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Which Role for State Aid and Merger Control During and After the COVID Crisis?

Author

Listed:
  • Chiara Fumagalli
  • Massimo Motta
  • Martin Peitz

Abstract

In response to the severe economic crisis triggered by Covid-19, state aid and a relaxation of competition rules, including merger control, have been proposed as policyoptions. We argue that there is a clear role for state aid in sectors experiencing a temporary shock, whereas state aid in sectors affected by a permanent long-term shock is more problematic. We also argue that merger control should not be relaxed and that in particular any merger proposal invoking the failing firm defence requires close scrutiny.

Suggested Citation

  • Chiara Fumagalli & Massimo Motta & Martin Peitz, 2020. "Which Role for State Aid and Merger Control During and After the COVID Crisis?," CRC TR 224 Discussion Paper Series crctr224_2020_184, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2020_184
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp184
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    More about this item

    Keywords

    competition policy; state aid; merger control; Covid-19; failing firm defence;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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