EU eases aid rules for boosting jobs, economic growth

(BRUSSELS) - The European Commission adopted plans on Monday to ease rules for granting public aid to projects that create jobs, boost economic activity, protect the environment or help women entrepreneurs.

"These new rules set out a clear framework to allow member states to grant aid targeted at creating jobs, boosting competitiveness and improving the environment without the commission having to get involved," Competition Commissioner Neelie Kroes said.

Under the new scheme, such projects would not need to be reported to the commission, which otherwise has to review planned state aid to ensure it does not distort markets.

The new rules focus particularly on making it easier for small and mid-sized companies to receive state funds by allowing up to 7.5 million euros (11.7 million dollars) in investment aid for a given project without having to notify the commission.

The plans also aim to help female entrepreneurs by allowing them up to one million euros per company.

The UEAPME European association for small and mid-sized enterprises (SMEs) welcomed the plans and urged member states to use the new rules to grant more aid.

"In 2007, only 12 percent of the total state aid granted in the EU27 went to the benefit of crafts and SMEs, while larger companies and unproductive national champions swallowed the vast majority," said Gerhard Huemer, head of economic policy at the association.

"We expect member states to work to change this figure in the next years and make full use of the opportunities offered by the European Commission today -- otherwise, their lip service and double standards will be uncovered once again," he added.