State aid: Commission approves €3 billion French scheme to support companies in five outermost regions
The European Commission has approved, under EU State aid rules, a €3 billion French scheme to compensate companies in five French outermost regions for the additional costs borne when operating in those territories until 2027.
The French measure
France notified the Commission a €3 billion scheme to compensate companies in Guadeloupe, Guyane, Martinique, Mayotte and La Réunion for the additional costs they face when operating in these French outermost regions.
This scheme replaces a scheme originally approved by the Commission in March 2017 and prolonged twice (SA.60288 and SA.63693).
Under the scheme, which will run until 2027, the aid takes the form of:
- a reduced rate on the docks due (i.e. a tax applied on products imported into or produced in the French outermost regions);
- a total exemption from the docks due for companies with a turnover below €500.000.
Companies active in certain sectors, such as lignite, coal extraction and financial services, cannot benefit from the scheme.
The Commission’s assessment
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(a) of the Treaty on the Functioning of the European Union (‘TFEU’), which allows aid to support the most disadvantaged regions, and the Regional aid Guidelines (‘RAG’).
The Commission found that the scheme:
- Is necessary and appropriate to compensate companies for the additional costs they face when operating in the French outermost regions. Ensuring that companies remain competitive is essential to the economy of these outermost regions, and contributes to their regional development;
- Is proportionate as the aid is limited to the minimum necessary to offset the additional cost incurred by the companies for operating in these regions.
- Will not have undue negative effects on competition and trade in the EU.
On this basis, the Commission approved the French measure under EU State aid rules.
Background
Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States.
In the RAG, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the TFEU (a- and c-areas respectively). On this basis, member states notified their regional aid maps to then Commission for approval.
On 21 January 2022, the Commission approved the map of France for granting regional aid from 1 January 2022 to 31 December 2027 within the framework of the revised RAG. In May 2022, the Commission approved an amendment to France’s regional aid map.
The non-confidential version of the decision will be made available under the case number SA. 100513 in the State aid register on the Commission’s 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 Competition Weekly e-News.
