1. Olivier Waelbroeck, Director, Central Financial Service, DG BUDG
"State aid and EU funding – Are they compatible?" Hearing of the Committee on Budgetary Control European Parliament, 25 June 2018
Olivier Waelbroeck, Director,
Central Financial Service, DG BUDG

2. Financial Regulation principles
1. Core principles applying to Financial Instruments and Budgetary Guarantees (Art. 209(2) new FR)
Address market failures
Achieve additionality / not replace support and investment from other sources
Go to economically viable recipients
Not distort competition
Be consistent with State aid rules
even where EU participates in a Financial Instrument as minority stakeholder (Art. 215 (4) new FR)

3. Financial Regulation Principles
2. Core principles also apply to
Financial Instruments and Budgetary Guarantees implemented within a blending facility or platform (Art. 159 new FR)
Ancillary grants (follow the Financial Instruments and Budgetary Guarantees rules when grants are combined with them) (Art. 215(2) new FR)

4. Financial Regulation Principles
3. Cross-reliance on assessments (Art. 126 new FR)
The Commission may rely in full or in part :
on assessments made by itself or by other entities
insofar as these assessments were made with regard to conditions equivalent to those of the FR
No need for a new assessment or authorisation: "The aim is to encourage reliance as far as possible on one assessment or authorisation (conformity to State aids for instance)" (explanatory memorandum of the new FR proposal)

5. Financial Regulation Principles
4. Selection of implementing partners in indirect management: transparent, justified by the nature of the action and shall not give rise to a conflict of interests (Art. 154(1) new FR)
Referral to EIB and EIF's specific expertise to implement financial instruments and budgetary guarantees (Recital 146 new FR)
Possibility to manage the budget indirectly with Member States organisations including national promotional banks (Art. 157 new FR)

6. Post-2020 Basic Acts Build on FR principles - Example of InvestEU
Single set of rules (FR rules) apply to all EU level financial instruments + to other forms of EU support blended with the Budgetary Guarantees
No need for Member States to notify to Commission in case of transfer shared management funds to the InvestEU guarantee: State aid compliance ensured through Block Exemption Regulation

7. Post-2020 Basic Acts
Build on FR principles: Example of the “Seal of Excellence” Projects selected under Horizon Europe but which cannot be financed because of lack of funding under Horizon Europe can be funded by Member States from EFRD, ESF+ or EAFRD. Same applies to Life projects with EAFRD funds. No need to re-apply or pass new selection State aid compliance ensured through Block Exemption Regulation

8. Conclusions
Binding provisions on non-distortion of competition and consistency with state aid rules exist in the Financial Regulation only in relation to Financial Instruments and Budgetary Guarantees
Centrally managed EU programmes (Horizon Europe, Connecting Europe Facility, Digital Europe) refer in recitals to related notions of "Addressing market failures or sub-optimal investment situations", "Avoiding duplicating or crowding out of private financing"