Vol. 497 No. 7
48 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment if State aids for industry will be disallowed by the European Commission; if so, the impact on this decision in the context of regionalisation of the country; and if she will make a statement on the matter. [24461/98]
Government support for enterprise must conform to the limits set by the EU regional aid guidelines, the latest version of which will come into effect, generally, in January 2000.
Currently the development agencies can offer assistance to enterprises of up to 57 per cent of investment costs in the non-designated areas, up to 71 per cent in the designated areas and up to 75 per cent in Gaeltacht areas. In practice, the assistance offered is well below these limits.
Under the latest EU regulations, Ireland will be treated as comprising eight Article 92(3)(c) regions — our regional authority areas — and each will have a ceiling on the aid which can be offered to enterprise. The limit for each area will depend on its GDP-unemployment rate, but may not exceed 20 per cent of investment costs, with a top-up of up to 10 per cent for SMEs. Not only is the Commission limiting aid payable across the European Union to curb harmful competitive bidding between member states, but the new rules reflect Ireland's much improved economic status, that is, we are no longer one of the poorest areas of the EU.
Deputies will appreciate that, regardless of the eventual decision on our application for a new Objective One region in the three poorest of our eight sub-regions, plus Clare and Kerry, which would qualify for that status on the basis of objective economic criteria, the new rules on regional aid do mean that there will be an element of regional differentiation for aid purposes.
