How to make best use of State aid for social investment?
The Clean Industrial Deal commits to a just transition that delivers quality jobs and empowers people, building on their skills while promoting social cohesion and equity across all regions. It also refers to securing skills and quality jobs for social fairness.
State aid can be an effective tool for achieving these goals.
To help Member States make the best use of relevant State aid rules, the Directorate-General for Competition has published Guidance on State aid measures for social support and social investments (Press release). It brings together an overview of existing State aid rules in this area, for greater transparency and ease of use.
Is all public financing for social support subject to EU State aid rules?
No, it is not. Only public support that is State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the EU is subject to EU State aid rules. The Commission Notice on the notion of State aid explains whether public financing constitutes State aid, based on the Commission’s own interpretation of Article 107 (1) TFEU, and the case law of the Union Courts. For example, the Notice explains situations where public support to solidarity-based social security systems, public hospitals forming an integral part of a national health service and education does not fall under EU State aid rules.
Very small amounts of support (‘de minimis’) are deemed not to meet all the criteria laid down in Article 107(1) TFEU. De minimis support can be granted to a single undertaking:
- if the support does not exceed EUR 300 000 over any period of three years on a rolling basis under the conditions of the General De minimis Regulation and
- for the provision of services of general economic interest (SGEIs), if the aid does not exceed EUR 750 000 over any period of three years on a rolling basis under the conditions of the SGEI De Minimis Regulation.
What are services of general economic interest and where can I find information on applicable State aid rules?
Services of general economic interest (SGEIs) are public service obligations (PSOs) entrusted to one or more providers. Public financial support may prove necessary where the market alone would not supply the SGEI or would supply it under different conditions in terms of objective quality, safety, affordability, equal treatment or universal access. This also applies to services that address social needs, for example healthcare, medical care in hospitals, childcare, support for access to and reintegration into the labour market, and care and social inclusion of vulnerable groups. The provision of social and affordable housing services for disadvantaged households or socially less advantaged groups can also constitute an SGEI.
Is there a simple way to grant State aid for social support and social investments in line with EU State aid rules?
Yes, there is. While in principle, Member States are required to notify all State aid to the European Commission and to implement it only after the Commission's approval, certain aid measures are exempted from the notification obligation. This allows Member States to quickly provide aid if conditions limiting the distortion of competition in the Single Market are met. These conditions are laid down in block exemption regulations. Member States are responsible for ensuring full compliance with the conditions of the applicable block exemption regulation and must submit only summary information on bock-exempted State aid, together with the weblink to the full text of the aid measure, which is published by the Commission on its Competition case search. The General Block Exemption Regulation contains for example provisions applicable to training aid, aid for the recruitment of disadvantaged workers or aid for the employment of people with disabilities.
The Commission is currently reviewing the General Block Exemption Regulation, to cut red tape and promote necessary investments, while keeping a level playing field in the Single Market. That review considers, among others, the conditions applicable to aid for the recruitment of disadvantaged workers and the employment of workers with disabilities, aid to social enterprises, aid for upskilling and reskilling workers, as well as aid to SMEs and start-ups which also brings social benefit. The published Guidance has not yet taken this latest review into account as it is still ongoing.
More information sources
On the EU Social Economy Gateway you will find the outcomes of relevant workshops, a study on “State aid and the social economy”, a thematic discussion paper on State aid support for the social economy - State aid fundamentals, which describes the basic concepts and principles relevant for social economy measures.