Published 01 November 2012

Summary: State Aid to the Swedish Industry 2011

This report is about state aid to businesses in industry and services in 2011. The report is also the basis for the WTO report, which is  carried out every two years (The last WTO report was in 2010) and it only deals with state aid to the industrial sector. The aim is to
describe the state aid over the past years and its historical development in accordance with the EU Commission's accounting requirements.

In 2011, the total of all aid amounted  49 billion crowns, including the financial crisis measures which represented a decrease of 13 percent compared with 2010. Excluding the crisis-related support  decreased  public aid of  2 percent in comparison with 2010, decreasing  from a value of 27.9 to  27.4 billion crowns. The industry groups that aid increased during 2011 was aid to small businesses with an increment of 282 percent, energy subsidies increased by 9,8 percent and aid to R&D and innovation by 24 percent. It should be noted that the net cost of aid to small businesses has shown on average a low level previous to the year 2011 despite greater financial resources that were mobilized during these years. Regional aid during the year was almost unchanged (1.0 per cent) while support for labor market measures declined in 2011 by 2 percent. The miscellaneous aid category fell by 87 percent, falling for  a second consecutive year. The Miscellaneous category mainly consists of measures to build some housing, investment support for older homes, ad hoc aid and investment programs that increase the ecological sustainability of the society.

The main results in 2011, show that the majority of state aid for the business community was distributed in the form of tax incentives and grants, and it was directed mostly towards environmental programs covering more than 85 percent of the total volume of aid granted to the industry and the service sectors.

The results also show that the Swedish aid policy implementation in 2011 (with the exception of aid granted under the temporary framework) (10) , and as previously reported, has been in agreement with the EU Council recommendation, that states "to increase their efforts to reduce the general level of State aid, shifting the emphasis of the ad hoc aid or aid to individual companies / sectors to focus on horizontal objectives of Community interest, such as employment, regional development, education, research and the environment". That is the aid focused most to GBER-EU policy which  has been mainly designed to boost growth and jobs.

As in previous years, it is described briefly here in a special section on the continuing economic crisis and the direct effect on the Swedish and on the EU27's economy. It is also presented here the level of aid and the aid instruments that countries have primarily relied upon to respond to the crisis effects in 2011.

Immediately after the global financial crisis that began in autumn 2008, the Commission issued four messages that contain detailed guidance on when state aid to financial institutions (11) can be considered compatible with Article 107(3)(b) of the Treaty of European Union. This is on the application of State aid rules to measures taken in relation to financial institutions as a result of the global financial crisis, (12) (The Banking Communication), The communication on the recapitalization of financial institutions in the current financial crisis: limitation of aid to the minimum necessary and safeguards against undue distortions of competition, (13) (The Recapitalisation Communication), Communication on the treatment of impaired assets in the Community banking sector (the Impaired Assets Communication), and the Communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules (14) (The Restructuring Communication).

Three of these four messages, namely the Banking Communication, Recapitalisation Communication and the Impaired Assets, in the Community of banking sector (15), specify the conditions under which the main types of aid granted by Member States debt guarantees, recapitalization and measures for transfer of impaired assets - are considered to be compatible with the internal market, while the Restructuring Communication indicates how a restructuring plan (or a viability plan) must be designed for the specific cases of crisis-related state aid given to the banks on the basis of Article 107(3)(b) of the Treaty. On December 2010 The Commission adopted a fifth Communication,  This was called  The Prolongation Communication. 16 This fifth communication was specified to expire on the 31 of December 2011.

10. Guided by the temporary framework, Member States also began taking steps from the end of 2009 to ease business's financing constraints. European Commission, Commission Staff working paper. Autumn 2011. 11. The financial institutions are referred to simply as ‘banks’ in this document. 12. OJ C 270, 25.10.2008, p. 8. 13. OJ C 10, 15.1.2009, p. 2. 14. OJ C 72, 26.3.2009, p. 1. 15. OJ C 195, 19.8.2009, p. 9. 16. OJ C 329, 7.12.2010, p. 7.


Title
Summary: State Aid to the Swedish Industry 2011

Serial number
Statistics 2012:05

Reference number
2012/019

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