenditure for the year 2009. Given that annual figures do not always allow for reliable conclusions on changing medium and long-term trends, the report also includes a trend analysis by comparing the periods 2004 – 2006 with 2007 - 2009.

Objectives of aid

The aid schemes have beenare broken down by according to their sector or objective:

  • Agriculture and Fisheries
    • Agriculture
    • Fisheries
  • Manufacturing/Services
    • Horizontal objectives
      • Research, development and innovation
      • Environment
      • Small and Medium-sized Enterprises
      • Employment Aid
      • Training Aid
      • Regional aid not elsewhere classified
      • Other objectives
    • Particular sectors
      • Manufacturing
      • Services
      • Coal mining
      • Other non-manufacturing
      • Transport (Airlines, Inland Waterways, Maritime, Road and combined)

Due to the particularities associated with aid to agriculture, fisheries and transport, the Scoreboard is generally looking at total aid less these sectors i.e. total aid to industry and services.

It should be noted that due to data constraints, several parts of the Scoreboard focus on total aid less aid granted to the agricultural, fisheries and transport sectors.

When comparing horizontal and sectoral objectives, aid for rescue and restructuring has been included under particular sectors as it is deemed to have a similar distortive effect on competition.

Categories of aid

State aid represents a cost or a loss of revenue to the public authorities and a benefit to recipients. However, the aid element, i.e. the ultimate financial benefit contained in the nominal amount transferred to the beneficiary depends to a large extent on the form the aid is provided.

Grants and tax exemptions
Grants and tax exemptions are types of aid transferred in full to the recipient. They represent the majority of aid granted in most Member States. They may be subdivided depending on whether the aid was granted through the budget or through the tax or social security system. Below is a list of aid instruments where the aid element is equal to the capital value of aid:

  • Grant
  • Interest subsidy that the recipient directly receives.
  • Tax credit and other tax measure, where the benefit is not dependent on having a tax liability (i.e. if the tax credit exceeds the tax due, the excess amount is repaid).
  • Tax allowance, tax exemption, and rate relieve where the benefit is dependent on having a tax liability. .
  • Reduction in social security contributions.
  • Grant equivalent e.g. sale or rental of public land or property at prices below market value.

Equity participation
It is necessary to determine whether a financial transfer by the public authorities in the form of equity participation is an aid to the recipient or a matter of the public sector engaging in a commercial activity and operating like a private investor under normal market conditions. For this reason, any forms of equity participation were grouped under this category.

Soft loans and tax deferrals
Soft loans and tax deferrals cover a transfer of aid in which the aid element is the interest saved by the recipient during the period for which the capital transferred is at disposal. The financial transfer takes the form of a soft loan or tax deferral. The aid element is much lower than the capital value of the transfer. The following aid instruments come under this category:

  • Soft loans whether from public or private sources.
  • Participatory loans from public or private sources.
  • Advances repayable in the event of success.
  • Deferred tax provisions (reserves, free or accelerated depreciation, etc.)


A guarantee is typically expressed by the nominal amount guaranteed. The aid element is much lower than the nominal amount since it corresponds to the benefit which the recipient receives free of charge or at a lower than the market rate if a premium is paid to cover the risk. However, if losses are incurred under the guarantee scheme, the total loss, net of any premiums paid, is included, since it can be considered as a definitive transfer to the recipient. Pursuant to the Commission's Notice on guarantees (OJ C 155, 20.6.2008, p. 10), the aid is granted at the moment when the guarantee is given and not when the guarantee is invoked or payments are made under the terms of the guarantee.


Methods of assessing the aid element

Grants and tax exemptions
The aid element is equal to the amount of aid granted or its equivalent.

Equity participation
In line with established Commission policy, such interventions constitute aid when a private investor operating under normal market conditions would not have undertaken such an investment. See Commission Communication "Application of Articles 87 and 88 of the EEC Treaty and of Article 5 of Commission Directive 80/723/EEC to public undertakings in the manufacturing sector", OJ No C 307 of 13.11.1993, p3. This method is based on calculating the benefit of the intervention to the recipient.

Soft loans and tax deferrals
The aid element is lower than the capital values of the aid. Where a Member State fails to provide the aid element, a proxy of 15% of the total amount lent by the government is estimated (compared with 33% before 1995). This downward adjustment is explained by the lower level of the aid element that results from generally lower rates of interest in Member States when compared with previous periods.

Where a Member State does not indicate the reimbursement ratio in case of a reimbursable advance, the aid element is estimated to be 90% of all advances as the repayment ratio has shown to be very low on average.

The aid element is much lower than the capital value guaranteed. Where the exact amount of the aid element is not available, the losses to the Government are estimated. Where only the capital value guaranteed is available, the aid element is estimated to be 10% of that value.

State aid in the context of the financial and economic crisis

An aid measure that gives support to the financial sector qualifies as crisis measure if it was adopted under specific State aid rules introduced in the context of the current global financial crisis. A crisis measure which however was approved prior these specific State aid rules do also count as such. In this respect, those aid measures are classified as sectoral aid. The volumes of such crisis measures may be excluded from the total of sectoral aid with a view to achieving a true picture on State aid expenditure without the distorting effect of the crisis measures.

Where actual expenditure was not available, Member States provided an estimate on the aid element for measures implemented during 2009. If no estimate was reported and only for statistical purposes in the context of the Scoreboard, the Commission services applied the standard method of estimating the aid element. With respect to crisis measures, the standard method was applied as follows:


  • For guarantee schemes the aid element is estimated at 10% of the guaranteed amount.
  • For ad hoc measures for sound banks the aid element is estimated at 10% of the guaranteed amount.
  • For banks in difficulty, usually notified as individual cases (rescue and restructuring cases) the aid element is estimated at 20% of the guaranteed amount..
  • The basis for the estimation is the average outstanding guarantee volume for 2009.
  • For recapitalisation measures the aid element is estimated at the full recapitalisation amount for 2009.
  • For impaired assets measures the aid element is estimated to the amount which has been established in the decision.
  • For restructuring measures the aid element is estimated to correspond to the provisions in the restructuring guidelines.

Aid granted under the Temporary Framework also qualifies as crisis measures. As to point 5.1 of the Temporary Framework, the simplification of the rules on short-term export credit insurance is not considered to represent a particular category of aid expenditure for the purpose of the Scoreboard and hence was excluded from the aggregation of the data.

Concerning the reporting of aid granted under the Temporary Framework, the general rule was applied:

  • In instances where a Temporary Framework measure is (i) a new ad hoc measure, (ii) a new scheme or (iii) a new framework scheme under which a number of new schemes may be implemented, the Member State simply reports expenditure under this Temporary Framework measure.
  • In instances where a Temporary Framework measure (i) modifies an existing aid measure or (ii) the Member State uses one or more existing aid measures for its implementation, and hence aid is granted under Temporary Framework conditions, the Member State reports the aid amounts (including the aid element) under the corresponding Temporary Framework measure. By contrast, all aid that falls outside the aforementioned conditions (i) and (ii) shall be reported under the case number of the initially authorised non-Temporary Framework measure. For restructuring measures the aid element is estimated to correspond to provisions in the restructuring guidelines.
Sources of data

The Commission services in charge of State aid compiled the data for the Scoreboard on the basis of annual reports from Member States. A few data were unavailable and were completed by estimates. The Commission's services provided figures for their respective sectors in accordance as outlined below.

Since 2005, the Commission collates expenditure figures from Member States on the basis of Commission Regulation (EC) No 794/2004 of 21 April 2004 (Chapter III and Annex IIIA, IIIB and IIIC on annual reporting). Annex IIIA covers all sectors except agriculture and fisheries, Annex IIIB covers agriculture and Annex IIIC fisheries.

State aid to the coal industry is governed until 31 December 2010 by a specific legal framework, the Coal Regulation 1407/2002 . Furthermore, information is summarised in the Commission's Annual Communication to the Council on aids in this sector. Figures are broken down into aid for current production and, aid not relating to current production (i.e. special social security measures for miners and aid to cover inherited liabilities).

For rail transport, the figures are those submitted by the Member States. For the vast majority, the amounts are not subject to prior notification.

Data are also checked against Commission Decisions, national publications on the award of aid, national accounts, draft budgets and other available sources.

The following statistical data used in the Scoreboard have been obtained from Eurostat (the Statistical Office of the European Communities)

  • gross domestic product (GDP) at market price
  • implicit deflator of GDP


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