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SMEs and State Aid

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Economic Growth in the European Union

Part of the book series: Contributions to Economics ((CE))

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Abstract

The present chapter discusses the relationship between small and medium enterprises and state aid. SMEs are very essential to promote competitiveness, job creation, economic growth, social stability and a spirit of entrepreneurship and innovation throughout the EU. For that reason they are at the focus of EU policy which aims to benefit them by granting them the SME bonus, which in essence means more and easier State aid. It is therefore deemed important that an SME is properly classified as such, according to the provisions of Commission’s Recommendation 2003/361/EC on the SME definition, in order to have preferential access to state aid for investment and other activities. In this context, anti-circumvention measures have been established to prevent abuse of the SME definition and reserve the benefit of the SME bonus to genuine SMEs. EU Commission’s practice and EU case-law on the SME definition have greatly contributed to this purpose.

All data included in the present contribution refer to research done until May 2016.

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Notes

  1. 1.

    A public investor is considered to be in a better position when it receives a priority return in time compared to private investors.

  2. 2.

    Paras. 31–36 and especially fn. 26 that gives, first, an example of an economically significant private investor funding taking up one third of the total equity investments in a company (Case C 53/2006, Citynet Amsterdam, the Netherlands, OJ L 247, 16.9.2008, p. 27, Paragraph 96–100) and then the opposite example where pari passu conditions were not met, since the capital injected by the State (90%) was neither accompanied by a comparable participation of a private shareholder (10%) nor was it proportionate to the number of shares held by the State (Case N 429/10, Agricultural Bank of Greece (ATE), OJ C 317, 29.10.2011, p. 5).

  3. 3.

    Furthermore, “small” enterprises employ fewer than 50 persons and their annual turnover or annual balance sheet total does not exceed 10 million euros; “micro-enterprises” employ fewer than 10 persons and their annual turnover or annual balance sheet total does not exceed 2 million euros.

  4. 4.

    For each category see the graphics presented in pp. 16–23, enriched by useful examples in pp. 25–36.

  5. 5.

    To be noted that this case has been ruled under the previous Commission’s Recommendation 96/280/EC which was in force at the time. See also Kekelekis (2008, p. 18).

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Mouameletzi, E. (2020). SMEs and State Aid. In: Nikas, C. (eds) Economic Growth in the European Union. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-48210-7_6

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