Commission adopts de minimis Regulation for Services of General Economic Interest (SGEI)

On 25 April 2012 the European Commission adopted a Regulation that exempts from EU/EEA State aid rules aid of up to € 500 000 per company over a three-year period that is granted as compensation for the provision of Services of General Economic Interest (SGEI). Compensation of this amount is considered to be unproblematic as it is too low to affect trade and competition. The Regulation is the last pillar of the new package of state aid rules for SGEI. The SGEI Communication, Decision and Framework were adopted in December 2011.

Joaquín Almunia, Vice President of the Commission in charge of competition policy, said

"European citizens need both strong public services and an efficient internal market based on strong competition rules. This new exemption will facilitate the provision of many small, local public services and will also help the Commission focus its efforts on cases where state aid has a real impact on competition and trade between Member States".

The SGEI de minimis Commission Regulation sets out the conditions under which support granted to SGEI providers falls outside the concept of State aid within the meaning of Article 107 TFEU (Article 61 EEA).  Amounts of up to € 500 000 over three years are now deemed not to constitute aid since it does not affect competition or trade between Member States. This threshold is higher than the general de minimis thresholds in the field of state aid (€ 200 000 over three years) because it can be assumed that the support measures are at least in part compensating for the extra costs incurred for the provision of a public service.

The new Regulation is a major simplification for both public authorities and service providers, because it will considerably reduce the administrative burden for granting public service compensation for small SGEI. At the same time, it increases legal certainty, because it establishes a clear threshold, below which SGEI compensation does not constitute State aid within the meaning of EU/EEA rules.

Drafts of the new Regulation had been published for consultation in September 2011. The Commission received valuable contributions from Member States, European institutions and stakeholders which have been taken into account in the final version of the Regulation. In particular, conditions relating to the turnover of the provider and the size of the local authority granting the compensation have been removed. In the final version, only the condition related to the amount of aid (€ 500 000 over three years) has been maintained.

The de minimis Regulation will be in force until 31 December 2018.