The aim of the new regulation is to simplify the treatment of aid which seeks to promote the economic development of the many disadvantaged regions of the EU.
According to the new regulation member States will no longer have to notify regional investment aid schemes to the Commission if they fulfill a certain number of conditions laid down. In particular, the regulation block exempts schemes for which it is possible to calculate precisely the aid intensity as a percentage of the investment costs ex ante without the need for a risk assessment. Regional aid schemes involving public shareholdings, risk capital and state guarantees are presumed not to fulfill that condition.
The regulation is based on the new Guidelines for regional aid 2007-2013 (see also the press release and explanation) which were adopted in December 2005 and which are in line with EU cohesion policy and European Council requests for less and better targeted state aid. There are also new notification forms for regional aid schemes that do not meet the conditions of the new regulation and thus still have to be notified individually to the Commission for approval before they can be implemented.
The new regulation applies to aid schemes put into effect or which enter into force after December 31st, 2006 and expires December 31st, 2013.