The aid granted by the European Union has traditionally been focused on promoting the development of regions in Member States with low levels of income and high unemployment rates, as well as regions suffering processes of industrial delocalization. Nonetheless, since the approval of the “Lisbon Strategy” by the European Council held in March 2000, successive European Councils have been promoting a redefinition of State aids toward the meeting of horizontal objectives such as the promotion of research and development, the optimization of human capital and the adoption of environmental protection and energy saving measures.

Most EU incentives supplement development plans financed by the Spanish State. Such aid is channeled through Public Authorities and financial institutions, which act as intermediaries.

Among the broad spectrum of incentives offered by the EU, the most significant are:

The European Investment Bank

http://www.eib.org/

The EIB supports projects that foster the development of underprivileged regions and projects of common interest to various Member States or which benefit the EU as a whole (i.e. environmental protection, improved use of energy sources, improved industrial competitiveness in the EU, development of SMEs, improvement of European infrastructure, or projects aimed at modernizing the healthcare and education industries).

Loans from the EIB are compatible with aid from other EU agencies up to a maximum of 90% of the investment.

The European Investment Fund

http://www.eif.org/

The EIF was created with the dual purpose of fostering the development of trans-European transportation, telecommunications and energy networks, and promoting the development of SMEs. The Fund operates in two ways, by providing guarantees for all types of loans, and by acquiring and managing, on a temporary basis, minority interests in companies involved in the implementation of trans-European networks. More information here .

Structural Funds

Structural Funds finance initiatives (both public and private) aimed at achieving structural improvements in the Member States and narrowing the gap between the poorest and the most prosperous regions of the European Union. Programs which are co-financed by Structural Funds are directly managed by each Member State. The Member State then appoints a managing authority for each program to inform potential beneficiaries, select projects and generally monitor implementation. More information on “management authorities” here.

When the Multi-year Financial Framework 2007-2013 came into force, the regulation and scope of the Structural Funds underwent a thorough transformation and, as from January 1, 2007, only two funds have been called Structural Funds: the European Regional Development Fund and the European Social Fund.

These Funds, together with the European Investment Bank and the other existing Community financial instruments, will contribute to meeting the three new priority objectives of the structural initiatives (“Convergence”, “Competitiveness and Employment” and “European Territorial Cooperation”) established by the Council with a view to increasing the economic and social cohesion of the new EU resulting from the increase in membership.

The development strategy in Spain and the related allocation of Community funds, by region and according to the strategic guidelines of the European Union, is set forth in the National Strategic Reference Framework (Marco Estratégico Nacional de Referencia or MENR) for Spain for the 2007-2013 period, approved by the European Commission on May 7, 2007. (More information at www.dgfc.sgpg.meh.es ).

Research and Development Programs

The EU has been establishing multi-year plans that define the Community lines of action under the Community research and development policy, allocating significant resources to their execution. The program in force since January 1, 2007 is the VII Framework Program for Technological Research and Development (FP7), which constitutes the main EU instrument for the financing of research in Europe during the 2007-2013 period.

The European Commission has planned to allocate a budget exceeding €50,500 million for the entire VII Framework Program. Information on calls which are currently open but whose application deadlines expire in the coming months can be obtained at

http://cordis.europa.eu/fp7/home_en.html

Community initiatives for financing businesses

The European Commission Directorate-General of Enterprise manages the innovation/SME program, which includes numerous specific initiatives (e.g., Gate2Growth).

There are also corporate financing initiatives according to industry (e.g., the 2007 MEDIA Program under which aid applications are called for under the 2011 SELECTIVE Plan).

For further information, visit the extended version of our online Guide to Business:

Investment aid and incentives in Spain

 

Prepared by Garrigues

Last updated: 28|06|2011