Interreg Baltic Sea Region is bound to comply with the State aid rules which apply in the EU and the European Economic Area (EEA). Non-compliance with State aid rules leads to cuts of Programme co-financing to projects and project partners receiving State aid may receive only a lower Programme co-financing rate.
Therefore, organisations which intend to apply for funding from the Programme need to understand what State aid is and how the activities in the project can be carried out in line with the relevant rules.
What is State aid?
A company which receives support from public funding sources, such as Interreg Baltic Sea Region, may gain an advantage over its competitors through this support. Furthermore, the support can distort competition and affect trade between Member States. The EU Treaty wants to prevent such effects on the market and therefore generally prohibits State aid. However, in some circumstances such support is necessary for a well-functioning and equitable economy. Therefore, the Treaty leaves room for a number of policy objectives for which State aid can be considered compatible and stipulates exemptions.
How to comply?
In general, the MA/JS expect that only few projects in Interreg Baltic Sea Region will be State aid relevant – as in the past. However, as more private enterprises may participate in projects from 2014 until 2020, the likelihood of State aid relevant projects increases. If State aid relevant activities are part of a project proposal, the activities will not automatically be ineligible under Interreg Baltic Sea Region. A number of practical options are in place to enable projects to be supported in such a case, including the so-called De minimis support and the General Block Exemption Regulation (GBER).
Each partner must complete a State aid self-declaration as part of the full-fledged application (step 2) for the MA/JS to assess if a project is State-aid relevant. During project implementation those project partners that carry out State aid relevant activities need to provide further information and documents, as well as to follow specific monitoring and reporting requirements.
What to read?
Applicants and finance managers should familiarise themselves with the following documents, already before applying for a project:
• The Programme Manual provides an introduction to the State aid rules of the Programme in chapter F.1.5. For example: What is State aid? Which instruments exist? What to consider and what to submit at which project stage?
• The State aid fact sheets provide detailed information, including: What steps have to be taken to identify State aid relevant activities? What is de minimis and how does it work? What is the General Block Exemption Regulation and how does it affect the co-financing rate?