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Competition Policy in Europe – Temporary or Long-Lasting Changes? : Changes of the principles and the practice of state aid during the crisis

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  • Voszka, Éva

Abstract

During the first phase of the global crisis, the scale and scope of state aid increased at an unprecedented rate all over the world. Although their approval is – uniquely – part of competition policy in the European Union, the Commission and DG Competition did not oppose the unprecedented expansion of state aid. On the contrary, they played an active role in the modifi-cation and enforcement of frameworks. The paper analyses how EU regulation, prohibiting state aid for distorting competition, might be compatible with recent developments in this field. It comes to the conclusion that the European Commission proved to be strong enough to keep the regulation of distribution methods under control and to try to enforce the basic principles, but was unable to stem the tide of aid. By doing so, it contributed to the accumulation and growth of state deficits, the repeated desta-bilisation of financial markets and sovereign debts, and thus to the escalation of the second wave of the financial crisis in Europe in 2011.

Suggested Citation

  • Voszka, Éva, 2012. "Competition Policy in Europe – Temporary or Long-Lasting Changes? : Changes of the principles and the practice of state aid during the crisis," Public Finance Quarterly, Corvinus University of Budapest, vol. 57(1), pages 71-90.
    • Handle: RePEc:pfq:journl:v:57:y:2012:i:1:p:71-90
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    File URL: https://unipub.lib.uni-corvinus.hu/8996/
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    References listed on IDEAS

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    1. Lorenzo Coppi & Jenny Haydock, 2009. "The Approach to State Aid in the Restructuring of the Financial Sector," CPI Journal, Competition Policy International, vol. 5.
    2. Ken Heyer & Sheldon Kimmel, 2009. "Merger Review of Firms in Financial Distress," CPI Journal, Competition Policy International, vol. 5.
    3. Anna Visvizi, 2012. "The crisis in Greece and the EU-IMF rescue package: Determinants and pitfalls," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(1), pages 15-39, March.
    4. Ken Heyer & Sheldon Kimmel, 2009. "Merger Review of Firms in Financial Distress," EAG Discussions Papers 200901, Department of Justice, Antitrust Division.
    5. Voszka, Éva, 2009. "Versenybarát és versenykorlátozó állam - válság előtt, válság közben [The pro-competition and a competition-restricting state - before and during the crisis]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 913-932.
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    More about this item

    Keywords

    competition policy; state aid; crisis;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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