The European Commission today announced measures to free member states to provide relatively small-scale subsidies for public services without notifying Brussels.
Neelie Kroes, the European Commissioner for Competition, said a member state will not have to tell Brussels about a subsidy if it is less than €30 million a year and if turnover is less than €100 million annually.
"This package demonstrates clearly the commission's determination to rationalise and simplify state aid rules, and as important, to minimise administrative red tape," Mr Kroes told a news conference.
The commission said the changes stem from a European Court of Justice ruling that said that under certain conditions funding services of general interest does not amount to state aid.
Such aid is restricted under EU rules designed to promote fair competition between member states.
The EU executive said the new rules would give legal clarity on the extent to which money can be given to public services such as home care services, hospitals, social housing, local radio stations and local public childcare facilities.
Small ports and airports will also be eligible to obtain subsidies under the new rules without notifying Brussels.
But subsidies must meet a clearly defined public service aim, be outlined in advance, should only allow for a reasonable profit, and be awarded after a public tender. Subsidies above these thresholds would still need approval from the European Commission.