IMPORTANT LEGAL NOTICE - The information on this site is subject to adisclaimerand acopyright notice
 
Contact   |   Search  

 << HOME
   
Enlargement process
Acceding countries
Candidate countries
Potential candidate countries
Financial assistance

  Projects

Who does what?
Direct Access
Press corner
Enlargement videos
Picture gallery
Turkish Cypriot community
Chapter 6 - Competition Policy
Graphical element
 

 December 2004

Background

The competition acquis is based on Article 31 (State monopolies of a commercial character), Articles 81-85 (Rules applicable to undertakings), Article 86 (public undertakings and undertakings with special or exclusive rights) and Articles 87-89 (Rules applicable to State aid) of the EC Treaty, as well as Articles 65 and 66 of the ECSC Treaty, which expired in 2002. The control of mergers is done on the basis of the EC Merger Regulation 4064/89 (as amended). In the field of State aid, part of the acquis is addressed under other Chapters, namely transport, agriculture and fisheries. The Commission Directives concerning the liberalisation of the energy, transport as well as telecommunications and information technologies sectors are also addressed under the respective chapters.

In assessing whether the Candidate Countries can comply with the competition acquis and withstand the competitive pressures of the internal market resulting from the full application of this acquis, the Commission examines whether undertakings operating in the Candidate Countries are accustomed to operating in an environment such as that of the Community.

State of play

Negotiations on chapter six were opened with Cyprus, Czech Republic, Estonia, Hungary, Poland and Slovenia in the first half of 1999. Negotiations with Latvia, Lithuania and Slovakia were opened in the first half of 2000. Negotiations with Malta and Romania were opened in the second half of 2000 and with Bulgaria in the first half of 2001.

Negotiations on this chapter were closed with Cyprus, Czech Republic, Hungary, Estonia, Latvia, Lithuania, Poland, Malta, Slovakia and Slovenia in December 2002. Negotiations on the chapter with Bulgaria were closed in June 2004 and with Romania in December 2004.

Compliance with the acquis

The latest assessment of each candidate country’s compliance with the acquis under this chapter heading, can be found in the 2004 Regular Reports and in the Comprehensive Monitoring Reports, available at:
http://ec.europa.eu/enlargement/archives/key_documents/reports_2004_en.htm.

Country by country

Bulgaria

  • Chapter opened: March 2001
  • Status: Closed in December 2004 (provisionally closed June 2004)

Cyprus (New Member State)

  • Chapter opened: May 1999
  • Status: Closed December 2002 (chapter provisionally closed in June 2002)
  • Transitional arrangements: phase-out of incompatible fiscal aid by the end of 2005

Czech Republic (New Member State)

  • Chapter opened: May 1999
  • Status: Closed December 2002 (chapter provisionally closed in October 2002)
  • Transitional arrangements:
    • Restructuring of the steel industry to be completed by 31 December 2006.

Estonia (New Member State)

  • Chapter opened: May 1999
  • Status: Closed December 2002 (chapter provisionally closed in November 2001)
  • Transitional arrangements: none

Hungary (New Member State)

  • Chapter opened: May 1999
  • Status: Closed December 2002
  • Transitional arrangements:
    • Phase-out of incompatible fiscal aid for SMEs by the end of 2011
    • Conversion of incompatible fiscal aid for large companies into regional investment aid; the aid will be limited to a maximum of 75% of the eligible investment costs if the company started the investment under the scheme before 1 January 2000, and to 50% if the company started the investment after 1 January 2000; in the motor vehicle industry the aid is further limited, and set at a level that corresponds to 40% of the maximum aid ceiling (e.g., where the above-mentioned regional aid ceiling for other types of investment is 75%, the formula gives 40% x 75% = 30%).
    • Phase-out of incompatible fiscal aid for off-shore companies by the end of 2005
    • Phase-out of incompatible fiscal aid granted by local authorities by the end of 2007

Latvia (New Member State)

  • Chapter opened: May 2000
  • Status: Closed December 2002 (chapter provisionally closed in November 2001)
  • Transitional arrangements: none

Lithuania (New Member State)

  • Chapter opened: May 2000
  • Status: Closed December 2002 (chapter provisionally closed in November 2001)
  • Transitional arrangements: none

Malta (New Member State)

  • Chapter opened: November 2000
  • Status: Closed December 2002 (chapter provisionally closed in October 2002)
  • Transitional arrangements:
    • Phase-out of incompatible fiscal aid for SMEs by the end of 2011
    • Conversion of incompatible fiscal aid for large companies into regional investment aid; the aid will be limited to a maximum of 75% of the eligible investment costs if the company has obtained the entitlement for the tax exemption before 1 January 2000, and to 50% if the company has obtained the entitlement for the tax exemption after 1 January 2000
    • Aid for restructuring of the shipbuilding sector during a restructuring period lasting until the end of 2008
    • Phase-out of operating aid under the Business Promotion Act by the end of 2008
    • Adjustment of the market in the importation, stocking and wholesale marketing of petroleum products under Article 31 of the EC Treaty by the end of 2005

Poland (New Member State)

  • Chapter opened: May 1999
  • Status:Closed December 2002
  • Transitional arrangements:
    • Phase-out of incompatible fiscal aid for small enterprises by the end of 2011
    • Phase-out of incompatible fiscal aid for medium-sized enterprises by the end of 2010
    • Conversion of incompatible fiscal aid for large companies into regional investment aid; the aid will be limited to a maximum of 75% of the eligible investment costs if the company has obtained its permit before 1 January 2000, and to 50% if the company has obtained it after 1 January 2000; in the motor vehicle industry the aid is further limited, and set at a level that corresponds to 30% of the eligible costs.
    • With regard to state aid to environmental protection, transitional arrangement agreed for investments that relate to standards for which a transitional period has been granted under the Chapter Environment and for the duration of that transitional period, whereby the aid intensity is limited to the regional aid ceiling with a 15% supplement for SMEs; for existing IPPC installations covered by a transitional period under the Chapter Environment, the level of 30% aid intensity accepted until end 2010; for the IPPC-related investment not covered by a transitional period under the Chapter Environment, the level of 30% aid intensity accepted until 31 October 2007; for large combustion plants, an aid intensity of 50% was agreed for investments that relate to a transitional period granted under the Chapter Environment
    • Restructuring of the steel industry to be completed by 31 December 2006.

Romania

  • Chapter opened: November 2000
  • Status: Closed in December 2004
  • Transitional arrangements:
    • Phase-out of incompatible fiscal aid by 31 December 2011 under the Law on Free Trade Areas for undertakings, which signed commercial contracts before 1 July 2002. The State aid is granted for regional investments and the aid net intensity must not exceed the rate of 50% Net grant equivalent (up to 65% for SMEs provided that the total net aid intensity does not exceed 75%). In the motor vehicle sector, the total aid shall not exceed a maximum of 30% of the eligible investments costs.
    • Phase-out of incompatible fiscal aid by 31 December 2010 under the GEO on Deprived Areas for the undertakings, which were given the permanent investor certificate before 1 July 2003. The State aid is granted for regional investments. The aid net intensity must not exceed 50% Net grant equivalent (up to 65% for SMEs provided that the total net aid intensity does not exceed 75%). In the motor vehicle sector, the total aid shall not exceed a maximum of 30% of the eligible investments costs.
    • The Accession Treaty contains a safeguard clause in the area of Internal Market as well as a specific safeguard that will allow postponing the envisaged date of accession by one year to January 2008 (see below under chapter 31). For Romania, any serious shortcomings observed in the 2005 Commission’s report in the area of Competition Policy, especially as regards the State aid enforcement record, can activate either of the safeguard clauses. The use of the postponement safeguard clause shall require a decision by the Council acting by qualified majority (normally unanimity is required) on the basis of a Commission recommendation if it is based on shortcomings in Romania’s fulfilment of specific conditions in the Competition area. In addition, the Accession Treaty provides for a mechanism whereby the State aid granted before accession and after 1 September 2004 will be reviewed after accession and, if found to be illegal, impose reimbursement, for the case that Romania does not sufficiently improve the State aid enforcement record.

Slovakia (New Member State)

  • Chapter opened: May 2000
  • Status: Closed December 2002 (chapter provisionally closed in October 2002)
  • Transitional arrangements:
    • Conversion of incompatible fiscal aid to one beneficiary in the motorvehicle manufacturing sector into regional investment aid; the aid will be limited to a maximum of 30% of the eligible investment costs.
    • Incompatible fiscal aid to one beneficiary in the steel sector to be discontinued at the end of 2009 or when aid reaches a pre-determined amount, whichever comes first. The objective of the aid is to facilitate the ordered rationalisation of excess staffing levels, the resulting total cost being comparable to the aid.

Slovenia (New Member State)

  • Chapter opened: May 1999
  • Status: Closed December 2002 (chapter provisionally closed in November 2001)
  • Transitional arrangements: none
- updated: 17/12/2004
 
Top
 
 
White line