How Adaptable is the European Commission? The Case of State Aid Regulation

With the institutionalization of Europe's single market during the past decade, the Commission of the European Communities has faced dramatic changes in its policy environment. These include the intensified mobilization of firms and business associations that make new demands on Community regulatory regimes, and the accumulation of European Court of Justice decisions that alter the Commission's regulatory latitude. This essay examines developments in Community regulation of government aid to industry to assess how well the Commission has adapted to emerging constraints on its regulatory capacities. The essay finds that the Commission invited representatives of the national governments of EU countries to legislate conditions for applying regulations on government aid to industry in the mid-to-late 1990s - in a policy area in which the Commission in the past guarded its autonomy closely - not due to pressures from national governments, but as a response by the Commission's state aid policy unit to potential constraints on its regulatory capacities.