Competition policy and institutional politics in the European Community: State aid control and small business promotion

Abstract

Abstract. The article examines EC competition policy from a political science perspective, analyzing the political and institutional considerations which inform the development of the Commission's controlling capacities in competition. It concentrates on policy towards small businesses in manufacturing. We argue that the Commission's general capacities in the formation and the administration of competition policy have been growing in both the merger‐controlling aspects and in the control of state subsidization. Against this background, the handling of state aid to small businesses presents us with a paradox: the more developed the enforcement system in competition, the less the Commission applied it to national subsidization of small‐scale production. The role of EC competition policy and particularly the subtle handling of state subsidies should be analyzed as part of the developing system of Community policy vis‐à‐vis small business, encompassing measures at the EC and national levels. Community policy has emerged as a result of an accommodation between different EC institutional and domestic political objectives, and to some extent this accommodation has been achieved at the expense of policy content. The article traces the development of Community policy in this area from the early 1970s to the adoption of the first‐ever detailed policy guidelines in 1992, and suggests an analytical scheme for explaining the emergence of small business promotion as an issue in EC institutional politics.

The Politics of Privatisation: Redrawing the Public–Private Boundary

“…(cf. Smith 1998: 67;Lavdas and Mendrinou 1999;Chari and Cavatorta 2002: 122). Such methods were practised discreetly by Greek privatisers under the watchful or explicitly prohibitive eye of the European Commission, especially in the case of heavily indebted entities like OAE enterprises.…”

From Negative to Positive Integration: European State Aid Control Through Soft and Hard Law

“…Unsurprisingly, ministries of finance tend to be less positive about state aid than will other ministries entrusted to promote industrial or regional development. More importantly, industrial policy traditions greatly differ between EU Member States, ranging from countries with very restrictive state aid policies to other countries in which state aid is not only used to address market failures but also for redistributive purposes (Dylla 1998 Before we analyze this historical development in greater detail in the next section, Table 1 illustrates some of the possible trade-offs and dividing lines between different actors' policy priorities in the field of state aid: (Lavdas/Mendrinou 1995Evans 1997). At a time of economic decline when Member States were increasingly subsidizing their own industries, state aid control was "both imperative and impossible" (Cini/McGowan 1998: 143).…”

“…The framework was later expanded in order to include "innovation-related aid," which was justified by explicit reference to the Lisbon objectives (European Commission 2006a). The promotion of SMEs became a major concern within the context of European state aid control in the late 1980s (Lavdas/Mendrinou 1995. Today, many state aid rules include more generous exceptions for SMEs than for large enterprises.…”

Commission activism: subsuming telecommunications and electricity under European competition law

“…On the other hand, the competition rules of the Treaty-rarely analysed so far-circumscribe the actions of the member state governments. Article 92 and Article 93 concern the control of state aids (Lavdas and Mendrinou 1995). While the Commission discusses its measures against state aids each semester with the governments, these are even less institutionally involved in the last provision of competition law, Article 90, which is my focus in this article.…”