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C 108/12 EN Official Journal of the European Communities 17.4.

1999

STATE AID

Invitation to submit comments pursuant to Article 93(2) of the EC Treaty, concerning the
aid/measure C 75/98 (ex NN 45/98) — Belgium (Flanders) — Compensations under the manure
decree
(1999/C 108/05)

By the letter reproduced below, dated 21 January 1999, the — Decision of 19 March 1996 of the Flemish
Commission notified Belgium that it had decided to initiate the Government laying down rules on additional obli-
procedure under Article 93(2) of the EC Treaty. gations with regard to disposal and on assistance
with additional manure surpluses in areas where
more stringent standards for manure spreading
apply,
‘The Commission wishes to inform Belgium that, having
examined the information supplied by your authorities on
the aid/measure referred to above, it has decided to initiate
the procedure laid down in Article 93(2) of the EC Treaty. — Decision of 15 July 1997 of the Flemish
Government amending the Decision of 20
December 1995 of the Flemish Government
setting the compensation for the years 1996 and
1. PROCEDURE 1997 under Article 15(9) of the Decree of 23
January 1991 on the protection of the
Following receipt of a complaint that the Flemish environment against pollution by manure.
Government was paying illegal aids to farmers in
respect of their use of fertilisers and manure, the
services of the Commission, by letter of 4 February
None of these texts have been notified to the
1998, requested the Belgian authorities to supply
Commission in accordance with Article 93(3) of the
information about the implementation of the
EC Treaty. Furthermore, the Belgian authorities have
decision of 20 December 1995 of the Flemish
informed the Commission that payments have been
Government on compensation payable to farmers for
made to farmers who were eligible under the legis-
obligations under the legislation on fertilisers.
lation for 1996. For this reason the file has been
entered in the register of non-notified aids under the
number NN 45/98. However, the Commission has
This information was transmitted to the Commission noted the undertaking of the Belgian authorities in
directly by a letter of the Flemish Minister for the their letter of 7 August 1998 not to pay aid for
Environment and Employment of 18 March 1998, 1997 until the Commission has reached a decision
and by letter from the Permanent Representation of on the compatibility of the aid with the common
Belgium to the European Union of 31 March 1998. A market.
meeting between the representatives of the competent
Belgian authorities and the services of the Commission
took place on 15 April 1998. By telex of 10 July 1998 The Belgian authorities have informed the Commission
the Commission requested additional information from that it was the Flemish Government's intention to
the Belgian authorities. By letter of 7 August 1998, incorporate this compensation scheme into the
registered on 10 August 1998, the Belgian authorities Flemish aid programme under Council Regulation
replied to this request. (EEC) No 2078/92 on agricultural production
methods compatible with the requirements of the
protection of the environment and the maintenance
of the countryside (OJ L 215, 30.7.1992). To this
According to the information provided by the Belgian end, certain contracts took place between the
authorities, payments for farmers for obligations under competent Belgian authorities and the Commission
the legislation on fertilisers are based on four legal departments responsible for the implementation of
texts: Regulation (EEC) No 2078/92. However, the compen-
sation scheme has not so far been accepted by the
Commission for co-funding under the Regulation
— Decision of 20 December 1995 of the Flemish because of doubts as to the compatibility of the
Government on compensation payable to farmers compensation scheme in its present form with
for obligations under the legislation on fertilisers, certain provisions of the Regulation. In particular, by
letter of 7 February 1997, signed by Mr Sousa Uva,
Director of Directorate-General VI F II (Rural devel-
opment II), the services of the Commission informed
— Decision of 20 December 1995 of the Flemish the Belgian authorities that it was necessary for the
Government setting the compensation for the Commission to know how and to what extent the
years 1996 and 1997 under Article 15(9) of the agri-environmental measures in the framework of the
Decree of 23 January 1991 on the protection of Flanders' manure policy go beyond the Nitrates
the environment against pollution by manure, Directive. EC part funding of compulsory measures
17.4.1999 EN Official Journal of the European Communities C 108/13

was considered undesirable for several reasons. In any The more stringent restrictions came into effect
event, a request for inclusion of a measure within the immediately on 1 January 1996 in the following areas:
programmes approved under Regulation (EEC) No
2078/92 does not release a Member State from the
obligation to ensure that the procedures laid down — water catchment and conservation areas,
in Article 93 of the Treaty are respected before aids
are paid unilaterally to the beneficiaries.
— natural areas, nature reserves, forest land,

2. DESCRIPTION OF THE AID MEASURES — bird Directive areas,


2.1. MANURE POLICY IN FLANDERS

According to the Belgian authorities, current manure — valleys and ecologically valuable farmland,
policy in Flanders is based on the Decree of 20
December 1995 amending the Decree of 23 January
1991 on the protection of the environment against — nitrate-sensitive land,
pollution by fertilisers. This decree aims to reduce
the environmental problems caused by the enrichment
of surface water and groundwater and the leaching of — phosphate-polluted land.
phosphates and nitrates into the soil, with the risk of
penetration into ground and surface water. According
to the report on the environment and nature in
According to the Belgian authorities, the designation
Flanders, agriculture accounts for 56 % of the net
of the sensitive areas took account of the requirements
nitrogen and phosphate load on the environment.
of Council Directive 91/676/EEC of 12 December 1991
The discharging of ammoniac from livestock housing
concerning the protection of waters against pollution
and the spreading of slurry account for 21 % of
caused by nitrates from agricultural sources and
polluting emissions in Flanders.
Council Directive 79/409/EEC of 2 April 1979 on
the conservation of wild birds. The Commission,
however, considers that the designation of sensitive
areas in Belgium may not meet all the requirements
The manure decree sets out the objectives in relation of Directive 91/676/EEC and it has therefore instituted
to achieving and/or maintaining the requisite quality the procedures provided for under Article 169 of the
standards for soil, water (surface and groundwater) and Treaty against Belgium (1) for failure to implement
air. It provides for the gradual tightening of correctly Directive 91/676/EEC. The present Decision
restrictions on manure use. It thus allows for does not prejudice the conclusions which the
adjustments during a transitional phase. The Commission may reach in the infringement
standards governing fertiliser use are to be tightened procedures concerned.
gradually, except in particularly vulnerable areas,
namely water zones and nature zones where stricter
rules came into force immediately. The decree also
2.1.1. General limits for the application of fertilisers and
provides for a freeze on manure production and on
manure
the livestock headage in Flanders at the 1992 level.
In accordance with the decree, the following general
limits for the application of fertilisers and manure
apply from 1 January 1996 to 31 December 1998
To that end a local permit policy is being introduced. throughout Flanders, except for the water zones and
At the same time for larger-sized holdings permit will the nature zones. These limits are expressed in kg of
be cut by up to 25 % upon renewal. The livestock phosphorus pentoxide and in kg of nitrogen from
farming sector is given time (until 2002) to find chemical fertilisers and in kg of total nitrogen per
ways of reducing manure surpluses and their impact. year permitted, as shown in the table below.

(1) Infringement procedures 94/2239 and 97/4750.


C 108/14 EN Official Journal of the European Communities 17.4.1999

Nitrogen from chemical


Crop group Phosphorous pentoxide Total nitrogen
fertilisers

Grassland 170 250 450

Maize 160 (1996) 200 325

155 (1997)

150 (1998)

Crops with low nitrogen


requirement (*) 125 125 170

Other crops 150 225 325

(*) Including chicory, all fruit, shallots, onions, flax, legumes and carrots.

The Belgian authorities have also published the following limits as indicative of the targets they wish to
meet from 2003 onwards.

Nitrogen from Nitrogen from livestock,


Crop group Phosphorous pentoxide chemical manure and Total nitrogen
fertilisers other fertilisers

Grassland 125 250 250 450

Maize 100 130 225 275

Crops with low nitrogen


requirement (*) 100 70 125 125

Other crops 100 150 200 275

(*) Including chicory, all fruit, shallots, onions, flax, legumes and carrots.

In addition to these quantitative limits, on ordinary farmland it is prohibited to spread manure or other
organic fertilisers during the following periods: from 21 September to 21 January, on all Sundays and
public holidays, on all Saturdays, except those between 1 February and 15 May, at night (between 10 PM
and 7 AM), when ground is flooded, frozen or covered with snow.

2.1.2. Limits for the application of fertilisers and manure — the sensitive areas identified by the Flemish
in water zones Government as requiring stricter standards within
the sub-hydrographic reservoirs of surface water
Stricter standards apply in the water zones with a view intended for the production of drinking water,
to the production of drinking water or because they delimited in accordance with the Law of 26
are particularly sensitive to nitrogen leaching. The March 1971 on the protection of surface water
“water zone” is a collective name for: against pollution,
— the areas of nitrate-sensitive land where stricter
— water catchment areas and protection zones types standards are required as determined by the
II and III for groundwater, delimited pursuant to Flemish Government and delimited pursuant to
the Decree of 24 January 1984 laying down the Decree of 24 January 1984 laying down
measures for groundwater management, measures for groundwater management.
17.4.1999 EN Official Journal of the European Communities C 108/15

The following table shows the standards governing manure use applicable from 1 January 1996 for the
water zone. These rules are based on the yield standards for the crop groups listed and environmentally
acceptable losses for these zones. The quantities are expressed in kg of P2O5 and kg of nitrogen per ha per
year.

Nitrogen from Nitrogen from livestock,


Crop group Phosphorous pentoxide chemical manure and Total nitrogen
fertilisers other fertilisers

Grassland 120 200 200 350

Maize 100 150 170 275

Crops with low nitrogen


requirement 80 70 125 125

Other crops 100 150 170 275

In water zones, manure spreading is prohibited between 1 September and 21 January inclusive, except in
zones A and B of areas used for surface water collection where the prohibition extends to 15 February
inclusive.

2.1.3. Limits for the application of fertilisers and manure — forest areas, natural areas, nature development
in nature zones areas or nature reserves, as indicated in the rural
development maps provided for in the Law of 29
The “nature zone” is a collective name for: March 1962 on the organisation of national and
town planning, with a transitional measure
— valley areas and ecologically valuable farmland as applicable until 31 December 1997.
indicated on the rural development maps provided
for in the Law of 29 March 1962 on the organi- The table below shows the standards governing
sation of national and town planning, manure use applicable from 1 January 1996 for the
nature zone. These rules are based on the yield
— special protection zones delimited by the Decision standards for the crop groups listed and environ-
of the Flemish Government of 17 October 1988, mentally acceptable losses for these zones. The
quantities are expressed in kg of P2O5 and kg of
— specific habitats and adjoining buffer zones, nitrogen per ha per year.

Nitrogen from chemical


Crop group Phosphorous pentoxide Total nitrogen
fertilisers

Grassland 120 200 400

Maize 100 150 275

Crops with low nitrogen


requirement 80 70 125

Other crops 100 150 275

In nature zones, manure spreading is prohibited units per ha measured over the year. Family farms may
between 1 September and 21 January inclusive, and obtain temporary exemption from this ban.
on grassland areas of importance for the conservation
of birds, manuring may also be prohibited between 1
April and 30 June. Furthermore, it is prohibited to 2.2. THE AIDS
apply any fertiliser of any kind in forest areas,
natural areas, nature development areas or nature The objective of the aid scheme is to allow farmers
reserves from 1 January 1998, with the exception of with land in environmentally sensitive areas to be able
droppings from livestock grasing the land, with a to adapt to the more stringent standards on manure
maximum permitted stocking rate of 2 livestock use, and to compensate for the economic loss suffered
C 108/16 EN Official Journal of the European Communities 17.4.1999

by those farmers. The aid is calculated on the basis of 2.2.2.1. Compensation for decreases in production
income lost, having regard to normal agricultural
practice outside of the sensitive zones. According to Aid is paid automatically only in respect of grassland
the Belgian authorities, compensation was also and maize. For other crops, it is assumed that the
necessary to avoid social unrest. reduced levels of fertiliser use will not result in
decreases in production. However, in the latter case,
the farmer may obtain compensation if he is able to
provide evidence of losses.
2.2.1. Eligibility for aid
In accordance with the manure decree, aids are
payable to farmers whose holding lies, in whole or Compensation for decreases of production on grassland
in part, within a water zone or a nature zone. This
applies to 7 502 holdings out of a total of 40 673 Compensation for the change in yield of grassland is
holdings with arable land or livestock in Flanders calculated on the basis of the difference between the
(18,5 %). In terms of area, of a total of 649 223 ha permitted fertiliser standard in the areas outside of the
under arable land or livestock, 47 948 ha (7,5 %) falls sensitive zones, and the permitted standards in the
within a water zone and 21 919 ha (3 %) falls within a sensitive zones, with a distinction between areas
nature zone. situated in water zones and those situated in nature
zones. The objective of the aid is to compensate the
loss of yield and profitability caused by those re-
ductions.
2.2.2. The nature and intensity of the aid

Aid is granted to compensate farmers in the sensitive


zones for: The starting point for the calculation of the aid is the
average semi-gross margins (SGM) in BEF/ha for the
past three years according to the income tax code. A
distinction is made between land which is used for
— the decrease in production resulting from lower dairy farming and other grassland. For the purpose
fertilised and manure use, of calculating the SGM, Flanders is divided into 13
areas, depending on the agronomic characteristics of
the area concerned.
— additional manure disposal costs,

For milk-producing grasslands, the highest SGM is in


Antwerp Kempenland (55 700 BEF/ha), the lowest is
— additional manure storage costs,
in the Dunes area (33 167 BEF/ha) while the average
for Flanders as a whole is 44 160 BEF/ha. For non
milk-producing grasslands, the highest SGM is in the
— additional purchase of chemical fertilisers. sand/loam region of West Flanders (36 100 BEF/ha),
while the lowest is in the Dunes area (24 633
BEF/ha), while the average for Flanders as a whole is
31 941 BEF/ha.
The total budget for the measure for 1996 was BEF
427 511 868 broken down between the different
measures as follows:
For the water zones, compensation is based on the fact
that the maximum permitted level of nitrogen use is
set at 350 kg/ha compared with 450 kg/ha for the
— compensation for normal zones. This corresponds to a reduction of
reduced yield 22 %. According to the law of diminishing returns,
the Belgian authorities calculate that this will result
— grassland BEF 250 279 282 in a reduction of yields of 15 %. However the effect
on the profitability of the holding will be greater. After
discounting fixed costs, the Belgian authorities
— maize BEF 50 102 650
calculate that on average the SGM amounts to 40 %
of total yield. Thus a reduction of yield of 15 % will
— compensation for manure result in a 37,5 % reduction of the SGM
disposal costs BEF 65 486 397 (15 % × 100/40). The basis of the payment of compen-
sation for reduced yields in the area concerned is thus
— compensation for manure SGM × 37,5 %. However, in the water zones farmers
storage costs BEF 34 276 829 are permitted to use 50 kg/ha less chemical fertilisers.
This represents a saving of BEF 800 (50 kg N × 16
— compensation for purchase of BEF/kg). This sum is therefore deducted from the aid
additional fertiliser BEF 27 366 710 payable.
17.4.1999 EN Official Journal of the European Communities C 108/17

For the nature zones, compensation is based on the will result in a 17,5 % reduction of the SGM
same principles. In the nature zone, the maximum (7 % × 100/40). The basis of the payment of compen-
permitted level of nitrogen use is 400 kg/ha sation for reduced yields in the nature zones is thus
compared with 450 kg/ha for the normal zones, SGM × 17,5 %. In addition, the same reduction of aid
which corresponds to a reduction of 11 %. The of BEF 800 is made in respect of savings from reduced
Belgian authorities calculate that this will result in a fertiliser use.
reduction of yields of 7 %. A reduction of yield of 7 %

The table below summarises the highest, lowest and average rates of aid payable.

(BEF/ha)

Aid rate, water zones Aid rate, nature zones


Milk-producing grasslands SGM
(SGM × 37,5 % – 800) (SGM × 17,5 % – 800)

Antwerp Kempenland 55 700 20 088 8 948

Dunes 33 167 11 638 5 004

Average 44 160 15 760 9 928

Aid rate, water zones Aid rate, nature zones


Other grasslands SGM
(SGM × 37,5 % – 800) (SGM × 17,5 % – 800)

West Flanders
sand/loam region 36 100 12 738 5 518

Dunes 24 633 8 437 3 511

Average 31 941 11 177 4 789

The Belgian authorities emphasise that these are grown on the same parcel, and not sown on former
maximum compensation rates per hectare. The total grassland that has been ploughed up. This aid is based
area of grassland which is eligible for compensation is on estimates that the average dry material production
31 003 ha, of which 17 468 are in the water zones, for maize is 14 500 kg/ha and the average loss of yield
and 13 535 ha in the nature zones. The actual resulting from the stricter standards is 900 kg/ha.
compensation granted for grassland is BEF Based on an estimated cost price of BEF 4/kg dry
250 275 012 of which BEF 186 505 640 were material this results in a loss of income of BEF 3 600.
granted in water zones and BEF 63 769 372 in
nature zones. Based on the lower aid rates for
non-milk grassland, the maximum theoretical compen-
sation which might have been paid is BEF In addition farmers are encouraged to sow grass after
202 822 411 in the water zones and BEF maize, thereby reducing the drainage of nitrates from
65 900 155 in the nature zones. According to the the soil and nitrate leaching. A further aid of BEF
Belgian authorities, this difference between the 3 600/ha is payable. According to the Belgian auth-
maximum theoretical aid rates and the rates of aid orities this aid only covers the cost of grass seed.
actually paid is due to a number of factors, in
particular the fact that compensation is only paid in
respect of grassland which was already being used as
grassland by the same farm in 1994. 2.2.2.2. Compensation for additional manure disposal costs

Compensation for maize Aid is provided to holdings in the water and nature
zones to cover the additional costs of disposing of
For maize a flat rate aid for loss of production of BEF manure surpluses which result from the lower limits
3 600/ha applies provided that this maize is still on manure application.
C 108/18 EN Official Journal of the European Communities 17.4.1999

Aid is granted if a holding has additional manure with land an area where the stricter standards apply
surpluses which have accumulated as a result of the and must be established in a municipality with a
stricter standards governing manure application. For revised output of over 100 kg P2O5/ha. Compensation
the calculation of the aid, a distinction is made is paid per unit of mineral, i.e. per kg P2O5 and per kg
between: N less disposed of to these users. The maximum
quantity which may be eligible for compensation is
the difference between disposal possibilities between
(1) family livestock farms and other livestock holdings the normal standards governing manure application
which did not acquire additional arable land and those applying in areas subject to stricter rules.
between 1993 and 1996; the area of arable land The location of the holding determines the amount
according to the 1996 register is taken into payable, which is:
account for calculating the possibilities for
manure disposal;
— BEF 27/unit: one holding in a municipality with a
revised output of > 125 kg P2O5/ha,
(2) non-family livestock holdings which did acquire
additional land between 1993 and 1996; the area
to be taken into account for determining the possi-
bilities for manure disposal is based on the arable — BEF 20/unit for all other holdings.
land recorded in 1994 (situation on the holding in
1993).
Family livestock holdings with manure surpluses on
parcels in the Kluizen sub-hydrographic basin for
For the purpose of calculating the aid a weighted
surface water collection and on the nitrate-sensitive
average is used, based on the calculation of the
land on the banks of the Maas may take advantage
number of animals of each species (cattle, pigs,
of the obligation of the manure bank to take
poultry, others) in Flanders and the typical mineral
additional surpluses of manure arising as a result of
composition of the manure from each species in
the stricter standards governing manure application. In
terms of mineral content.
this case the compensation for the disposal and
storage of manure is reduced in proportion to the
quantity of minerals for which the manure bank has
On this basis it is estimated that each tonne of manure given assistance.
contains 6,6 kg of nitrogen and 4,2 kg of di-phos-
phorous pentoxide.

2.2.2.3. Compensation for increased storage costs


Aid is paid per unit of mineral (per kg of di-phos-
phorous pentoxide (P2O5) and per kg of nitrogen (N) Because the ban on manure spreading in the water
eligible for compensation. The location of the holding zones and the nature zones begins on 1 September,
determines the level of payment. The amount of aid instead of 21 September in other zones, a number of
payable is: holdings will encounter difficulties because they
harvest a number of crops after the start of the
extended ban. On many farms, manure is spread
— BEF 13/unit: for holdings in a “white” municipality after the harvest. This is no longer possible in the
with a revised output of < 75 kg P2O5/ha, water and nature zones. The Belgian authorities
estimate that as a consequence, these holdings will
require additional manure storage facilities for the
— BEF 20/unit: in a grey municipality with a revised three months.
output of 75 to 125 kg P2O5/ha,

— BEF 27/unit: for one holding in a municipality with


The difference in standards governing manure
a revised output of > 125 kg P2O5/ha.
application between ordinary areas and “water” and
“nature” zones is equivalent to about 50 kg P2O5/ha.
Since one tonne of manure contains an average of 5,2
The amounts of aid are higher for municipalities with kg P2O5; 50 kg P2O5/ha corresponds approximately to
higher revised outputs because the manure has to be 10 tonnes storage capacity per ha required.
transported over longer distances.

In addition, aid is also payable to compensate farmers Based on an estimate that the cost of building a
who are no longer able to take advantage of 500 m3 storage facility is BEF 1 263 120 the Belgian
contractual arrangements with neighbouring farms to authorities estimate that the provision of the necessary
spread excess manure on those farms. To qualify, the storage capacity involves an investment of about BEF
holding must have entered into an arrangement for 2 500 per tonne of storage capacity which will be
the disposal of excess manure in 1995 with a user amortised over 20 years, and is therefore equivalent
17.4.1999 EN Official Journal of the European Communities C 108/19

to BEF 125/t/year. Annual compensation of BEF No aid may be granted under the manure decree for
1 250/ha is therefore payable to farmers producing land covered by set-aside.
livestock manure with arable land in areas where
stricter rules on manure application and spreading
apply.
2.4. RE–ASSESSMENT OF THE MANURE POLICY

The Commission has noted the statement of the


Farmers who in 1996 received this compensation for Belgian authorities that a comprehensive review of
manure storage under the manure decree cannot the system of the arrangements for aid payments
obtain interest-rate subsidies or capital premiums in under the manure decree will take place in 1998,
the same year for building storage facilities for and notes that the new arrangements have been the
livestock manure under the Flemish Agricultural subject of a separate notification to the Commission
Investment Fund (VLF). which is being examined under the aid number
N 380/98.

2.2.2.4. Compensation for use of chemical fertilisers

Since farmers with land situated in the water zones 3. ASSESSMENT


cannot fully make up the permitted quantity of
nitrogen per hectare using animal manure, the The measures described in points 2.2.2.1 to 2.2.2.4
Belgian authorities anticipate that farmers in these above constitute State aid within the meaning of
areas will endeavour to maintain production levels Article 92(1) of the Treaty. Aid is payable through
by applying additional chemical fertiliser especially State resources to certain categories of framers, those
for “other crops” and for maize. located in the water zones or nature zones. Those aids
distort or threaten to distort competition and affect
trade between Member States because they improve
the competitive position of farmers receiving the aid
when compared with farmers in other parts of
It is assumed that these holdings will use an additional
Belgium or in other Member States who are not in
60 kg of N/ha at a cost of BEF 16/kg. The aid payable
receipt of aid. Furthermore, in so far as the products
therefore amounts to BEF 960 (60 × 16), which is
produced by those farmers are the subject of intra-
rounded up to a flat rate BEF 1 000/ha.
Community trade, the measures appear likely to
affect trade between Member States.

2.3. PROCEDURE FOR THE PAYMENT OF AID

Farmers with arable land in 1994 located in the water Nevertheless the prohibition on the granting of aid
and nature zones may apply to the manure bank, contained in Article 92(1) of the Treaty is not uncon-
which is responsible for the administration of the ditional. In their written observations the Belgian auth-
scheme, for compensation for land in those areas. orities have emphasised the environmental objectives
They are required to indicate on maps and plans of the aid scheme and in this context they have cited
their arable land parcel by parcel showing the crop the provisions of Council Regulation (EEC) No
plan for 1994 and that for the year of application. If 2078/92 of 30 June 1992 on agricultural production
arable land is located in several areas or zones, the methods compatible with the requirements of the
compensation is calculated on the basis of the protection of the environment and the maintenance
strictest standards on manure application and of the countryside (2) and the Community guidelines
spreading. The manure bank examines applications on State aid for environmental protection (3). Point 2.1
and informs those concerned as to what compensation of the environment aid guidelines states that in the
will be paid, using all the information available to it. agricultural sector the guidelines do not apply to the
Compensation is not paid if it amounts to less than field covered by Regulation (EEC) No 2078/92. It is
BEF 1 000. Applicants have a right of appeal to the therefore appropriate to begin by considering the
Flemish Minister of the Environment, who is required application of Regulation (EEC) No 2078/92 to the
to issue a decision within six months, otherwise the measures concerned.
appeal is considered upheld.

The manure bank, police officers and officials of the 3.1. APPLICABILITY OF REGULATION (EEC) No 2078/92
environment inspection department of the In the Annex to their letter of 7 August 1998, the
environment, nature, land and water management Belgian authorities explain that the provision of
authority and other officials are entitled to undertake
checks that farmers are meeting their obligations
under the manure decree. If infringements are found, (2) OJ L 215, 30.7.1992, p. 85.
farmers may be required to repay the aid. (3) OJ C 72, 10.3.1994, p. 3.
C 108/20 EN Official Journal of the European Communities 17.4.1999

compensation for farmers in the nature zones and the the Commission under Articles 92 to 94 of the Treaty,
water zones for compliance with the more stringent such aid must be considered illegal.
local standards set out in the fertiliser decree should be
seen as an implementation of the provisions of Regu-
lation (EEC) No 2078/92 from 1 January 1996. In this Furthermore, at this stage in the procedure, the
context, the Belgian authorities refer to Article 4(5) of Commission has doubts as to whether the aid
Regulation (EEC) No 2078/92 which provides “subject measures do in fact fall within the field covered by
to conditions to be determined by the Commission in Regulation (EEC) No 2078/92.
accordance with the procedure laid down in Article 29
of Regulation (EEC) No 4253/88 (4), the Community
may also contribute to the premiums referred to in the
preceding paragraphs which are granted by Member The Regulation establishes a Community aid scheme
States in order to compensate for income losses which is intended to promote, inter alia, the use of
resulting from the mandatory application of the farming practices which reduce the polluting effects
restrictions referred to in Article 2 in the context of of agriculture.
measures implemented in the Member States pursuant
to Community provisions”.
Where a Member State unilaterally pays aid which
might be co-financed under Regulation (EEC) No
2078/92, the compatibility of the aid with the Regu-
In this context, the Belgian authorities explain that on lation should be assessed in accordance with Article
24 January 1997 the Commission received a proposal 10(1) which provides that the Regulation shall not
for the extension of the programme within the preclude Member States from implementing, except
framework of Regulation (EEC) No 2078/92. The in the field of application of Article 5(2), additional
proposed amendment relates to the horizontal aid measures for which the conditions of granting of
programme which is part of the fertiliser legislation aid differ from those laid down therein or the amounts
in the sub-programme of the Flemish region of of which exceed the limits stipulated therein, provided
Belgium as referred to on page 4 to page 6 of that the said measures comply with the objectives of
working document STAR No VI/4841/94, approved this Regulation and with Articles 92, 93 and 94 of the
by the Commission on 17 November 1994. The Treaty.
proposed amendment of the horizontal programme
which is part of the fertiliser legislation relates to an
extension of the obligations within fertiliser legislation.
The expansion relates to obligatory stricter fertiliser Article 10(1) therefore lays down four conditions for
stipulations in certain areas. The Belgian authorities the granting of aid:
explain that compensation is provided for the
economic damage suffered. The calculation of that
compensation is based on compensation for falls in (1) aid must not be given in the field of
production, additional purchases of artificial fertiliser, application of Article 5(2) of the Regulation.
manure disposal and manure storage costs. The Article 5(2) provides that no aid may be given
compensation is differentiated by agricultural area, under the Regulation in respect of areas subject
municipality and farm type. to the Community set-aside scheme which are
being used for the production of non-food crops.
As noted at point 2.3 above, this condition is
fulfilled;
At this stage of the procedure the Commission cannot
accept the arguments advanced by the Belgian auth-
orities. In the first instance, the services of the
Commission, in the letter of 17 February 1997 (2) aid should be granted for additional measures
referred to in Section 1 above, had clearly expressed for which the conditions of granting of aid
doubts about the eligibility of the measures concerned differ from those laid down in the Regulation
for inclusion in the Flemish programme under Regu- or the amounts of which exceed the limits
lation (EEC) No 2078/92, and had requested additional stipulated therein. The conditions for the
information in this respect. Secondly, it is clear that granting of aid laid down by the manure decree
the mere fact that a Member State has submitted an differ fundamentally from those laid down in the
application to amend a Community co-financed Regulation. Article 2 of the Regulation provides
programme does not render the unilateral payment that the Community financed schemes may
of aid by the Member State compatible with the include aids to farmers who undertake, inter alia,
Treaty. to reduce their use of fertilisers.

However, payments made under the manure


Since it is accepted by the Belgian authorities that aid decree are not made in response to undertakings
under the manure decree for 1996 has been paid at entered into by farmers on a voluntary basis in
the end of 1997, without any advance notification to return for aid. The manure decree imposes a
legal obligation on farmers in certain zones to
(4) The so-called “STAR Committee procedure”. reduce fertiliser use and provides for payment of
17.4.1999 EN Official Journal of the European Communities C 108/21

compensation in return. Furthermore, it appears fertiliser use in the water zones and nature zones
from the description above that, in the case of of Flanders. Compensation is provided for lower
grassland, the maximum amount of aid payable yields on grassland and of maize, and for the
of BEF 20 088 per hectare (± EUR 502) is costs of disposal of excess manure.
substantially above the maximum eligible amount
of the premium fixed by Article 4(2) of Regulation
2078/92. Furthermore, the Commission notes that
this premium is cumulable with the payments for
manure storage and disposal, which would appear In practice, therefore, it seems that the objective of
to increase further the value of the premium paid the aids is not to compensate farmers for under-
per hectare. This condition is therefore met; takings to adopt more environmentally-friendly
farming practices. Certain measures compensate
farmers for production losses resulting from the
restrictions imposed by the manure decree.
However, other measures seem to be designed to
(3) the aid measures should comply with the permit farmers to maintain, as far as possible,
objectives of the Regulation. At the present existing farming practices, by meeting the costs
stage of the procedure, the Commission has of the restrictions on the use of fertilisers
serious doubts that this condition is fulfilled. resulting from the manure decree. In this
context, at this stage of the procedure, the
Commission has particular doubts about the
compatibility with the objectives of the Regulation
of payments for manure storage and disposal costs.
The objective of the measures adopted in the
Flemish region is to reduce nitrate pollution by
reducing fertiliser use. It is true that recital 5 to
Regulation (EEC) No 2078/92 and Article 2(1)(a)
expressly refer to the objective of obtaining The payment of such costs, without any measures
substantial reductions in fertiliser use. In that being undertaken to reduce the problem of
sense, the Flemish measures do pursue the same manure production at source, for example,
objectives as those set out in the Regulation. through the extensification of animal production,
would appear to have little direct benefit for the
environment or the countryside.

Nevertheless, the Commission considers that in


determining whether a measure complies with In their written observations, the Belgian auth-
the objectives laid down by Regulation (EEC) No orities have referred to Article 4(5) of Regulation
2078/92, it should take account not only of the (EEC) No 2078/92, according to which the
basic policy objectives being pursued by the Community may also contribute to the
national measures, but also of the means by premiums which are granted by Member States
which those objectives are pursued. in order to compensate for income losses
resulting from the mandatory application of the
restrictions referred to in Article 2 in the context
of measures implemented in the Member States
pursuant to Community provisions. However,
Article 2(1) of the Regulation provides that subject
this possibility is expressly stated to be subject to
to positive effects on the environment and the
implementing provisions to be laid down by the
countryside, the schemes established under the
Commission. It therefore appears that payment of
Regulation may provide aid for farmers who
aid to meet mandatory restrictions laid down by
enter into certain types of undertakings.
Member States is an exceptional case, which
Furthermore, under Article 4(1) of the Regulation,
requires a specific decision from the Commission.
annual premiums per hectare or per livestock unit
It is in fact because of doubts about the compati-
are limited to farmers who enter into undertakings
bility of the measures adopted by the Belgian auth-
for at least five years (5).
orities with the objectives of Regulation (EEC) No
2078/92 that no such decision has so far been
taken in respect of the measures concerned.

As noted above, however, the majority of the


measures covered by the present Decision are
not given in return for undertakings entered into By way of exception to the considerations set out
by farmers but are intended to compensate farmers above, it was noted in the final paragraph of point
for meeting the legal requirements applicable to 2.2.2.1 of the description that the aid measures
include an aid of BEF 3 600/ha to encourage
(5) Except in the case of set-aside, where a longer period of 20 years farmers to sow grass after maize, thereby
applies. reducing the drainage of nitrates from the soil
C 108/22 EN Official Journal of the European Communities 17.4.1999

and nitrate leaching. According to the Belgian In this context it is necessary to note that the aid
authorities this aid only covers the cost of grass measures for the compensation of reduced yield on
seed. At this stage of the procedure, the grassland or of maize, the aids for the disposal of
Commission considers that this aid may fall manure surpluses and the compensation for additional
within the scope of Article 10(1) of Regulation costs of artificial fertiliser use would appear to
(EEC) No 2078/92, in so far as it is based upon constitute operating aids. In reply to a question from
voluntary action by farmers which has potential the services of the Commission, the Belgian authorities
benefits for the environment. Furthermore, the have explained that the costs of compensation for
Commission notes that at its meeting of 30 manure storage costs, while comparable to the costs
September 1998, the STAR Committee adopted a of investing in additional manure storage, are in fact
favourable opinion on an amendment to the agri- not directly linked to actual investments, and cannot
environmental programme for the Flemish region therefore be considered as investment aids. In the light
from 1998 onwards which includes a similar of these explanations, the Commission considers that
measure for green cover in winter on maize and this measure should also be considered as an operating
potatoes. However, in view of the limited amount aid.
of this aid, and its close relationship with the other
aid measures, the Commission considers that it
would not be appropriate to take a separate
decision on the application of this specific In general, the Commission considers that the
measure during 1996 and 1997 at this time; payment of operating aids to the agricultural sector
is unlikely to provide a lasting contribution to the
development of the sector, and may entail a distortion
of conditions of competition which disadvantages
farmers who are not in receipt of such aids. The
(4) the measures should be compatible with Commission therefore takes a strict approach to the
Articles 92 to 94 of the Treaty assessment of such aids.

In view of the concerns expressed above about the The payment of operating aid for environmental
compatibility of the measures with the objectives protection measures is dealt with in point 3.4 of the
of Regulation (EEC) No 2078/92, and in view of guidelines. This provides:
concerns about the effect of the measure on
competition, described below, the Commission
doubts that the measure could be considered
compatible with Articles 92 to 94 of the Treaty. “In accordance with long-standing policy, the
In particular, the Commission notes that the Commission does not normally approve operating
various aid measures do not appear to constitute aid which relieves firms of costs resulting from the
an incentive to farmers to take additional steps to pollution or nuisance they cause. However, the
improve the environment, but simply constitute Commission may make an exception to this
payments for meeting their legal obligations. In principle in certain well-defined circumstances. It has
the absence of any counterpart from the bene- done so, so far, in the field of waste management and
ficiaries for the receipt of the aid, and in so far relief from environmental taxes. The Commission will
as the aid measures do not appear to contain any continue to assess such case on their merits and in the
incentives for the beneficiaries to take additional light of the strict criteria it has developed in the two
steps towards the improvement of environmental fields just mentioned. These are that the aid must only
protection, the Commission doubts whether these compensate for extra production costs by comparison
aid measures can be considered to contribute with traditional costs, and should be temporary and in
towards the development of certain economic principle degressive, so as to provide an incentive for
activities within the meaning of Article 92(3)(c) reducing pollution or introducing more efficient use of
of the Treaty. resources more quickly. Furthermore, the aid must not
conflict with other provisions of the EC Treaty, and in
particular those relating to the free movement of
goods and services.

3.2. APPLICATION OF THE COMMUNITY GUIDELINES ON


STATE AID FOR ENVIRONMENTAL PROTECTION
In the field of waste management, the public financing
In view of the doubts expressed in the preceding of the additional costs of selective collection, recovery
section about the compatibility of the aids with the and treatment of municipal waste for the benefit of
objectives of Regulation (EEC) No 2078/92, it is also businesses as well as consumers may involve State aid
necessary to consider whether they may be considered but can in that case be authorised provided that busi-
compatible with the guidelines laid down by the nesses are charged in proportion to their use of the
Commission in respect of State aid for environmental system or the amount of waste they produce in their
protection. enterprise. Aid for the collection, recovery and
17.4.1999 EN Official Journal of the European Communities C 108/23

treatment of industrial and agricultural waste will be Commission's guidelines on State aids for environ-
considered on a case-by-case basis. mental protection.

Temporary relief from new environmental taxes may As regards the aids to compensate farmers for
be authorised where it is necessary to off-set losses in production losses resulting from the restrictions on
competitiveness, particularly at international level. A the use of animal manure, including the aid to
further factor to be taken into account is what the compensate the additional costs of artificial fertilisers,
firms have to do in return, to reduce their pollution. the Commission notes that aids for production losses
This provision also applies to reliefs from taxes are not specifically referred to in the guidelines. Never-
introduced pursuant to EC legislation in which theless, to the extent that restrictions on the use of
Member States have discretion as to the relief or its manure result in reduced yields, they are likely to
amount.” increase the production costs of farmers for the
remaining crops. According to the principles set out
in the guidelines referred to above, it would appear
that such aids may only be justified if three conditions
are met:
As regards aids for the storage and disposal of excess
manure, the Commission considers that excess manure
may be considered as a form of agricultural waste. In
accordance with the guidelines quoted above, aid for
the disposal of such waste is to be considered on a
case-by-case basis. The Commission notes that the — the aid should be temporary, and in principle, it
present measure is temporary, in that it applies only should be degressive,
for the two years 1996 and 1997. Furthermore, the
Commission notes that in their new notification,
which is being examined under the aid number
N 380/98, concerning payments under the manure
decree for 1998, the Belgian authorities have not — the aid must only compensate for extra production
notified the continuation of direct aid payments for costs compared to traditional methods,
manure storage or disposal, although the arrangements
for manure collection from certain farmers by the
manure bank remain unchanged. Subject to confir-
mation by the Belgian authorities that the other aids
for manure storage and disposal have been discon-
— the aid should be necessary to off set losses in
tinued definitively, the Commission could consider
competitiveness, particularly at international level
these aids to be temporary in nature.

However, the Commission must also take account of At the present stage of the procedure, the Commission
the fact that the aid measures are not degressive, since doubts that these conditions are met.
the same level of aid is provided for each of the two
years in question. Furthermore, on the basis of the
information provided by the Belgian authorities, it
appears that the measure is intended to compensate
for the full costs of the storage and disposal of excess The aid should be temporary and degressive
manure resulting from the restrictions imposed in the
sensitive zones. Thus there would appear to be no Since the aid only applies for a two-year period, it
charges whatsoever imposed on farmers for waste would appear to be temporary. However, within that
disposal. Moreover, there appears to be no period, there is no degressivity of the aid.
requirement on farmers in the sensitive zones to Furthermore, there is always the possibility that the
take any steps to reduce their manure output. Thus aid will be extended. In their written observations,
there is no counterpart on the part of the farmers for the Belgian authorities explain that they have opted
receipt of the aid, which simply compensates them for for the gradual imposition of stricter fertiliser
meeting the stricter standards on the use of manure standards until the stricter standards come into force
laid down in the sensitive zones. in 2003. In areas with more stringent local standards,
however, the stricter requirements have already been
in place since 1 January 1996, both for animal manure
and chemical fertilisers. As the stricter standards are
put in place for the other regions, the amount of aid
For these reasons, the Commission doubts that these will be progressively reduced until it is phased out in
aid measures can be considered compatible with the 2003.
C 108/24 EN Official Journal of the European Communities 17.4.1999

However, the Commission notes that the levels the compensation for the difference in standard based
envisaged for 2003 outside of the sensitive areas are upon the total amount of nitrogen that can be legally
expressly stated to be indicative limits which have not applied, including both nitrogen from artificial
yet been given legal force. Moreover, the total limit for fertilisers and nitrogen from animal manure. This
grassland remains at 450 kg N/ha, even after 2003, approach was used because it was considered
which raises the possibility that aid payments might necessary to ensure the equality of treatment of
continue even after that date. Furthermore, while the farmers in a single region so that farmers whose
Commission in no way wishes with the present land is situated in areas covered by more stringent
decision to prejudice its assessment of the aids to be local standards did not suffer in comparison with
paid under the manure decree for 1998, which have farmers whose land was not affected by such
been notified to the Commission and are currently standards. If the standards are the same for all
under examination under the aid number N 380/98, farmers in all areas, this competitive advantage is
the Commission is bound to point out that the level of removed and no compensation will need to be paid.
aid for loss of production on grassland mentioned in In this situation, if farmers make an effort to exceed
the notification remains identical to that applied in the basic environmental quality standard, it is possible
1996 and 1997. In these circumstances, the to calculate a compensation payment on the basis of
Commission doubts whether the aids for grassland the difference between what is achieved and the
can be considered degressive. Furthermore, while the quality standard.
Commission has not so far established a policy on the
length of time over which the payment of operating
aids to mitigate environmental costs can be considered
as temporary, the Commission considers that the seven
year period apparently envisaged by the Belgian auth-
orities (1996 to 2002) appears rather long.
Based on this principle of equality within the same
region, the Belgian authorities consider that the
current rules do not constitute over-compensation
for farmers and/or compensation for ceasing agri-
cultural practices which are contrary to Community
On the other hand, the Commission notes that the regulations. The competitive disadvantage or
proposed aid scheme under the manure decree for advantage within a single agricultural region will be
1998 does not include compensation for loss of more pronounced within that region than within the
production of maize, nor does it include compensation European Community as a whole. That is why, within
for additional use of artificial fertilisers in the water Flanders, the entire loss suffered by farmers whose
zones. Subject to confirmation from the Belgian auth- land is situated in the areas with more stringent
orities that these measures have now been definitively local standards is compensated. The compensation
abandoned, the Commission could consider that they will never exceed the actual loss af yield suffered.
were of a temporary nature.

There should be no over-compensation


Furthermore, the Belgian authorities point out that in
As noted at point 2.2.2.1 above, compensation for loss 1996 and 1997 the Flemish region already imposed
of production on grassland is calculated by reference stricter local standards, while the nitrate Directive
to the total fertiliser use permitted in the non-sensitive does not require this until 20 December 1998. In
zones, namely 450 kg N/ha for grassland and 325 kg the sensitive water zones, a restriction of 200 kg
N/ha maize. According to the Belgian authorities, N/ha has been imposed for grassland, while for
these figures have been calculated on a scientific maize and other crops it is 170 N/ha. Thus the
basis in order to ensure that the nitrate concentration permitted quantity of animal manure has, since
of ground water and surface water does not exceed 50 1996, already been lower than was stipulated under
mg NO3-N/l, or 11,3 mg NO3-N/l, taking into account the first action programme under Directive
an average permissible loss of 70 kg NO3-N/l per 91/676/EEC, and for certain crops it has been limited
hectare per year,. Their objective is to combine to the level stated under the second action
optimum production with minimum leaching. The programme.
limits for the nature zones and the water zones have
been calculated in the same way, taking account of the
fact that their nitrate status is more sensitive than the
other zones.

Notwithstanding the explanations set out above, at this


stage of the procedure, the Commission has certain
doubts about whether the measures described by the
In their letter of 7 August 1998, the Belgian auth- Belgian authorities do exclude the possibility of over-
orities explain that is has been decided to calculate compensation.
17.4.1999 EN Official Journal of the European Communities C 108/25

In the first instance, the Commission notes that the The aid should be necessary to off-set losses in
maximum levels fixed for fertiliser use outside of the competitiveness, particularly at international level
sensitive zones, used as the starting point for the
calculation of compensation, permit farmers to In order to reduce distortions of competition to a
spread up to a total of 450 kg/N per hectare from minimum, the Commission generally requires that
animal manure if no artificial fertilisers are used. temporary relief which is granted from the cost of
Without wishing at this stage to take a position on environmental measures should be justified in order
the scientific arguments advanced by the Belgian auth- to off-set a potential loss of competitiveness, in
orities, the Commission requests those authorities to particular at the international level. At present, the
provide all relevant additional information necessary Commission doubts whether this condition is met. In
to the compatibility of this limit with good agricultural practice, farmers throughout the Community are
practice, and with the Community legal provisions in having to readjust their practices to take account of
force. the progressively stricter limitations on the use of
fertilisers which result from the implementation of
Directive 91/676/EEC, generally without recourse to
State aid. Furthermore, it appears the effects of these
changes on the international competitiveness of
Secondly, the Commission has some doubts that the Community farmers are, at least in part, mitigated
provisions currently in force in the water zones and by the effects of the CAP.
the nature zones do in fact go substantially beyond the
obligations set out in Directive 91/676/EEC. In this
context, it is sufficient to note that the Belgian auth-
orities themselves have indicated in their written
observations to the Commission that they had
identified the water zones and the nature zones to
be particularly sensitive to nitrate pollution, and that
they therefore considered lower limits necessary in
order to ensure that the target of 50 mg/l nitrates in
In their written observations, the Belgian authorities
surface freshwaters, in particular those used for the
have emphasised the need to avoid distortions of the
abstraction of drinking water, and in groundwaters
conditions of competition within the same region.
was attained.
However, at this stage of the procedure, the
Commission doubts whether this argument can be
accepted. The Commission considers that farmers
established within the nitrate sensitive regions of
Third, as regards the method of calculation of the Flanders will compete with farmers in other Member
compensation, the Commission requests the Belgian States, including farmers established within the nitrate
authorities to provide validated studies to demonstrate sensitive regions of other Member States, who may be
the accuracy of the assumptions used in calculating the subject to similar obligations, but not receiving aid. In
compensation. In particular, the Belgian authorities are such circumstances, the unilateral payment of aid by
requested to provide the results of studies demon- the Belgian authorities would not appear justified in
strating that a reduction in total fertiliser use from order to protect the competitive position of Flemish
450 kg N/ha to 350 kg N/ha does in fact result in a producers, and creates a real threat of a distortion of
reduction in yield of 15 %, and that a reduction from the conditions of competition within the internal
450 kg N/ha to 400 kg N/ha results in a reduction in market. For the reasons given above, at the present
yield of 7 %. Furthermore, the Belgian authorities are stage of the procedure, the Commission seriously
also requested to provide additional information on doubts whether that threat can be justified by the
the assumptions used to calculate the effects of this common interest. Furthermore, the Commission
loss of production on the overall profitability of the doubts that a Member State can rely on concerns
holding, using a range of hypotheses, including purely about potential distortions of competition which
arable production and mixed arable/livestock have been created at the local level by its own
production. In particular, the Commission would ask internal legislation in order to justify the payment of
the Belgian authorities to provide a detailed expla- State aid which appears contrary to the Treaty.
nation as to why a 15 % loss of grass production in
a mixed arable/livestock holding is considered to
constitute a 40 % loss of profitability of the holding,
taking into account the different types of livestock
production.

In this context, the Commission would invite the


Furthermore, the Belgian authorities are requested to Belgian authorities to explain why they did not
provide calculations based on alternative methods of consider it appropriate to envisage a different
providing compensation, for example the cost of approach to the introduction of limits on fertiliser
buying replacement feed as a substitute for the lost use in Flanders which could have avoided the threat
production. of a distortion of competition at local level.
C 108/26 EN Official Journal of the European Communities 17.4.1999

In the light of the foregoing considerations, the Official Journal of the European Communities. It will
Commission, acting under the procedure laid down also inform interested parties in the EFTA countries
in Article 93(2) of the EC Treaty, requests Belgium which are signatories to the EEA Agreement, by publi-
to submit its comments and to furnish all such cation of a notice in the EEA supplement to the
information as may help to evaluate the aid/measure, Official Journal of the European Communities and will
within one month following the date of receipt of this inform the EFTA Surveillance Authority by sending a
letter. It requests your authorities to forward a copy of copy of this letter. All such interested parties will be
this letter to the recipients of the aid immediately. invited to submit their comments within one month
following the date of such publication.’

The Commission wishes to remind Belgium that


Article 93(3) of the EC Treaty has suspensory effect, The Commission hereby gives notice to interested
and would draw your attention to the letter sent to all parties to submit their comments on the aid/measure
Member States on 22 February 1995, stating that all in question within one month following the date of
aids granted unlawfully could be recovered from the publication of this notice, to
recipient and/or that expenditure on national measures
directly affecting Community measures might not be
eligible for cover by the EAGGF budget, depending on
the relevant provisions of national law; the amounts European Commission
thus recovered will include interest calculated on the Directorate-General for Agriculture
basis of the reference rates used to calculate the grant- Directorate Agro-economic legislation
equivalent for the purposes of regional aids, running Rue de la Loi/Wetstraat 200
from the date on which the aid was payable to the B-1049 Brussels
recipient(s) until the date of actual recovery. Fax (32-2) 296 21 51

The Commission warns Belgium that it will inform


interested parties by publishing this letter in the These comments will be communicated to Belgium.

STATE AID
Invitation to submit comments pursuant to Article 93(2) of the EC Treaty, concerning the
aid/measure C 85/98 (ex NN 106/98) — Germany — incorrect application of the de minimis
rules under the Thuringia consolidation programme of 20 July 1993

(1999/C 108/06)
(Text with EEA relevance)

By the letter reproduced below, dated 26 January 1999, the 2. The programme was discussed at two meetings, i.e. on 23
Commission notified the German Government that it had September 1997 and 15 October 1998. The German auth-
decided to initiate the procedure pursuant to Article 93(2) of orities forwarded the Land's guidelines for the scheme by
the EC Treaty. fax of 9 September 1997, and other information by letters
of 8 July and 9 October 1998. Statistics on the application
of the scheme, requested for the first time on 12
September 1997, were received on 7 December 1998.
‘I. THE PROCEEDINGS
1. The Thuringia consolidation programme entered into force
on 20 July 1993. As the Land authorities considered that
the programme complied with the de minimis rule
II. THE SCHEME
introduced by the SME guidelines for 1992, it was not
notified pursuant to Article 93(3) of the EC Treaty. 3. The aid is granted by the Land (“Thüringer Aufbaubank”,
the Land's development and reconstruction bank) on the
basis of the guideline of the Land of Thuringia for the
consolidation programme (“Richtlinie zum Thüringer
The programme was replaced on 16 January 1996 by the Konsolidierungsprogramm”). The guideline refers
Thuringia SME loan's programme of 16 January 1996. specifically to the de minimis nature of the scheme, which