State Aid Policy in the European Community

As full market integration in the EC comes into clearer perspective, the danger of distortions of competition become more evident. Although state aid may be provided to undertakings for a variety of reasons that may be considered to be beneficial to the economy, effective liberalisation may be undermined by state interventions, which weaken competition and prevent the achievement of market integration. State aid is thus considered to be in principle incompatible with the common market, although the well-known qualifications in Article 87 EC imply that certain exceptions are possible. This guide, which has grown out of seminars conducted by the European Institute of Public Administration in Maastricht, provides a concise overview of the state aid policy of the European Community. It explains the principles on which this policy is based, and how it is applied in practice. It also identifies the primary and secondary sources of EC law on state aid and makes references to landmark Commission decisions and Court cases, both of which sources it cites extensively. Among the many important issues the book addresses in depth are the following: what constitutes effective competition; effect on trade of aid incompatible with the common market; evaluating necessity, proportionality, and other criteria for providing aid; agriculture, transport, and other exceptions; services of general economic interest (SGIE); new aid versus existing aid; formal investigation procedure; and recovery of unnotified aid. The presentation focuses on those issues that are of practical relevance to policymakers and practitioners managing state aid in the public administrations of the EC Member States and its partner countries. It offers the quickest and most reliable guide to applying Commission decisions and Court rulings on state aid, as well as to practice in the various Member States.