The electoral foundations to noncompliance: addressing the puzzle of unlawful state aid in the European Union

Franchino, Fabio; Mainenti, Marco

doi:10.1017/s0143814x15000343

Cited by 8 publications

(6 citation statements)

References 81 publications

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“…7. We believe that both Franchino and Mainenti (2016) and Finke (2020) wrongly use unlawful state measures as a proxy for measuring illegal aid. This is only a violation of procedural requirements under 108(3) TFEU and every unlawfully granted aid case first has to be assessed in a preliminary investigation before a FI can be opened.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Distorted promotion of undistorted competition? Commission decisions after formal investigations in the EU state aid regime

Druenen

Zwaan

2021

Journal of European Public Policy

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This article aims to explain the Commission's decisions after formal investigations in the EU state aid regime. It proceeds from the idea that the Commission is confronted with an enforcement dilemma: it must weigh the benefits of promoting undistorted competition on the internal market against the potential costs of losing member state support. This study explores to what extent characteristics of state aid cases and characteristics of member states influence this dilemma and thereby the Commission's decisions. Based on multilevel logistic regression analysis of a newly created dataset consisting of all formal investigations initiated and decided on by the Commission between 2004 and 2018, we find that aid that has been granted unlawfully and aid consisting of tax measures is more likely to result in a negative decision. Member states characterized by a larger administrative capacity are less likely to face negative decisions.

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Section: Conclusion and Discussionmentioning

confidence: 99%

Distorted promotion of undistorted competition? Commission decisions after formal investigations in the EU state aid regime

Druenen

Zwaan

2021

Journal of European Public Policy

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“…Besides, the more detailed the criteria set out by the Commission in guiding its assessment of compatible aid, the more these rules provided an opportunity structure for private parties to either demand forms of compatible aid or to complain about distortive aid. 92 Franchino and Mainenti 93 are perplexed, however, by the illegal aid that persists in the EU Member States. They point to the importance of electoral institutions in shaping government incentives to comply with international obligations, such as the State aid rules.…”

Section: Iiiii Patterns Of Compliance With Eu State Aid Rulesmentioning

confidence: 99%

State aid control from a political science perspective

Cini¹

2021

Research Handbook on European State Aid Law

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I. INTRODUCTION 1European State aid rules and decision-making has always been politically sensitive. In contrast to antitrust or mergers, State aid control is '… the privileged dialogue between the Commission, national governments and favoured firms '. 2 The relationship between the Commission and Member States lies at its heart, however, with firms playing only an indirect role. Given their strong distributive element, State aid measures and EU responses to those measures also have the potential to attract considerable public attention. For elite actors, however, reference to the politics of State aid control has pejorative overtones. In order to assure the credibility of EU State aid control the Commission seeks to avoid political conflicts about individual decisions. For decades, the Commission has sought to commit itself to strict State aid control by developing an increasingly complex system of soft and hard rules. 3 More recently, the strengthening of economic analysis in the handling of individual cases was partly justified as an additional means of minimising the potential for political interference. This has meant that for many years now political conflict about individual State aid decisions has become the exception rather than the rule, such that even during the recent financial and economic crisis, the Commission managed to sustain a rule-based approach and to temporally limit the exceptions made. Nevertheless, EU State aid control remains inherently 'political' 4 in at least three respects: first, competition policy in general, and State aid control in particular, are horizontal policies which touch upon a broad variety of goals other than competition, for example, innovation, environmental protection, regional development. Balancing these different goals against each other and setting priorities involves political judgement. Second, the enforcement of EU State aid rules heavily depends on their general acceptance by, and the cooperation of, Member State governments. In order to develop EU State aid control and given its limited own resources, the Commission needs to be sensitive to what is politically feasible at the level of Member States, realising that the policy '… restrains the ability of democratically elected governments to 1 This chapter updates Michael Blauberger's excellent contribution to the first edition of this volume. The author would like to thank Prof. Blauberger for allowing much of his earlier work to be carried over into this chapter.

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“…Grossman 2006). Franchino and Mainenti (2016) are perplexed, however, by the illegal aid that persists in the EU Member States. They point to the importance of electoral institutions in shaping government incentives to comply with international obligations, such as the State aid rules.…”

Section: Iiiii Patterns Of Compliance With Eu State Aid Rulesmentioning

confidence: 99%

Research Handbook on European State Aid Law

Hancher¹,

López²

2021

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This chapter reviews the political science research on European Union (EU) State aid policy. The literature focuses primarily on the evolution of State aid control and on the institutions and actors who play a role in the policy. Resting on Treaty provisions that were little used in the first decades of the European Community, the Commission's incremental soft law approach, supportive jurisprudence from the Court of Justice of the European Union (CJEU), and the involvement private complainants have helped bring together Commission and Member State interests in support of State aid control. The Commission's handling of the financial crisis, a test for the more mature regime, has been largely judged a success. Over time policy initiatives have helped to reduce and target national subsidies, and the enforcement of and compliance with the Treaty provisions have improved dramatically since the late 1980s. The political dimension of the policy seems to have less resonance these days, as there are fewer high-profile controversial cases than in the past, but there are still interesting questions to be addressed about the way in which competition, regional, environmental, cultural and industrial policies are balanced against each other in the design and application of the EU-level policy and decision-making, and what the implications of UK's departure from the EU and the emergence of populist governments and leaders in the Member States might mean for State aid control.

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The electoral foundations to noncompliance: addressing the puzzle of unlawful state aid in the European Union

Cited by 8 publications

References 81 publications

Distorted promotion of undistorted competition? Commission decisions after formal investigations in the EU state aid regime

Distorted promotion of undistorted competition? Commission decisions after formal investigations in the EU state aid regime

State aid control from a political science perspective

Research Handbook on European State Aid Law

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