Workers' employability to be priority for training aid

In July 1998, the European Commission adopted a framework which seeks to clarify the circumstances under which state aid granted to companies for training their workers is compatible with the rules of the common market in relation to the distortion of competition. The framework aims to confirm the positive approach of the Commission to state aid granted for training which improves workers' "employability".

On 22 July 1998, the European Commission adopted a "framework" which seeks to improve transparency in the area of state aid granted to companies for training their workers, by clarifying which publicly funded training falls under the competition rules regarding state aid. It also defines the criteria the Commission will use to ascertain whether this aid is compatible with the common market.

The framework actually targets only a limited part of public financing for workers' training. In particular, general measures such as tax incentives to encourage the provision of training, which are offered to all employers, are not affected. Such measures are encouraged by the Commission and are not seen to pose any competition problems.

The new framework aims to assist the Commission in appraising state aid which encourages only certain companies by reducing their training costs. These could be seen to place such employers at an unfair advantage, and the Commission perceives a need to appraise such aid and reconcile the objectives of an active employment policy with the need for equitable rules for all companies.

The Commission emphasises in particular the case for targeted assistance for low-skilled workers or workers with special needs, as well as assistance for SME s which tend to have a relatively low level of training expenditure. Acceptable levels of state intervention therefore vary from 25% of the total cost for specific training programmes in large companies, to 90% for training in SMEs located in less developed regions.

Based on the experience gained in applying this framework, the Commission intends to adopt as soon as possible a Regulation exempting Member States from the obligation to notify state aid for training which is compatible with the common market.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment