STATE AID : KROES CONSIDERING SUPER BLOCK EXEMPTION.

Simpler is better when it comes to state aid seems to be the lesson from a report on block exemption regulations published by the European Commission on 8 January. This positive report has encouraged Competition Commissioner Neelie Kroes' plan to go one step further and propose a general all-encompassing block exemption regulation.

The block exemption regulations (BER) set out rules by which state aid is deemed to be allowable in certain situations - particularly in the fields of research and development, de minimis (very small amounts of aid), promotion of employment, training and the development of small and medium-sized enterprises (SMEs). They therefore allow member states to put through state aid measures without prior notification to the Commission. The report shows that in the first five years of the state aid block exemptions, 1,600 measures were taken in this way.

Commissioner Kroes hailed the regulations as largely successful and as having "brought clear benefits" - notably for SMEs, which has been the most popular and well-used BER. Between 2001 and 2005, of almost 1,300 aid measures in all, more than half were for SMEs, and aid of this type accounted for 1.5 billion in 2005. However, some member states complained of added administrative burdens and, for the Commission, the expected freeing-up of resources to tackle the most distortive cases was cancelled out by an increased overall case-load due to enlargement.

Over the period looked at in the report, the number of measures also increased. In 2001, there were only around 150 state aid measures brought in under the BER. By...