Objectives and goalsClick to read
At the end of this module you will be able to:
Get a knowledge what the public aid is
Public aid fundamentals
What’s the public aid?Click to read
The State aid is one given to an entrepreneur by the state or from state funds, on terms more favourable than those offered on the market. Since the state aid can distort the rules of competition, it is allowed only in specific cases and under specific rules.
We are talking about public assistance, when all of 4 prerequisites occur:
→ 1. Support is granted by the State or comes from State funds
Types and forms of the public aidClick to read
Types of the public aid:
1. Horizontal - It is directed to all entrepreneurs, regardless of their place of business and sector of the economy, in order to solve a specific problem applies to aid in such areas as research, development, innovation, environmental protection and employment.
2. Regional - Aid intended to support the development of the least developed regions by promoting investment and job creation, in exceptional cases by granting operating aid.
3. Sectoral – the State aid granted exclusively to entrepreneurs in a specific economic sector (e.g., transport), as well as in sensitive sectors: coal industry, iron and steel industry, shipbuilding industry. To state aid granted in these sectors, due to their specific nature and the problems that occur (concerning, for example, overcapacity, capital-intensive nature of investments), different, more restrictive rules of state aid than the general rules often apply.
Public aids forms
The Public aid termsClick to read
Aid programs contain the legal basis for granting specific support to entrepreneurs and, at the same time, define the principles and conditions for granting support, among other things:
The state aid terms – legal acts of the European Union.
• The Treaty on the Functioning of the European Union (art.107 and 108).
• The EU Commission’s Decree (EC) No. 800/2008 of August 6, 2008 declaring certain types of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General Block Exemption Regulation)
The state aid terms - Solutions of Poland, Greece, Croatia, Spain and Italy.
Poland introduced assistance for entrepreneurs in the form of the Anti-Crisis Shield and the Financial Shield.
In Greece, the most important support mechanism for entrepreneurs was the repayable advance, which was paid in 7 cycles. The effectiveness of this measure was that the criteria for assistance were based mainly on losses recorded by entrepreneurs.
Aid solutions for entrepreneurs in Croatia included:
Aid solutions for entrepreneurs in Spain included:
In Italy, assistance to entrepreneurs has mainly been in the form of financial support for loan repayment and the adoption of legal solutions to facilitate their acquisition, in order to ensure liquidity.
Where to find information about the public aid?Click to read
Where to find information about the public aid? – The European Union Financial Aid
The European Guarantee Fund - The fund set up by the European Investment Bank with contributions from EU member states to protect businesses affected by the COVID-19 crisis. Through guarantees, the fund enables loans, guarantees, asset-backed securities, equity instruments and other financial instruments to be made rapidly available mainly to small and medium-sized enterprises.
The European Investment Fund and European Commission- Program- Loan Guarantees (COSME)
The European Commission. The state aid rules.
European Commission. State aid for 2021: Commission expands the scope of the General Block Inclusion Regulation - Frequently Asked Questions.
Ashurst.com. 2020 COVID-19 impact: navigating EU state aid.
European Commission. State aid for 2020: Commission gives green light to pan-European guarantee fund to allow up to €200 billion in funding for companies affected by the coronavirus pandemic in 21 member states.
Eif.org. 2020 COSME Loan Guarantee Facility (LGF).
The State aid provided to entrepreneurs in Poland is monitored by the President of the UOKiK, who has got the System for the Provision of Data on State Aid (SUDOP). The SUDOP database contains information on aid measures implemented in Poland, aid granted under aid measures implemented in Poland, any public aid and de minimis aid granted to a given beneficiary.
Key takeawaysClick to read
Tip 1: the State aid is aid granted to an entrepreneur by the state or by means of the state resources.
The State aid is granted to an entrepreneur by the state or with the state funds, on terms more favorable than those offered in the market. Since the state aid can threaten to distort the rules of competition, it is allowed only in specific cases and under specific rules.
Therefore, it is worthwhile to learn about the types and conditions of the public aid that can support an entrepreneur in difficulty.
State aid, availability, rules, forms of aid