Policy Areas

Norway wants EU flexibility on regional state aid

Differentiated employers’ social security contributions and guidelines for national regional state aid were issues on the agenda when Norwegian Minister Erna Solberg met with the Commissioners Neelie Kroes and Danuta Hübner on 23 February.

01/03/2005 :: Upcoming Commission changes on regional aid pose challenges and opportunities to Norway’s depopulated regions.

At a Brussels press conference after the meeting the Local Government and Regional Development Minister Erna Solberg was emphasised the need that the Commission would show flexibility towards Norway on these issues where Norway is bound by EEA regional aid rules.

Solberg supports EU’s ambitions to reduce state aid, but is concerned about definitions of areas eligible for regional aid that will be defined in the Commission’s upcoming revision of the Guidelines on National Regional State Aid.

The Commission no longer refers to the term “arctic areas” as an area eligible for support.  Instead it is proposing that only areas with a population density of under 12,5 persons per square kilometre should be allowed to receive investment aid, while areas with a population density under 8 persons per square kilometre may be granted operating aid in order to counter the depopulation.

Previously the Norwegian government has been granted flexible rules that have allowed it to use “swapping”, giving Norway the option to provide regional aid to especially depopulated and disadvantaged areas in exchange for refraining to support more prosperous areas – a practice that Minister Solberg insists should be continued.

“We will not be granted the same rules that we have had on these issues before, but there are signs that we will be granted flexibility in larger areas,” Solberg said.

This allows for granting operating aid in a larger area than today, e.g. by extending the Norwegian system of differentiated employers’ social contributions to a larger area than what is accepted under the present rule. Solberg foresaw that the rules would imply that the whole of Northern Norway could be included, but also hoped for flexibility with regard to Nord-Trøndelag areas.

“The Norwegian government has worked hard to secure the right to provide operating aid to depopulated areas and we have a strong wish for flexibility, especially in the field of investment aid. If we don’t achieve this flexibility many of our regions will become ineligible. It would be regretful if vast mountain areas were to be denied regional aid,” Solberg said.

Commission proposals to restrict regional aid based on administrative borders could result in unequal privileges for some of Norway’s depopulated areas with a low-population density. Depending on their location, some areas with a low population density would be eligible for aid, while other areas in the same situation would be excluded.

Depopulated mountain areas in regions such as Møre og Romsdal, Nord- and Sør-Trøndelag, Hordaland and Buskerud will be vulnerable to these potential changes, while more heavily populated regions and areas will remain eligible for support.

“We have expressed our concerns to the Commission at an early stage, because it is important for us that the Commission understands our apprehension on these issues,” Solberg added.

After reviewing comments from all countries affected by these rules, the Commission will present a revised guideline suggestions in June. The new guidelines are set to be implemented from 1 January 2007.

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Minister Erna Solberg at the press conference in Brussels on February 23Photo: EU-del/ Anne Grethe Nilsen