The European Commission has approved under EU State aid rules Croatia’s map for granting regional aid from 1 January 2022 to 31 December 2027 within the framework of the revised Regional aid Guidelines (‘RAG’).
The revised RAG, adopted by the Commission on 19 April 2021 and entering into force on 1 January 2022, enable Member States to support the least favoured European regions in catching up and to reduce disparities in terms of economic well-being, income and unemployment – cohesion objectives that are at the heart of the Union. They also provide increased possibilities for Member States to support regions facing transition or structural challenges such as depopulation, to contribute fully to the green and digital transitions.
At the same time, the revised RAG maintain strong safeguards to prevent Member States from using public money to trigger the relocation of jobs from one EU Member State to another, which is essential for fair competition in the Single Market.
Croatia’s regional map defines the Croatian regions eligible for regional investment aid. The map also establishes the maximum aid intensities in the eligible regions. The aid intensity is the maximum amount of State aid that can be granted per beneficiary, expressed as a percentage of eligible investment costs.
Under the revised RAG, regions covering the entire population of Croatia will be eligible for regional investment aid:
The regions of Panonska Hrvatska, Jadranska Hrvatska and Sjeverna Hrvatska are among the most disadvantaged regions in the EU, with a GDP per capita below 75% of EU average. They are eligible for aid under Article 107(3)(a) TFEU (so-called ‘a’ areas), with maximum aid intensities for large enterprises between 40% and 50%, depending on the GDP per capita of the respective ‘a’ area. The region Ličko-senjska županija, which is part of Jadranska Hrvatska, also qualifies as sparsely populated area having fewer than 12.5 inhabitants per km². In sparsely populated areas, Member States can use operating aid schemes to prevent or reduce depopulation.
The region of Grad Zagreb no longer qualifies as ‘a’ area in view of its positive economic development, but is now considered as a pre-defined region under Article 107(3)(c) TFEU (so-called ‘c’ area), as with all regions that qualified as ‘a’ areas in the period until 2021, and no longer qualify as such in the upcoming period. The maximum aid intensities for large enterprises in this area will be 35%.
In all the above areas, the maximum aid intensities can be increased by 10 percentage points for investments made by medium-sized enterprises and by 20 percentage points for investments made by small enterprises, for their initial investments with eligible costs up to €50 million.
Once a future territorial Just Transition plan in the context of the Just Transition Fund Regulation will be in place, Croatia has the possibility to notify the Commission an amendment to the regional aid map approved today, in order to apply a potential increase of the maximum aid intensity in the future Just Transition areas, as specified in the revised RAG for ‘a’ areas.