I have recently completed negotiations with the European Commission on the maximum levels of grant aid which will be permitted at a regional level, with effect from 2000. A key concern of the Commission in producing the new guidelines was to reduce the amount of overall State aid given out by Government in the EU, leading to harmful bidding contests for mobile investments, and to encourage a genuine concentration of permitted aid in disadvantaged regions, objectively measured.
The new aid ceiling for the Objective One area after January 1 will be 40 per cent of investment costs, plus a top-up of up to 15 per cent for SMEs. While this is a reduction from the 71 per cent limit now generally in place, it is significantly higher than the 20 per cent maximum, plus a 10 per cent top-up for SMEs which will apply in most of the rest of the State.