Bilbao: Regional development officers in the Basque Country write State aid conditions into nearly every industrial grant they approve, and from 1 January 2027 they will work from a rulebook that does not yet exist in final form. The European Commission closed its consultation on a redrafted General Block Exemption Regulation on 23 April 2026 and has given itself until the end of this year to adopt the text.
The regulation matters because of what it removes. Regulation (EU) No 651/2014 declares whole categories of State aid compatible with the internal market, which lets national and regional authorities pay out without notifying Brussels first and waiting for clearance. Roughly nine in ten aid measures across the Union travel that route. A change to the exemption boundaries therefore changes how fast a member state can act, not merely what it may fund.
The Commission published the draft on 25 February 2026 and pursued three aims. It wants simpler compatibility conditions, an update that tracks social, technological and market shifts since 2014, and a general tidying of a text that has grown through amendments in 2017, 2020, 2021 and 2023. The draft also amends the agricultural and fisheries block exemptions and dovetails with a separate Transport Block Exemption Regulation still in preparation. The consultation file under reference HT.6365 carries the draft, an explanatory memorandum and a table of correspondence for anyone tracing old provisions into new numbering.
Stakeholders filed heavily. The Commission has published replies from citizens, public authorities and organisations in three separate bundles, with some submissions still withheld on confidentiality grounds. Airport operators pressed one of the more concrete asks, seeking operating aid cover for terminals handling up to 500 000 passengers a year, a threshold that would pull dozens of small regional airports inside the safe harbour.
Timing is the practical difficulty. The Commission plans adoption at the end of 2026 for entry into force on 1 January 2027, which leaves granting authorities a matter of weeks between seeing the final text and applying it. Managing authorities running cohesion programmes, national development banks and ministries drafting aid schemes all need lead time to redraft templates, retrain case handlers and reopen legal advice. Four months of drafting silence followed by an immediate start date compresses that work into a holiday period.
The stakes rise because member states lean on the exemption more heavily than they did a decade ago. Defence and civil preparedness spending, affordable housing, water resilience and energy security have all moved up the funding agenda, and each of them reaches national budgets through instruments that need a State aid basis. A broader exemption speeds delivery and weakens the Commission’s grip on where subsidy money lands. A narrower one preserves scrutiny and slows capitals down at a moment when they say they cannot afford delay.
That tension explains the disagreement in the file. Industry groups and several capitals argue that prior notification has become a bottleneck the single market can no longer justify. Competition lawyers and smaller member states reply that block exemptions let the largest budgets outspend everyone else without anyone reviewing the distortion, and that the Commission’s own scoreboard already shows aid concentrating in a handful of countries. The review page for the exemption regulation and the February announcement of the draft set out the Commission’s position, though neither resolves the argument.
Adoption is a Commission decision rather than a legislative negotiation, so no parliamentary vote will slow it. The next visible step is publication of the final regulation, and every authority planning a 2027 scheme is waiting for it.
