The important work carried out by the LeaderSHIP 2015 initiative has revealed the crucial importance of increasing the competitiveness of the EU shipbuilding industry. Therefore, the new Commission Framework on support measures for shipbuilding, adopted today, improves and strengthens support for innovation. Compared to the 1998 Shipbuilding Regulation, the new framework contains a definition of the concept of "innovation" tailored to the special needs of the shipbuilding industry. The percentage of State support for expenditure on investments needed to fund the innovative aspects of the project is doubled from 10% to 20%. The important work carried out by the LeaderSHIP 2015 initiative was a key driver behind the new provisions on support for innovation (see IP/03/1464).

　

 EU Competition Commissioner Mario Monti declared: "The new rules allow industry to improve its competitiveness, in particular because the possibilities for supporting innovation are enhanced. This framework, in providing more favourable conditions than ever before for the funding of innovative research and development, recognises the high-tech content in shipbuilding."

　

 Innovation aid must be a true incentive to innovate. It must spur shipyards to truly innovate and carry out projects that they would not carry through in the absence of public support. Therefore, funds for innovation should only be given once the product developed is new compared to the "state of the art" within the EU. This is why the new framework links the support to expenditure directly and exclusively to the innovative part of a project. A truly innovative project will get a higher percentage of funding as compared to the 1998 Council Regulation on aid to shipbuilding - up to 20% of the innovation expenditures instead of the previous threshold of 10%.

　

 In order to facilitate a healthy transition to specialised, high technology areas, the framework maintains the possibility to grant closure aid to shipyards. In line with the 1998 Council Regulation, the new framework also refers to the relevant OECD disciplines on export credits and development aid and contains special rules on regional aid to shipbuilding.

　

 The new Framework on State aid to Shipbuilding replaces Council Regulation 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding¹ ("1998 Shipbuilding Regulation") which will expire on 31 December 2003. While the new framework simplifies the treatment of aid to the shipbuilding industry, in particular by applying the rules on training aid, aid to SMEs, employment aid and de minimis aid to the shipbuilding sector, it does recognise certain specifics that distinguish shipbuilding from other industries. These particularities are taken into account by the favourable rules on innovation aid and special provisions on closure aid, as well as export credits and development aid.

　

 The new framework is to be distinguished from the granting of temporary aid under Council Regulation 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding² (the so-called "TDM"). Together with the action against Korea before the WTO, the TDM constitutes the core element of the Commission's "twin-track strategy" challenging Korean unfair practices in the shipbuilding sector.

　

　

　

　

　

 The European Commission has adopted today a new framework on support measures for shipbuilding. With this decision, it is following up consequently on the LeaderSHIP 2015 initiative and has rapidly started implementing the recommendations made by the High Level Advisory Group. CESA welcomes the decision taken today and feels strongly encouraged by the Commission's renewed approach to industrial policy on sector level. CESA is confident that the close cooperation and joining of forces of all stakeholders will lead to sustained success and prosperity of the industry.

　

 This is done by focussing on competitiveness without introducing new state aid. The strengthened support for innovation reflects no new state aid but is the application of a sector specific analogy to existing horizontal provisions. It is now crucial that all Member States put into effect workable tools swiftly. CESA is looking forward to the conclusions of the Competitiveness Council on this matter.

　

 Following up on all 30 recommendations in the report of the LeaderSHIP 2015 Advisory Group, will continue to have priority for all stakeholders involved.. Already last Friday the European Commission adopted a formal Communication on the LeaderSHIP 2015 initiative, with which it has transposed the report into formal policy for the Community

 (See here http://www.cesa-shipbuilding.org/public_documents_site.phtml?sid=&doctype=6).

　

 Please refer also to the press release by the European Commission.

　

Brussels, 26 November 2003

　

For more information please contact:

　

Dr. Reinhard Lüken

Secretary General

　

Tel.: +32 2 230 27 91

Fax: +32 2 230 43 32

E-mail: cesa@skynet.be

　

　

 The important work carried out by the LeaderSHIP 2015 initiative has revealed the crucial importance of increasing the competitiveness of the EU shipbuilding industry. Therefore, the new Commission Framework on support measures for shipbuilding, adopted today, improves and strengthens support for innovation. Compared to the 1998 Shipbuilding Regulation, the new framework contains a definition of the concept of "innovation" tailored to the special needs of the shipbuilding industry. The percentage of State support for expenditure on investments needed to fund the innovative aspects of the project is doubled from 10% to 20%. The important work carried out by the LeaderSHIP 2015 initiative was a key driver behind the new provisions on support for innovation (see IP/03/1464).

　

 EU Competition Commissioner Mario Monti declared: "The new rules allow industry to improve its competitiveness, in particular because the possibilities for supporting innovation are enhanced. This framework, in providing more favourable conditions than ever before for the funding of innovative research and development, recognises the high-tech content in shipbuilding."

　

 Innovation aid must be a true incentive to innovate. It must spur shipyards to truly innovate and carry out projects that they would not carry through in the absence of public support. Therefore, funds for innovation should only be given once the product developed is new compared to the "state of the art" within the EU. This is why the new framework links the support to expenditure directly and exclusively to the innovative part of a project. A truly innovative project will get a higher percentage of funding as compared to the 1998 Council Regulation on aid to shipbuilding - up to 20% of the innovation expenditures instead of the previous threshold of 10%.

　

 In order to facilitate a healthy transition to specialised, high technology areas, the framework maintains the possibility to grant closure aid to shipyards. In line with the 1998 Council Regulation, the new framework also refers to the relevant OECD disciplines on export credits and development aid and contains special rules on regional aid to shipbuilding.

　

 The new Framework on State aid to Shipbuilding replaces Council Regulation 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding¹ ("1998 Shipbuilding Regulation") which will expire on 31 December 2003. While the new framework simplifies the treatment of aid to the shipbuilding industry, in particular by applying the rules on training aid, aid to SMEs, employment aid and de minimis aid to the shipbuilding sector, it does recognise certain specifics that distinguish shipbuilding from other industries. These particularities are taken into account by the favourable rules on innovation aid and special provisions on closure aid, as well as export credits and development aid.

　

 The new framework is to be distinguished from the granting of temporary aid under Council Regulation 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding² ( so-called "TDM"). Together with the action against Korea before the WTO, the TDM constitutes the core element of the Commission's "twin-track strategy" challenging Korean unfair practices in the shipbuilding sector.