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Target Zone Covered by the Map EFTA SURVEILLANCE AUTHORITY Doc 94-16548-1 (ref. 94-16188 A) Dec. No. 157/94/COL Ref. No. SAM 030.94.045 EFTA SURVEILLANCE AUTHORITY DECISION of 16 November 1994 on the map of assisted areas (Norway) THE EFTA SURVEILLANCE AUTHORITY, Having regard to the Agreement on the European Economic Area1, in particular to Articles 61 to 63, Having regard to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice2, in particular Article 1 of Protocol 3 thereof, WHEREAS: I. FACTS 1. Information submitted By fax of 2 November 1994 (ref. 94-16188 A) the Norwegian Government submitted a notification on planned aid ceilings for regional policy measures in areas designated for regional aid in Norway. Information on the existing target zones for regional aid was submitted by the Norwegian Government to the Authority by letter dated 10 February 1994 (ref. 94-2257A). The letter contained the information on statistics and socio-economic indicators for the assessment of regional aid requested by the State aid and Monopolies Directorate of the EFTA Surveillance Authority by letter dated 10 January 1994. The fax and the letter together provide a complete notification of the geographical coverage and planned intensities on regional investment aid, i.e. a proposal for a map of assisted areas in Norway. In all there have been 4 meetings between ofRcials from the State Aid and Monopolies Directorate and the Norwegian authorities on the system of regional aid in Norway. 1 Hereinafter referred to as the EEA Agreement. 2 Hereinafter referred to as the Surveillance and Court Agreement. 2. The contents of the proposed map The proposed map of assisted areas for regional investment aid is identical to the existing map of target zones eligible for regional aid as defined in the Regulations on delimitation of the geographical area eligible for regional aid measures3 of 10 December 1993. The current map of areas eligible for regional investment aid and the proposed aid intensities are considered by the Norwegian authorities to be compatible with the rules on regional aid with reference to Article 61(3)(a) and (c) of the EEA Agreement (see Part VI of the Procedural and Substantive Rules in the Field of State Aid adopted by the Authority on 19 January 19944). According to established practice the map of assisted areas has been revised every 4 years. The latest revision took place in December 1993. The Norwegian authorities foresee the map to remain valid until the next revision which will take place before 31 December 1997. The area is divided into three target zones covering 25 per cent of the Norwegian population. A maximum aid intensity, expressed as a net grant equivalent is proposed for each target zone covered by the map. Zone A has the highest priority. This zone covers the northernmost county of Norway, Finnmark, and the four northernmost adjacent municipalities of Kafjord, Skjervay, Nordreisa and Kvsenangen in the county of Troms. Zone A covers 2 per cent of the Norwegian population. Zone B covers the rest of the county of Troms except the municipality of Tromsa, the county of Nordland except the municipality of Bodo and the most remote parts of the counties of Nord-Trandelag, Ser-Trandelag, Mare og Romsdal, Oppland, Hedmark and Telemark. Zone B covers 11 per cent of the Norwegian population (7.6 per cent in the northern parts and 3.4 per cent in the southern parts of the country). Zone C covers other rural parts in southern Norway and the municipalities of Tromso and Bod0. Zone C covers 12 per cent of the Norwegian population (10 per cent in the southern parts and 2 per cent in the northern parts). In principle the delimitation of the proposed assisted areas is based on the administrative breakdown of the Norwegian territory into 19 counties (Jylker) and 425 municipalities. In order to arrive at areas comparable in terms of population with areas in EU Member States, the counties are, for statistical purposes, designated as NUTS5 III areas, whereas, depending on the population and the geographical situation, districts composed of groups6 of counties as the main rule are statistical units which are designated as NUTS II areas. 3Forskrifter om avgrensningen av det geografiske virkeomr&det for de distriktspolitiske virkemidlene hereinafter referred to as the State Aid Guidelines 5 NUTS = Nomenclature of Statistical Territorial Units in the European Communities. 6Norway is divided into 6 NUTS II areas. Finnmark is the only individual county classified as a NUTS II level statistical unit On this basis, and backed up by statistics on regional GDP/PPS7 per capita and GDP8 per capita, un-employment statistics and population density data, the Norwegian authorities hold that target zone A is comparable to the NUTS II level and eligible for regional aid under Article 61(3)(a). The proposed (a)-area covers 2 per cent of the Norwegian population. Target zones B and C are proposed to be eligible for regional aid under Article 61(3)(c). The areas covered by target zones B and C are based on NUTS III level statistical units with some readjustments. The proposed (c)-areas cover 23 per cent of the Norwegian population. The following table provides a condensed overview of the geographical location, the population coverage and the proposed aid intensity ceilings for each target zone. A list of all municipalities covered by each target zone is provided in Annex 1 to this decision. Zone Areas General aid SME9 top - Population ceiling up coverage A Finnmark + 4 municipalities in 35%NGE10 + 15 % gross 2% Nord-Troms B Major part of Northern Norway + 25 % NGE + 5 % gross 11% remote or densely populated (North 7.6%) areas in Southern Norway (South 3.4%) C Other assisted areas in Southern 15%NGE + 10 % gross 12% Norway +2 county centres in (North 2 %) Northern Norway (South 10%) 3. Link between the map of assisted areas and regional aid schemes The existing target zones and the current aid intensities for regional investment aid are currently linked11 to the main scheme for regional investment (Case no 93-143) Investment grants administered by the Norwegian Industrial and Regional Development Fund (Statens naerings- og distriktsutviklingsfond) and county municipality authorities. By amendments in the implementing regulations, the applicable aid intensities will become the overall cumulative ceilings for regional investment aid from all public sources. Thus the proposed ceilings for regional investment aid will not be linked to specific aid schemes, but in principle cover all aid schemes for general investment and all individual awards of aid for investment to individual enterprises within the areas eligible for regional aid. 7Gross domestic product in purchasing power parities 8Gross domestic product 9Small and medium-sized enterprises as defined in section 10.2 of the State Aid Guidelines. 10Net grant equivalent "Circular letter H-2/93 (Rundskriv H-2/93 S.nr. 93/290 U) n. APPRECIATION 1. General remarks to the concept of the map The proposed map of assisted areas establishes the general framework for regional aid awards in Norway on the national, county and municipality level. No budget is allocated to the map of assisted areas and no individual awards of aid are possible solely on the basis of the map. Therefore, the map itself does not constitute aid in the meaning of Article 61(1) of the EEA Agreement. Nevertheless, it serves, supported by the submitted regional GDP and unemployment data, as anticipated justification of aid awards under Norwegian aid schemes which are made in order to promote or facilitate the development of certain economic areas. Consequently, it has to be established by the EFTA Surveillance Authority whether the target zones which are proposed to be eligible for regional aid, qualify for exemption from the general prohibition of aid under Article 61 (1) in accordance with Article 61(3)(a) or (c) of the EEA Agreement. The necessary assessment to that effect is carried out under II.2. and II.3. The map of areas eligible for regional investment aid is presently not relevant for aid schemes falling under the concept of transport aid. The Norwegian authorities are therefore to be reminded that this decision ordy covers regional aid for general investment and not aid measures falling under the notion of direct and indirect transport aid. The EFTA Surveillance Authority aims at reviewing the existing schemes of assistance to transport on the basis of the criteria laid down in the Section 28.2.3.2. of the State Aid Guidelines before 31 December 1996. 2. Assessment of the proposed delimitation 2.1, General remarks to the chosen NUTS-breakdown The population of the nineteen Norwegian counties (NUTS III level) varies between 75,161 in Finnmark and 450,247 in Oslo. The average county population level is 219,295 inhabitants. Compared to the EC average, the chosen breakdown of NUTS III levels, the population coverage is rather small. On the EC side, the territory of the Member States is broken down into 64 regions on NUTS level I, 167 on NUTS level II with an average population of approximately 2 million and 824 on NUTS level III with an average population of 400.00012. It has to be noted that the variations are very high. On NUTS level II, population varies between 0,1 and 10,1 million inhabitants. This broad spectrum results from the fact that the statistical breakdown agreed between EUROSTAT and the EU/EFTA States concerned is as a general rule based on the existing administrative borders of a State. 12The figures are based on data prior to the unification of Germany.
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