The European Union State Aid: An Overview

This paper summarizes the economic significance of state aid and the main principles of European state aid control. It starts with a definition of state aid in European context and exceptions to the general ban of state aid. Then they are explored the motives for granting state aid, ranging from the correction of market failures over political motives to political economy considerations. They are described some procedures and coordination of granting state aid, then how state aid control fits into the framework of European competition policy before we comment extensively on the more economic approach to state aid control, as implemented by the European Commission, and the state aid action plan. Control of state aid is of increasing importance in the context of European competition policy in order to maintain a fair level of activity of all enterprises participating in the European markets, regardless of the Member State in which they reside. The theoretical fundamentals of state aid are important to be studied and applied. Were distinguished and described the main approaches in the evolution of economic theories in the field of State aid. Criteria were established to determine the government's actions as state aid and intervention methods analyzed. It is important to think about the implications of state aid at an early stage. Doing so allows assistance to be designed and given more quickly and effectively and avoids potential problems later. A program of assistance that does not follow the rules could be forced to close. Giving state aid illegally could result in the money having to be clawed back with possibly very serious consequences for the recipient. The European Commission monitors and controls state aid in the EU by requiring member states to notify the Commission in advance of proposed state aid in order to ensure compliance. If a European company believes that a competitor is receiving illegal aid then they should complain directly to the Commission on the complaints form. The Commission is obliged under the Procedural Regulation to act on any evidence of potential illegal aid and will therefore take complaints seriously, but all these aspects are described in the present research.