State Aid Policy and Its Role in Romania's Post-pandemic Recovery

The turmoil caused by the outbreak of the COVID-19 pandemic led to a serious worsening of the global economic environment, affecting all Member States of the European Union. In response, national governments adopted State Aid policies aimed at mitigating the economic downturn and stabilizing financial markets. As the Romanian economy was significantly affected by the pandemic, the national government used the exceptional measures allowed by the State Aid Temporary Framework to implement various schemes and measures. This paper highlights the main objectives of these measures and their role in promoting economic recovery after the pandemic. In order to achieve the objective outlined above, the primary analytical approach that will be employed is a comparative one, based on data provided in the latest statistics from the European Commission. To this end, we will primarily employ a quantitative analysis based on the latest State Aid Scoreboard published by the European Commission, supplemented by national data on specific measures adopted during and after the pandemic. We have selected all types of tools used in the State Aid schemes, including guarantees, tax exemptions, grants, and subsidized loans to provide a comprehensive overview of how these financial instruments could lay the foundation for Romania's economic recovery. Our main findings show that the State Aid implemented contributed significantly to reducing the negative impact of the pandemic on Romania’s real economy, while at the same time enabling the post-pandemic recovery.