EU state aid spending stable, better targeted-report
Source: Reuters
BRUSSELS, Dec 11 (Reuters) - European Union spending on state aid remained stable last year despite repeated commitments for cutbacks, but better targeting helped minimise distortions of competition, an EU report showed on Monday. The EU's executive Commission said the 25 member states spent 64 billion euros ($84 billion) in 2005 on helping troubled companies and supporting industries and initiatives, slightly less than the 65 billion euros spent in 2004. The Commission has the final say on whether to allow state aid. It clears such payments only under strict criteria because generally, state financial help distorts competition by supporting one or several companies against others. But the Commission encourages spending in undeveloped but useful areas, for uses such as helping firms to innovate or environmental initiatives. "There is some room for welcoming the fact that more aid is being diverted to programmes such as the protection of environment and boosting of research and development, rather than to companies," Commission spokesman Jonathan Todd said. The biggest spenders were the EU's old member states. Germany topped the list by granting 20 billion euros in aid, followed by France with 10 billion, Italy with 6 billion, Britain's 5 billion and Spain's 4 billion. More than half of member states gave over 90 percent of their aid to initiatives such as the environment and innovation.
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