DUNDEE WILL probably continue to be eligible for regional aid, councillors heard last night.
New data has been received by the city council showing the GDP of Dundee and Angus is 93% of the European Union average.
This should be low enough to qualify for a place on the assisted areas map, which determines where public subsidies can be given to private companies to support investment.
Members of the city development committee were told the GDP figure means the city can ask the UK Government’s Department of Business, Innovation and Skills to be included in the new map coming into force next year.
As The Courier reported yesterday, city development director Mike Galloway remains concerned that the EU is proposing to restrict future subsidies to companies with fewer than 250 employees.
Previously grants worth millions of pounds have gone to companies such as Michelin, NCR and Tesco, creating or safeguarding hundreds of jobs, but if the limit is imposed such funding would be banned.
The EU’s directorate-general for competition said: “Regional aid can only play an effective role if it is used sparingly and proportionately and is concentrated on the most disadvantaged regions of the European Union.
“Large companies tend to be less affected than small and medium enterprises by regional handicaps for investing or maintaining economic activity in a less developed area. They can more easily obtain capital and credit on global markets and are less constrained by the more limited offer of financial services in a particular disadvantaged region.”
The directorate-general is also worried that providing regional aid to bigger firms could lead to “significant distortions” of competition.
Mr Galloway, who has written to the EU to protest its plans, told councillors: “This approach would run counter to Scottish Government attempts to target larger companies with capital allowances in enterprise areas and current attempts to incentivise large renewables manufacturing and service operations to locate in Scotland and Dundee in particular.”
The EU expects to publish its finalised guidelines in the summer.
grsmith@thecourier.co.uk