The latest scoreboard compiled by the European Commission on state aid shows that in 2004, Cyprus had the second highest ratio of state aid to GDP in the European Union, having spent 1.48% of GDP, or EUR 0.2 bln, compared with the highest score of 1.66% in Finland. The scoreboard excludes expenditure on railways.
The largest proportion of Cyprus’ aid went not on potato farmers but on manufacturing. The scoreboard shows that manufacturing absorbed 35%, agriculture 29% and services 24% of the EUR 184 mln spent.
The total amount of state aid granted by the twenty-five Member States was estimated at some EUR 62 bln in 2004 (0.60% of EU GDP). This is the first edition of the Scoreboard to include comparable figures for all twenty-five Member States. While some Member States have reduced the overall level of aid, for the Union as a whole the Lisbon objective of less aid has not yet been met.
On the other hand, the Commission notes that most Member States appear to be targeting their aid measures towards ‘horizontal objectives’, in particular the environment.
By sector, around EUR 40 billion of aid was earmarked for manufacturing and services, EUR 15 billion for agriculture and fisheries, EUR 5.5 billion for coal and a little over EUR 1 billion for transport (excluding railways).
“While I recognise the efforts of some Member States in tackling the Lisbon goals of less and better targeted aid, I am disappointed that the overall level of aid in the EU has not fallen. One of the best ways to reduce state aid is clearly to make better use of alternative instruments such as general and regulatory measures which are less or not at all distortive to competition” Competition Commissioner Neelie Kroes commented.
According to the Scoreboard, the overall level of state aid granted by the twenty-five Member States was estimated at EUR 62 billion in 2004. In absolute terms, Germany granted the most aid (EUR 17 bn) followed by France (EUR 9 bn) and Italy (EUR 7 bn).
Member States have continued to redirect aid towards horizontal objectives. By 2004, the share of horizontal aid had risen to 76% of the total amount of aid, with Member States favouring in particular the environment, regional economic development, research and development and small and medium-sized enterprises. The remaining 24% was aid directed at specific sectors (mainly coal) including aid to rescue and restructure ailing firms.
