Switzerland needs a monitoring authority for state aid
Published: Monday, Apr 15th 2024, 10:10
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The EU tries to make competition between companies in its internal market as economically liberal as possible. This is why the EU restricts state aid. Switzerland is also to adopt the EU regulations on state aid in certain agreements. This is part of the ongoing negotiations between the two partners.
State aid refers to subsidies or other financial benefits such as subsidized loans, state guarantees and concessions, according to a fact sheet published by the Federal Council. The EU and Switzerland want to continue the rules on state aid in the aviation sector and implement them in the land transport and electricity sectors.
In principle, EU law states that state aid is incompatible with the internal market if it affects trade between member states. Exceptions exist, for example, for aid of a social nature or aid to remedy damage. Only aid that has an impact on competition between Switzerland and the EU is regulated.
Switzerland must examine itself
In the European Union, the EU Commission is the supervisory authority. It therefore reviews applications for aid from member states above a certain threshold.
Switzerland would have to create or designate a suitable authority for this purpose. The Competition Commission (ComCo) already performs this task in the area of air traffic. This was last done for support measures in the course of dealing with the Covid-19 pandemic.
In 2020, the federal government granted two subsidies in the form of guarantees, which the Competition Commission had to review. One was for airlines, the other for the aircraft maintenance company SR Technics, as Christine Caron-Wickli, spokeswoman for the Federal Office of Civil Aviation (FOCA), told the Keystone-SDA news agency on request.
In its opinion on the aid for SR Technics, the Competition Commission stated at the time that it was incompatible with the Air Transport Agreement. The granting of the guarantee contrary to the opinion of the Competition Commission had no consequences, said Caron-Wickli. According to the Common Understanding, such cases can be brought before the courts in future.
Domestic public transport would not be affected
In the area of overland transport, subsidies to domestic railroads are to be excluded from the agreement. On the one hand, these are public services, which are generally permissible in the EU, and on the other hand, domestic public transport is not part of the overland transport agreement, according to the factsheet. International rail transport would be affected by the rules.
In the electricity sector, state aid is about financial support for electricity production, said Marianne Zünd, spokeswoman for the Swiss Federal Office of Energy (SFOE), when asked. Most of the subsidy instruments should be unproblematic. Questions only arose with regard to the market premium for hydropower or the reserve power plants.
Aid in areas outside of these three agreements would not be affected by the planned regulations. For example, state guarantees for cantonal banks.
©Keystone/SDA
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