Territorial Cooperation and ESIF funding to become State Aid compatible under new Commission proposals

On 6 June 2018, the Commission published its proposed amendment to the EU’s state aid Enabling Regulation (Council Regulation (EU) 2015/1588) on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU).

The proposal aims to improve the interplay of EU funding programme with state aid rules. It will enable the Commission to make targeted changes to the current state aid rules so that national money, including those from the European Structural and Investment Fund, can be managed at national level, and centrally managed EU funds can be combined seamlessly without distorting competition in the EU’s single market.

The Commission is proposing to include two new categories in the Enabling Regulation: “Member State’s financing channelled through or supported by EU financial instruments” and “Aid for European Territorial Cooperation”.

These new categories will enable the Commission to adopt block exemptions in order to ensure that the effect on competition and trade between Member States is limited.

The proposal has no implications for the EU’s budget.