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PR(05)46: New State Aid Guidelines on compensation for the provision of public services


The EFTA Surveillance Authority has introduced a new Chapter 18C to its State Aid Guidelines – state aid in the form of compensation for public services. The new Guidelines will provide greater legal certainty for the financing of such services.

The new Guidelines spell out the conditions under which such state aid can be found compatible with the EEA Agreement. The EFTA States may define what a public service should embrace and compensate undertakings who provide such services for the costs resulting therefrom. However, compensation that exceeds the cost of the public service, or is used by companies for other purposes than for fulfilling the public service obligation entrusted to them, would constitute incompatible state aid. If such aid were to be paid out, it would have to be repaid to the State.

The new Guidelines lay down rules on how costs and revenues should be allocated – in particular when companies carry out activities outside the provision of a public service – to ensure that the amount of compensation does not exceed what is necessary to cover the costs in discharging the public service obligation, taking into account the respective receipts and a reasonable profit.

The EFTA States are asked to agree to bring their existing aid schemes into line with the Guidelines within 18 months from the notification of today’s decision to them. The EFTA States are asked to communicate such an acceptance within one month. The acceptances will be published in the EEA Section of and the EEA Supplement to the Official Journal of the European Union.

For further information, please contact:

Mr. Rolf Egil Tønnessen, Deputy Director, Competition and State Aid Directorate,
tel. (+32)(0)2 286 18 56; or
Ms. Annette Kliemann, Senior Officer, Competition and State Aid Directorate,
tel. (+32)(0)2 286 18 80.

21 December 2005

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