EC approves Portugal’s regional aid plan 2022-2027

The European Commission has approved Portugal’s regional aid map for 2022-2027, which includes regions covering 70.23% of the Portuguese population, the EU executive announced on Tuesday.

The Portuguese regional aid map, which defines regions eligible for regional investment aid and establishes the maximum amounts of state aid that can be granted per beneficiary, expressed as a percentage of eligible investment costs – once again includes as a priority the Azores and Madeira.

Pointing out that the outermost regions may be designated by the Member States as “a” (less-favoured) regions eligible for aid, the Commission notes that the Azores and Madeira will continue to enjoy this status, with maximum aid intensities for large companies ranging from 40% to 50%, the highest.

Recognising that “the North, Centre and Alentejo regions are among the most disadvantaged in the EU, with a GDP per capita of less than 75% of the EU average”, the Community executive indicates that “these regions are also eligible for aid”, with a maximum aid intensity of 30% for large companies.

“Furthermore, the Commission has approved an increase in the maximum aid intensity from 30% to 40% for two sub-regions of these “a” regions, due to the relatively high population decline over the last decade”, namely “Beiras e Serra da Estrela and Alto Alentejo”.

The statement also points out that “in order to tackle regional disparities, Portugal has designated as non-defined “c” regions (former “a” regions and sparsely populated areas) parts of the Lisbon Metropolitan Area and the Algarve”, in which case the maximum aid intensity may reach 15% for large companies, so that the difference in aid intensity with the neighbouring “a” regions is limited to 15 percentage points.

“In all the above-mentioned regions, the maximum aid intensities may be increased by 10 percentage points for investments by medium-sized enterprises and by 20 percentage points for investments by small enterprises for their initial investments with eligible costs up to 50 million euros,” explains the Community executive.

The Commission also recalls that “with the entry into force of the future territorial plan for fair transition, in the context of the Regulation establishing the Fair Transition Fund, Portugal will have the opportunity to notify to the Commission an amendment to the regional aid map approved today, with a view to applying a possible increase in the maximum aid intensity in the future fair transition areas, as laid down in the revised Regional Aid Guidelines (RAG).

Adopted by the European Commission on 19 April 2021, and in force since 1 January this year, the revised RAG allow Member States to support less favoured European regions to catch up and reduce disparities in economic well-being, income and unemployment, “cohesion objectives that are absolutely central to the Union”, according to the EU executive.

Brussels underlines that the new guidelines “also increase the possibilities for the Member States to support regions facing a transition or structural challenges, such as depopulation, in order to fully contribute to the ecological and digital transitions.”

“At the same time, the revised RAG maintain robust safeguards preventing the Member States from using public funds to trigger the relocation of jobs from one Member State to another, which is essential for fair competition in the single market,” the EU executive concludes.