The community law regime governing state aid to small and medium-sized enterprises

Abstract

The importance of Small and Medium-sized enterprises lies in the fact that they are considered the backbone of industry in Europe. This thesis starts off by tracing the development oflndustrial Policy throughout the years of the Community's existence. It is evident from this historical development that it took several years of hard work and lobbying until it was agreed that a Community Industrial Policy was required. Reference to SMEs was often made throughout this development, but it was only in 1993 that a specific article dealing with them was included in the treaty. This is followed by an examination of the definition of the term SMEs and why a definition was needed in the Community. Attention is paid to the particular characteristics of SMEs and the difficulties which they face due to their size. The European Community has identified these problems and established a set of objectives to assist SMEs in their disadvantaged situation. The thesis then proceeds with an examination of aid granted by national governments. For this reason the definition of what constitutes State aid is examined in detail. Since the Treaty does not provide such a definition, reference is made to the interpretations given by the Court and the Commission. Chapter 4 follows with an examination of Article 87 ( 1) which prohibits the granting of aid which distorts or threatens to distort competition between Member States. Articles 87(2) and (3) are exceptions to this rule, as are the various guidelines and regulations issued by the Commission. These are examined in detail in Chapter 5. In the final Chapter, reference is made to aid to SMEs in Malta in the context of the accession process in the final Chapter. Of fundamental importance are the amendments brought about by the Business Promotion Act to the Industrial Development Act, wherein on one hand they align Maltese legislation with the Acquis, while on the other hand, they recognise the importance of SMEs in the Maltese industry and seek to promote their existence through the granting of specifically related incentives.